Canadian mining companies find niches in smaller African countries – by Geoffrey York (Globe and Mail – February 11, 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.

CAPE TOWN — At Africa’s biggest mining conference, foreign investors can’t avoid the electricity crisis. The shortage is obvious even in their swish Cape Town hotels, where their rooms are often plunged into darkness from rolling blackouts.

Africa’s traditional mining powers, South Africa and Zambia, are under siege from a range of self-inflicted problems these days. South African miners are plagued by worsening electricity rationing and persistent labour unrest, while Zambia is facing a revolt from foreign mining companies after it tripled its royalty tax rate to 20 per cent last month.

While political leaders from both countries were struggling to soothe jittery investors at the African Mining Indaba this week, many Canadian miners are instead finding their own niches in smaller and more obscure African countries – some of which were considered too unstable or risky for investors until recently.

On Tuesday, senior cabinet ministers from South Africa and Zambia took to the stage at the mining conference to put a positive spin on their trouble-plagued mining sectors. But neither was able to offer much to placate the industry.

South African Mineral Resources Minister Ngoako Ramatlhodi admitted that his country faced “power challenges” – a mild term for electricity shortages that have caused substantial losses for many mining companies.

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Another mining company endorses Kaska resource law – by Nancy Thomson (CBC News North – February 11, 2015)

http://www.cbc.ca/news/canada/north

Kaska law will govern use of resources on traditional territory

A lawyer who represents the Kaska says Yukon Premier Darrell Pasloski may not understand how the Kaska have the inherent right to self govern. Steve Walsh was referring to comments made recently by Pasloski.

The premier told CBC News that because the Kaska haven’t signed a final land claim and self government agreement, they still fall under the Indian Act, and can’t pass their own laws.

The five Kaska First Nations have issued a declaration, saying they will pass a Kaska resource law this summer. They say it will be used to govern the use of resources on Kaska territory. Walsh says the Constitution clearly outlines the rights of First Nations when it comes to governing themselves.

“I was very surprised to hear Premier Pasloski refer to the Indian Act .. the inherent right of self government was recognized by the government of Canada 20 years ago in 1995,” he says.

“It’s a right protected under section 35 of the Constitution Act 1982 as an existing aboriginal right. So the question whether the Kaska can pass a resource law has nothing to do with the Indian Act, it has to do with their inherent right of self government.”

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Disputed Land Claims The Greatest Deterrent To B.C. Mine Investment – by Ravina Bains and Taylor Jackson (Huffingtion Post – February 6, 2015)

http://www.huffingtonpost.ca/british-columbia/

Ravina Bains and Taylor Jackson are Fraser Institute policy analyists.

More than 10,700 British Columbians were employed in the mining sector in 2013 with an average salary and benefits totalling $114,600. That same year, the mining industry contributed $511 million in revenues to the B.C. government. However, the industry faces an uncertain future.

Depreciated commodity prices, a tough financing market for juniors, and a slowdown in global demand will make it difficult to attract mining investment in the near-term.

Last week the B.C. government announced that it will establish a Major Mines Permitting Office to streamline the permitting process for the industry. But a lengthy permitting process is not the biggest policy issue hampering mining investment in the province. That distinction belongs to disputed land claims — the greatest deterrent to investment in B.C.

According to the Fraser Institute’s Annual Mining Survey, in terms of pure mineral potential, B.C. ranks in the top five most attractive jurisdictions in the world. However, when government policy (or lack thereof) is added to the equation, B.C. starts to lag behind similar jurisdictions.

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Future starts to look bright for mining companies – by Martin Cash (Winnipeg Free Press – February 10, 2015)

http://www.winnipegfreepress.com/

THE ownership of two of the most promising mineral-exploration projects in the province continue to lay the groundwork for what they hope will eventually become producing mines.

Mega Precious Metals Inc. announced a 5,000-metre winter drill program at its Monument Bay gold and tungsten project, located about 60 kilometres northwest of Red Sucker Lake in northeastern Manitoba.

A company spokesperson said the exact capital investment in the program is not known but said this year’s drilling program is fully funded. The Thunder Bay-based company has about $4 million in its bank account.

The company has been laying the groundwork for a preliminary economic assessment of its gold deposit that currently sits at 2.1 million ounces measured and inferred.

Mega has a funding arrangement with Pacific Road Capital out of Australia. When milestones are met and both sides agree to the disbursements, the company could have as much as $40 million at its disposal. But with Mega’s current share price down at five cents, it’s likely too dilutive and not the right time for the next tranche from Pacific Road.

Farther west in northern Manitoba, Carlisle Goldfields is a little further along in the redevelopment of its gold mines near Lynn Lake, about 740 kilometres northwest of Winnipeg.

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Zambia’s tax regime keeps lid on First Quantum spending plans – by Geoffrey York (Globe and Mail – February 9, 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.

CAPE TOWN — With no sign of compromise from Zambia on a controversial royalty tax regime, First Quantum Minerals Ltd. says it will prolong its suspension of more than $1-billion in mining investment plans in the African country.

The Vancouver-based company, whose investments in Zambia include a majority stake in Africa’s biggest copper mine, is among the Canadian miners that were heavily affected by Zambia’s decision to triple its open-pit mining royalty rate to 20 per cent from 6 per cent last month.

Some analysts had predicted that Zambia might roll back some of the royalty hike after its presidential election last month, but government leaders are giving no hint of a reversal so far.

“They’re sticking to their guns,” Matt Pascall, operations director for First Quantum, said in an interview on Monday. “All the latest statements by the minister of finance, and even the president, indicate no change.”

First Quantum had planned an expansion of its biggest Zambian asset, the Kansanshi copper mine, and a smelter, but those investments are now “still on hold,” Mr. Pascall said.

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IRS targets uranium producer Cameco as CRA tax dispute intensifies – by Peter Koven (National Post -February 9, 2015)

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

The U.S. Internal Revenue Service is demanding back taxes from Cameco Corp., adding to the miner’s ever-growing tax woes ahead of a crucial trial expected next year.

The IRS believes the revenue reported by Cameco’s Swiss subsidiary, Cameco Europe Ltd., is inadequate and that a portion should be taxed back in the U.S. at a much higher level. The claim is similar to the one made by the Canada Revenue Agency (CRA), which is trying to shift Cameco Europe’s revenue to Canada and apply a debilitating collection of back taxes and penalties.

Cameco insists it has done nothing wrong. But the Saskatoon-based miner said that if it loses the CRA dispute, the amount of back taxes and transfer-pricing penalties could amount to as much as $1.5-billion, with other penalties added on top. That would be a devastating blow to the company.

The IRS demand is much smaller, as it seeks to collect US$32-million from Cameco that it feels it was owed in 2009. It is also auditing tax returns from 2010 to 2012, and Cameco expects the U.S. agency to make similar claims for those years.

While the IRS demands are insignificant compared to those of the CRA, some experts think the IRS move against Cameco could bolster the CRA’s case. At the very least, it gives the company another sizable headache to deal with.

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Alaska tribal groups push for study on B.C. mine safety (Canadian Press/CTV News – February 9, 2015)

http://www.ctvnews.ca/

KETCHIKAN, Alaska — A coalition of aboriginal tribes in southeast Alaska is calling for a Canada-U.S. commission to study the impacts of British Columbia’s mining industry on shared waters because of last summer’s collapse of a tailings-pond dam.

Some 14 tribes have formed the United Tribal Transboundary Mining Work Group to urge both governments to evaluate B.C. mining-safety practices through the International Joint Commission.

The call follows the release of an independent report in late January that blamed an inadequately designed dam for the Aug. 4, 2014 incident that saw 24 million cubic metres of silt and water flow into nearby lakes and rivers at the Mount Polley open-pit, gold-and-copper mine near Williams Lake, B.C.

“Alaskans, we’re not at all convinced that B.C. can do all this mining without harming us,” said Carrie James, the group’s co-chair. “Environmental safeguards in B.C., they’ve been weakened over the past decade.”

The group’s main concern is its $1-billion fishery, located downstream from several large-scale mining projects, James said. They want an investigation into any potential long-term effects on the fish and other wildlife located along the transboundary rivers.

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Tahoe to Buy Rio Alto for $1.09 Billion to Add Peru Gold – by Simon Casey and Liezel Hill (Bloomberg News – February 9, 2015)

http://www.bloomberg.com/

(Bloomberg) — Tahoe Resources Inc. agreed to buy Rio Alto Mining Ltd. for about C$1.35 billion ($1.09 billion) to add the La Arena mine in Peru in the gold industry’s biggest takeover in almost 10 months.
The cash-and-stock offer is valued at C$4 a share, or 22 percent more than Vancouver-based Rio Alto’s Feb. 6 closing share price, both companies said Monday in a statement.

Unlike many other precious-metal miners struggling amid recent commodity-price declines, Tahoe has gained financial strength after its Escobal silver mine in Guatemala started commercial production in January. The Reno, Nevada-based company’s cash balance jumped more than eightfold in the first three quarters of 2014. It announced its first dividend payment in November.

The enlarged company will have no net debt and its market capitalization will appeal to a larger group of institutional investors, attract more coverage from analysts and improve share trading liquidity, Tahoe and Rio Alto said.

“The combination would arguably create an intermediate multi-mine producer with low production costs, a strong balance sheet with net cash, and with a genuine growth profile,” said Daniel Earle, a Toronto-based analyst at TD Securities Inc.

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The supermaterial that could launch a revolution – by Joseph Hall (Toronto Star – February 7, 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.

Graphene, a material that can be derived from the lead in an ordinary pencil, is on the cusp of transforming everything from touchscreens to tennis rackets.

In a lab off of a shaft-like corridor below the University of Toronto’s old Lassonde Mining Building, PhD student Changhong Cao is employing some strikingly humble equipment: Scotch Tape.

Surrounded by a nuclear microscope and high-powered computers, the mechanical engineer uses the Christmas wrapping staple to peel off the top layers from a square of graphite the size of a Scrabble tile.

That’s the same sort of carbon-based graphite at the centre of every ordinary pencil you’ve ever used. Then, repeatedly folding fresh segments of the tape over the captured graphite smudge, Cao peels off more and more of the carbon layers originally deposited on the sticky surface.

The resulting material — known as graphene — is the strongest on Earth and may now be on the cusp of transforming the world.

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Afghanistan’s dilemma: copper or culture – by Lynne O’Donnell (Associated Press/Regina Leader Post – February 7, 2015)

http://www.leaderpost.com/index.html

Mining could endanger treasures

Treasures from Afghanistan’s largely forgotten Buddhist past are buried beneath sandy hills surrounding the ancient Silk Road town of Mes Aynak – along with enough copper to make the land glow green in the morning light.

An estimated five million tonnes of copper, one of the biggest deposits in the world, could provide a major export for a war-ravaged country desperately in need of jobs and cash. But the potential bonanza could endanger rare artifacts that survived the rule of the Taliban and offer a window into Afghanistan’s rich pre-Islamic history.

“The copper mine and its extraction are very important. But more important is our national culture,” said Abdul Qadir Timor, director of archeology at Afghanistan’s Culture Ministry. “Copper is a temporary source of income. Afghanistan might benefit for five or six years after mining begins, and then the resource comes to an end.”

The government is determined to develop Afghanistan’s estimated $3-trillion worth of minerals and petroleum, an untapped source of revenue that could transform the country. The withdrawal of U.S.-led combat forces at the end of 2014 and a parallel drop in foreign aid have left the government strapped for cash. It hopes to attract global firms to exploit oil, natural gas and minerals, ranging from gold and silver to the blue lapis lazuli for which the country has been known since ancient times.

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B.C. conservation officers raid two sites in Mount Polley investigation – by Sunny Dhillon (Globe and Mail – February 4, 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.

VANCOUVER — Conservation officers investigating the Mount Polley mine spill have finished raiding two sites, though it remains unclear what charges could be laid, or when.

Officers executed search warrants at the mine, near Williams Lake, and the company’s Vancouver office on Tuesday. The spill occurred in August, when 25 million cubic metres of water and mining waste breached a tailings pond and entered Polley Lake and Quesnel Lake.

The investigation is being led by the B.C. Conservation Officer Service, a government agency that focuses on natural resource law enforcement and human-wildlife conflicts.

Chris Doyle, an agency inspector, said Wednesday he could not indicate when the investigation would be complete. “We don’t have a firm timeline, just due to the complexity of the investigation. The goal is obviously to gather the best evidence possible,” he said in an interview.

Mr. Doyle was tight-lipped when asked what officers were hoping to recover from the raids. More than 70 officers were involved, he said.

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Canadian’s trust in corporate leaders drops to lowest level since 2008, report says – by Theresa Tedesco (National Post – February 3, 2015)

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

Canadians want more government regulation of the food and beverage, banking and health industries at a time when public confidence in business and corporate leaders is waning, according to global research released by public relations giant Edelman.

Trust levels declined dramatically in the past year in Canada to thresholds not seen in this country since the financial crisis in 2008, according to the annual Edelman Trust Barometer. Only 47% of Canadian respondents said they trusted business, down significantly from 62% in 2014, while confidence levels for chief executive officers dropped to 28% in Canada in early 2015, down from 33% in 2014.

“These numbers signal the economic recovery may be over,” said Richard Edelman, chief executive of Edelman, which publishes the survey results. “Certainly Canada’s economy is softer this year than it was last year.”

In total, 33,000 people were surveyed in 27 countries and, overall, 57% of the respondents said they trusted business, slightly down from 59% in 2014. However, businesses’ credibility slide below the 50% threshold on a global scale was registered in more than half of the countries surveyed by Edelman– the worst reading since 2008. The largest double-digit declines of 10 percentage points or more were found in Canada, Germany, Australia, and Singapore.

The opposite was true in the U.S., where confidence in business rose to 60% from 58% in 2014, as the American economy continues its recovery.

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TransCanada CEO says Canada needs to resolve conflicts over pipelines – by Jeff Lewis (Globe and Mail – February 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.

CALGARY — Canada’s push to become a global resource powerhouse is at risk of failing unless government leaders take action to resolve the many conflicts holding up key projects, the head of the company behind the Keystone pipeline says.

TransCanada Corp. chief executive officer Russ Girling said Wednesday that Canada faces fundamental choices about the future of the country’s economy, including questions around aboriginal relations, resource extraction and pipeline development.

Those issues have pitted industry against opponents, transforming once-staid pipeline hearings into a forum for oil sands critics. Meanwhile, infrastructure projects are shouldering long-standing aboriginal grievances with the federal government, Mr. Girling said in a meeting with The Globe and Mail’s editorial board.

“We’ve got to quit the little bickering that goes on between us and get to the bigger picture and let the institutions that we charge with managing the public good get on with doing their job,” he said.

His comments point to the growing frustration in the energy sector as Alberta’s oil patch braces for an extended slump due to the dramatic plunge in crude prices.

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Opinion: As Plan Nord moves forward, warning signs from Yukon – by Jax Jacobsen (Montreal Gazette – February 4, 2015)

http://montrealgazette.com/

Philippe Couillard’s government announced Jan. 26 that it would host an international symposium at the end of February to advance its Plan Nord program.

The plan envisions spending $80 billion in investment over 25 years, with $33 billion going to expand the mining sector and $47 billion to develop energy resources. The plan was first introduced under Premier Jean Charest, and was resuscitated by Couillard’s Liberals with amendments and an additional $1 billion investment in Quebec contracting firms for the production of mining equipment.

The symposium will be held from Feb. 25 to Feb. 27 in Quebec City and will bring in international experts for discussions on economic development and sustainability in northern Quebec, all part of the soon-to-be unveiled Liberal plan to bring economic wealth to the north of the province.

These international experts — among whom will be the president of Iceland — will grapple with the challenge of developing the region’s mineral and other resource wealth, all while preserving the environment and countering the consequences of climate change, expected to have a larger impact on the northern community.

But as the Liberal government formulates its northern policy, it should keep a close eye on what has happened in the Yukon this week before they bank too heavily on counting on the mining sector to bring lasting prosperity to the north.

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AME BC president: ‘Hang on to your seat’ in next upswing – by Matthew Keevil (Northern Miner – February 3, 2015)

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

VANCOUVER — It’s been a tough few years for mineral explorers globally, and the junior markets in B.C. have been especially hard hit by stingy capital markets and industry-wide budget cuts. These circumstances set a rocky stage for the Association for Mineral Exploration British Columbia’s (AME BC) annual Mineral Exploration Roundup conference in Vancouver in late January, but according to president and CEO Gavin Dirom there are reasons for industry optimism.

To begin, there are some basic business metrics that AME BC relies on to determine how Vancouver’s third-largest annual trade convention is trending. The 32nd Roundup attracted more than 6,700 participants from 35 countries, blowing past the 5,000-delegate milestone, and up 100 from last year. Dirom added that, despite the industry’s challenging conditions, event sponsorship remained right on target.

“Of course exploration expenditures are down globally, as there just isn’t the capital to pursue these extensive programs,” Dirom said during an interview on the conference floor. “The big trend to watch, however, is the percentage of expenditures per jurisdiction. I think by that metric it’s quite interesting from a B.C. context.”

This approach removes variables like commodity prices and related factors, he said, and focuses on where the industry is willing to invest in exploration.

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