Barrick Gold founder Peter Munk’s final play – by by Jonathon Gatehouse (MacLean’s Magazine – October 1, 2013)

He’s fending off a shareholder revolt and fighting for a legacy

Back in 1996, Peter Munk sat down with one of his biographers and laid out his 34 “golden rules” for success in business. Some of them offer practical advice: “Always leave something on the table in a public issue. If you push for the last penny, it may hurt you the next time around.” While others border on fortune-cookie wisdom: “Time is short.

If you want to achieve much, you’ve got to run.” Taken all together, the list seems less like a coherent corporate philosophy than an odd mélange of exhortations to take risks and calls for fiscal prudence. But there was also an element of prophecy—at least when it comes to the current fortunes of the celebrated 85-year-old entrepreneur. “If you want to dream big, expect big problems,” states rule 30. “Big dreams challenge the fates.”

From its humble beginnings as an oil and gas play in 1983, Munk’s Toronto-headquartered Barrick Gold Corporation has grown into the world’s largest gold producer, with 24 mines operating on four continents, five more in development and ore reserves estimated at more than 140 million ounces. Characterized by the relentless pace and sheer scale of its acquisitions, including a 2011 foray into copper with the $7.66-billion takeover of Equinox Minerals Ltd., the company had been a darling of investors for more than two decades. At its peak in 2011, Barrick was trading at $53 a share and had a market capitalization of $54 billion.

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Ned Goodman aims to boost CNSX exchange as alternative to TSX – by Peter Koven (National Post – October 1, 2013)

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

Ned Goodman has felt for years that the Toronto Stock Exchange and its venture counterpart are failing entrepreneurs. Now the chief executive of Dundee Corp. is doing something about it.

Mr. Goodman, 75, has acquired a third of CNSX Markets Inc., which operates the Canadian National Stock Exchange (CNSX) and Pure Trading, and joined its board as deputy chairman. He is teaming up with Tom Caldwell, a veteran investor in stock exchanges, to promote the CNSX as a viable alternative to the TSX. The dollar value of the deal was not disclosed.

His view is that it has become too expensive, time-consuming and burdensome for start-up companies to raise small amounts of money on the TSX. They can face absurd legal bills to get a deal done, he said in an interview.

“Virtually ever issuer on the Venture exchange is not happy with it,” he said. “Once we get one or two companies [to switch to the CNSX], lots will follow.” The move comes as small-cap resource companies, a group that Mr. Goodman knows well, have fallen completely out of favour with investors. They are struggling to raise money or generate any trading in their stocks on the Venture exchange.

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‘Big Mick’ returns to mining – and he’s hungry for acquisitions – by Eric Reguly (Globe and Mail – October 1, 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.

LONDON — Mick Davis is back in the mining game. Known as “Big Mick” because of his imposing size and voracious appetite for acquisitions, Mr. Davis transformed Xstrata PLC from a grab-bag of second-tier assets into a global resources powerhouse, bolstered by the takeover of Canada’s Falconbridge Ltd.

Now Mr. Davis, older, leaner but still hungry, along with a few former Xstrata executives, has launched X2 Resources, a private company that has raised $1-billion (U.S.) and plans to raise more. The goal is to give it the firepower to pounce on mining assets that the X2 executives consider undervalued in a market that has lost its love for commodities.

In interview in London, Mr. Davis, 55, and Trevor Reid, 52, who was Xstrata’s finance director, said they are talking to Canadian investors, among others. “We’re still in the fundraising mode and we’d like some more investors,” Mr. Reid said, adding that Canadian names are on the potential investor list.

Noble Group Ltd. and TPG are each contributing $500-million to X2, with an undisclosed amount from Mr. Davis and his colleagues.

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Red Lake starving for workers – by Jeff Walters (CBC News Thunder Bay – October 1, 2013)

Northwestern Ontario mining community struggles to keep up with booming economy

A strong economy, stable population and lots of jobs sounds like a dream come true for many communities — but the mining town of Red Lake has almost zero unemployment and is starving for workers.

Red Lake’s economic development officer figures the roughly 80 people in the community who are out of work “just don’t have the skills, or can’t work,” Bill Greenway said. “So, there’s zero unemployment here.”

The town — located about 600 kilometres northwest of Thunder Bay — also struggles with millions of dollars leaving the community every year. Hundreds of contractors work in Red Lake. Many of them commute to work and, instead of living in Red Lake, they live in a bunkhouse operated by Goldcorp. That means they do not pay property taxes.

“You appreciate that the fly-in-fly-out workers are important,” Greenway said. “[But] their income leaves with them.” He said a priority is getting contractors and miners to actually move to Red Lake, which has a population of about 5,000.

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Immigrants keep Red Lake booming – CBC News Thunder Bay (September 27, 2013)

Northwestern Ontario mining town’s unemployment rate is nearly zero

A community founded on immigration is once again attracting new residents from around the world. Almost a century after miners from around the world rushed to Red Lake to work in its booming gold mines, the community still needs workers to keep its economy going.

“Immigration was really extremely significant because had we not had immigrants coming to work in the area, the mining would actually not be here,” said Michelle Alderton, who works at the Red Lake Heritage Centre. “We would not have an economy.”

Today, Red Lake welcomes people like Gabriela Jiminez. She came from Mexico with her husband, who found work at a mine. Jiminez said her family is comfortably settled in.

“My husband is now getting all those toys that the people like to have here,” she said. “And, I think that’s enough for us for summertime. [We] just go outside and do whatever.” Jiminez said she is proud to be part of a growing number of immigrants moving into Red Lake, a town of 5,000 people.

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No salvage plans for Giant Mine structures after cleanup – by CBC News North (September 30, 2013)

The federal team tasked with cleaning up the old Giant Mine site on the outskirts of Yellowknife says there’s no plans to salvage any of the buildings, but they’re open to suggestions from the public on the issue.

The mine produced more than 200,000 kilograms of gold during its more than 50 years in operation. But it’s sat idle since 2004 after the old owners left, and now it’s up to the federal government-funded team to clean up the mess.

Over the next few years, crews will dismantle the familiar silhouette of the mine’s wooden “C” headframe. That needs to go so they can seal off the mine shaft below. The plan to remove all the buildings, many of them are laden with asbestos and other contaminated materials.

Once that happens, there won’t be much evidence that anything was ever there. “It won’t be so obvious to them. In 20, 30 years, it’ll just be a cleaned up site,” N.W.T. Mining Heritage Society president Walt Humphries says. “They won’t have much to remember.”

For some, Giant Mine’s place in the city may already be fading into the past. “I got a son working in the mines up north… but I didn’t have no connection to this mine,” says resident Pearl Slade.

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Getting it Right in the Ring of Fire – by Anna Baggio (Huffington Post – September 30, 2013)

Few of you reading this will ever see Ontario’s Far North. Yet this vast region matters to everyone as much as their own backyard. As one of Earth’s last great, undisturbed expanses of forest and wetlands, the Far North regulates the climate, stores and cleans huge quantities of fresh water, and sustains animal and bird species being decimated elsewhere. It’s home to 24,000 First Nations people who rely on the land and have an inherent right to determine its future.

While they pay lip service to environmental protection and First Nations, governments and industry have been rushing to exploit the Ring of Fire’s mineral riches in the conventional way that’s caused so much destruction around the planet. We must ensure industrial activity is allowed only after thorough assessments of all its impacts and in a manner that sustains this irreplaceable environment and the people who inhabit it.

You’ve likely heard about the Ring of Fire boom in Ontario’s Far North. What seemed a race to extract chromite, nickel and other minerals from beneath the pristine boreal forest and tundra appears to have slowed to a stroll.

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The merger of the century – by Diane Francis (National Post – September 30, 2013)

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

“The problem for Americans as well as Canadians is that foreign governments, and their vassal
corporate entities, have established themselves in Canada and are nibbling away at resource
assets … Their targets include resources, farmland, market access and iconic corporations,
assets that they do not allow Canadian or American individuals, corporations or governments
to acquire in their own countries.” (Diane Francis, National Post, September 30, 2013)

In her new book, National Post columnist Diane Francis makes the case for the U.S. and Canada forming a united North America

The 9/11 attacks and the financial crisis that started in 2008 damaged the economies of Canada and the United States, and accelerated the decline of most wealthy democracies. Throughout it all, emerging economies, led by China and India, did not skip a beat. Between 2000 and 2010, they grew by an average of 6% per year, while developed nations posted an average of only 3.6%, according to The Economist’s “Power shift” report.

By 2030, Brazil, Russia, India and China could overtake the U.S., Japan, Germany, Italy, Britain, France and Canada in economic size. And these seven nations, the original G7, cannot catch up because of debt, demographics, resistance to change and an inability to recognize and counteract the strategies of their rivals.

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Saskatchewan’s history of potash, politics and profit (Regina Leaderpost – September 28, 2013)

1943: Geological surveys and exploratory drilling reveals that Saskatchewan has one of the largest potash deposits in the world.

1951: First commercial production potash mine is attempted by Western Potash Corporation Limited in the Unity district. Numerous delays and flooding make the project unsuccessful.

1958: Potash is first produced by Potash Company of America (PCA) near Saskatoon. The mine floods the next year and does not return to production until 1965.

1960: 1970: Potash production in Saskatchewan has been continuous since 1962: Ten mines are built in Saskatchewan for less than $300 million by six different companies. Referenced by: company name, location (year of initial production). Potash Company of America, Saskatoon (1958); International Minerals and Chemical Corporation (IMC), Yarbo K-1 (1962); Kalium Chemicals Limited, Belle Plaine (1964);

IMC, Gerald K-2 (1967); Allan Potash Mines, Allan (1968); Duval Corporation of Canada, Saskatoon (1968); Alwinsal Potash of Canada Limited, Guernsey (1968); Central Canada Potash, Colonsay (1969); Cominco Ltd., Vanscoy (1969); Hudson Bay Mining and Smelting Co. Limited, Rocanville (1970).

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Exploration and Co-Operation: When Mining Companies and First Nations Work Together – by Thomas F. Morris (Huffington Post – September 29, 2013)

Since joining Northern Superior Resources in 2002 (formerly Superior Diamonds) as President and CEO, I have applied my strong belief that First Nations must be meaningfully consulted and actively engaged in exploration programs. These exploration programs, after all, take place in the back yards and across the traditional territories of Aboriginal communities where Northern Superior explores.

To respect the traditional land uses of these communities is absolutely essential. We actively strive to prevent disturbances to areas that are sacred to the community or where important community events occur. At the same time, it is also very important for First Nation communities to understand what exploration is all about and the limitations of a junior mining company.

Insufficient consultation can seriously impact an Aboriginal community’s rights, way of life, and culture in a negative and hurtful way. This is a reality the industry is at long last coming to understand. But where work is still required is in ensuring that Aboriginal communities understand the tremendous impact they can have on a junior exploration company.

If the community does not respect nor appreciate the positive intentions of the company as well as their financial reality, expectations become unmanageable and opportunities for progress disappear.

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Ring Of Fire Project: For First Nations, Disruption Is Certain, Profits Less So – by Sunny Freeman (Huffington Post – September 30, 2013)

WEBEQUIE FIRST NATION, ONT. — A bald eagle soars from the east between the evergreen branches of an uninhabited island in Ontario’s Far North and swoops in front of a fisherman’s small aluminum boat.

Another eagle flaps nearby as the boat speeds toward fertile fishing grounds. Sightings of the majestic bird on this fly-in First Nation reserve have become more frequent, just as at-risk woodland caribou have started trekking through Webequie’s land.

So have wolves. And last winter, a wolverine — another threatened species — was spotted on the ice road connecting the community on the skinny northern tip of Eastwood Island to the nearest town 250 kilometres southwest.

Some say the eagles, the wolves and the caribou signal that wildlife is fleeing the Ring of Fire, an area of mining development that has been dubbed “Canada’s next oilsands.” The boggy region in the James Bay lowlands is less than 90 kilometres southeast of this reserve, and in one of the world’s last undisturbed forests. It is farther north than most Canadians have ever travelled.

At the moment, the Ring of Fire is little more than a 20-kilometre strip of discoveries surrounded by prospectors’ stakes, drilling equipment and dirt roads in the midst of a marsh.

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Commentary: Surveying the landscape of Ontario’s new mining regime – by Madeleine J.M. Donahue and Jean Piette (Northern Miner – September 27, 2013)

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

In Ontario, the new and amended regulations under the Mining Act described in our legal update in September 2012 have since come into force, and Ontario has developed four policies relating to Aboriginal consultation that further clarify the government’s expectations. Junior exploration companies have already experienced the effects and

challenges of this new regime more significantly than majors or companies with advanced exploration projects.

This is a transition period for Ontario’s regulatory regime — one that requires patience, goodwill, education and the ongoing co-operation of all parties if the reforms are to achieve the positive results the government is hoping for. These include greater clarity, less confrontation, enhanced respect for existing Aboriginal and treaty rights, protection of sites of Aboriginal cultural significance and improved prosperity for First Nations communities.

Let’s examine the most important aspects of the new regime:

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Dirty politics unfairly singles out Canada’s oil sands – by Claudia Cattaneo (September 28, 2013)

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

Much like the Keystone XL debacle in Washington, the EU’s proposed Fuel Quality Directive illustrates the hypocrisy of climate change politics — tough to sell at home, the pain of reducing greenhouse gas emissions is pushed abroad to feign the appearance of progress.

How else to explain that of all the things the European Union and the United States could be doing to clean up their own carbon mess both seem so hung up on punishing Canada’s oil sands?

And so just like the U.S. is dragging its feet on approving the Keystone XL pipeline between Alberta and Texas to fan the illusion among the green classes that it’s doing something about the climate, the EU is attempting another vote later this year on a fuel quality directive (FDQ) that singles out the oil sands — and no other oil sources.

It’s dirty politics. The pending vote is such a worry to Alberta that two senior ministers are heading for another tour of European capitals, at a cost of $85,700 to taxpayers, to try yet again to expose the imbroglio. They are latest of many trips to European countries over the past few years by Alberta and federal government representatives.

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Commentary: Resource nationalism and mining reforms: An increased potential for international disputes – by Harry Burnett, Caline Mouawad and Louis-Alexis Bret (Northern Miner – September 26, 2013)

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

Ernst & Young listed resource nationalism as the number one risk threatening the mining sector in 2013, a sharp increase over five years ago when resource nationalism appeared at the bottom of Ernst & Young’s top 10 list of business risks facing the mining and metals sector.

Amidst a struggling global economic context, increasing mineral and metal prices over that period have fueled host governments’ efforts to seek a greater take from the mining sector. These efforts have translated into a new wave of mining reforms imposing or increasing royalties and mining taxes, introducing local beneficiation requirements under penalty of increased export levies, or limiting foreign ownership of mining assets.

These contemplated or newly-enacted mining reforms have generated uncertainty and have caused mining projects around the world to be deferred or cancelled altogether. These reforms — with their dramatic impact on existing projects’ risk/reward equation — have caused, and are likely to continue to cause a significant number of international disputes between international mining companies and resource-rich host governments including Peru, Bolivia, Venezuela or Mongolia.

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Commentary: Quebec’s evolving mining regime – by Madeleine J.M. Donahue and Jean Piette (Northern Miner – September 26, 2013)

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

Quebec has been making further strides in updating its mining regime to reflect the province’s needs, realities and political priorities.

The Quebec government recently took three major steps towards this goal by: tabling a proposal in May 2013 to change the mining royalty regime; introducing Bill 43 on May 29, 2013, to replace the current Mining Act, which dates back to 1987; and passing amendments on July 23, 2013, to the Regulation to amend the Regulation respecting mineral substances other than petroleum, natural gas and brine in order to set new rules concerning the financial guarantees required for the restoration of mining sites.

Mining royalties

In May, the government tabled its proposal to change the mining royalty regime to increase the return on mining royalties for Quebec. It decided to require all mining operators to pay a minimum mining royalty, called the minimum mining tax, and a progressive tax on mining profits. The minimum mining tax will be 1% of the total output at the shaft head below or equal to $80 million and 4% of each dollar in excess of the $80 million threshold. The minimum mining tax paid can be carried forward and applied against the tax on future mining profits.

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