Twitter

Canadian Media Resource Articles

Falling commodities are crushing the TSX Venture – by David Pett (Regina Leader Post – October 9, 2014)

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

Down 17% in the past month and 65% since 2011

The outsized gains and repeated record highs of the past few years on most global equity benchmarks still far outweigh the mounting losses of the past few weeks. Then there’s the SP/TSX Venture composite index.

Canada’s resource-heavy junior stock exchange is down a nightmarish 65% since peaking in early 2011, including a 17% drop in the past month alone, and it’s hard to envision much of a rebound anytime soon with oil, gold and other commodities still on the skids.

“The underperformance of the Venture will likely continue,” said Arthur Salzer, chief executive at Northland Wealth Management in Markham, Ont. “While it may be a surprise to some investors, the commodity supercycle has ended.”

Historically, bull markets in commodities have lasted 15 to 20 years, but the cycle this time around, which began in the early 2000s, was much shorter.

Mr. Salzer said extreme amounts of capital were raised to finance mining projects around the world during the past 10 years, leading to a vast oversupply of many hard commodities, including iron ore, copper and nickel. “We may have experienced 20 years of financing within a decade’s worth of time,” he said.

Read more

Commodities under pressure as China continues economic realignment – Simon Rees (MiningWeekly.com – October 9, 2014)

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

TORONTO (miningweekly.com) – Commodity prices will continue to face near-term challenges that are linked to the dip in Chinese growth. However, support is likely to come from the country’s new economic agenda, Scotiabank VP and commodity market specialist Patricia Mohr told attendees at the recent Global Chinese Financial Forum.

Gold will come under greater pressure as the US recovery gathers pace, while some opportunities are apparent in base metals, particularly with zinc. “In addition, because of the tremendous expansion in US and Canadian oil and gas production, there are some excellent prospects in the pipeline and railways sectors,” Mohr said.

NEW ORDER

China dominates the global base metals market, accounting for 46% of global demand. Given this, the country’s economic fortunes are closely monitored, with any dip in growth potentially representative of a reduced metals uptake. Chinese gross domestic product (GDP) growth for 2014 will be over 7%, which compares with 7.7% in 2013, Mohr said.

In the long term, support for commodities will come from China’s new economic agenda that was born out of a leadership change in 2013. One of the agenda’s central goals is to spur greater urbanisation to underpin growth and boost further infrastructure investment.

Read more

SPECIAL REPORT: Evangelist Len Lindstrom’s African gold mining venture fails – by Geoff Leo (CBC News Saskatchewan – October 09, 2014)

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

700 Canadians, including Saskatoon’s Dean Britton, lose money in ‘God’s business’

A Saskatoon man who invested his life savings in an African gold mining company run by a globe-trotting Canadian televangelist is worried the entire project may have collapsed.

Dean Britton said for the past several years, evangelist-turned-CEO Len Lindstrom has virtually cut off contact with many of the 700 Canadians who invested at least $18 million in Liberty International Mineral Corporation.

And so Britton has taken it upon himself to research the company and communicate with as many of Lindstrom’s investors as possible. “He is such an expert at only telling his half of the story,” Britton said of Lindstrom. “I’m going to show the other half.”

Mining venture seemed like ‘God’s business’

A decade ago, Britton was tantalized by Lindstrom’s investment pitch of an African gold mine. Lindstrom explained he had licenced 21,000 square kilometres of potentially gold-rich land in Liberia.

Read more

RB Energy shutters Quebec lithium mine as financing fails – by Peter Koven (National Post – October 8, 2014)

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

TORONTO – The Lundin magic touch is paying off right now for Lundin Mining Corp. But it is not doing much for RB Energy Inc.

On Monday, Lundin Mining announced it has put together a US$2.2-billion financing package for a copper acquisition. It was a major achievement in a volatile commodity market, and shows how much faith investors have in chairman Lukas Lundin and his Lundin Group of Companies.

Meanwhile, RB Energy said Wednesday it has to shut down its Quebec Lithium mine because it failed to raise the funds needed to keep it going. Most of the staff were laid off, and three directors resigned.

While not officially listed as part of the Lundin Group, RB shares its Vancouver head office with the Lundins and is led by the same management team that ran Red Back Mining Inc., which was the crown jewel of the Lundin Group. Red Back was sold in 2010 for US$7.1-billion.

The Red Back team, led by chief executive Rick Clark, got control of the Quebec lithium mine early this year through a merger with Canada Lithium Corp.

Read more

The long and short on the stunning drop in oil prices – by Eric Reguly (Globe and Mail – October 9, 2014)

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 — The commodities markets can work in mysterious ways, and oil is certainly doing that now. While the common assumption is that the speculative short positions held by the hedge funds are overtaking the market, they are in fact greatly outnumbered by the speculative long positions. That means more hedgies hope to profit from rising prices than falling ones.

That’s a brave bet when oil prices are in something close to freefall. As oil prices plunge, it is the longs, not the shorts, who are looking vulnerable.

In late September, the speculative long positions on U.S. oil prices – West Texas intermediate (WTI) is the benchmark – was about 420,000 contracts (each contract represents 1,000 barrels). The short positions amounted to only about 130,000 contracts, putting the net speculative long position at 290,00 contracts. That net position is extremely high, historically speaking. What do the longs see that the shorts do not? They could be gambling on an imminent bounce-back in prices. Or they could be dead wrong.

To be sure, the oil glut in North America is not as extreme as it appears elsewhere on the planet; fed by surging shale oil production, newly expanded refineries in the United States are running flat out and exporting a lot of their output, narrowing the traditional price gap between WTI and Brent crude, the latter being the effective global benchmark.

Read more

Government’s suppression of Mount Polley report ‘verges on the absurd’: lawyer – by Justine Hunter (Globe and Mail – October 7, 2014)

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.

VICTORIA — The B.C. government appears to have systemically breached its freedom of information law by withholding information related to the collapse of the tailings dam at the Mount Polley mine, environment lawyers say.

The province has refused to provide recent inspection reports related to the tailings pond, saying such information may undermine any one of three investigations to determine why the dam failed on Aug. 4, sending a torrent of toxic waste and debris into surrounding waterways.

But when provincial officials refused to hand over a 22-year-old report on the Mount Polley mine, the legal director for the University of Victoria’s Environmental Law Centre decided the suppression of information had gone too far.

“The provincial government’s refusal to provide timely access is not only highly troubling, but verges on the absurd,” said Calvin Sandborn in a 60-page submission asking B.C.’s Information and Privacy commissioner Elizabeth Denham for a review of the province’s conduct. The 1992 report was sitting on a shelf in the Williams Lake public library and a helpful librarian eventually sent him a copy.

Read more

How Alberta’s oil patch teamed up with the ‘little guys’ for an end run around Obama – by Rebecca Penty, Hugo Miller, Andrew Mayeda and Edward Greenspon (National Post – October 8, 2014)

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

Bloomberg News – So you’re the Canadian oil industry and you do what you think is a great thing by developing a mother lode of heavy crude beneath the forests and muskeg of northern Alberta. The plan is to send it clear to refineries on the U.S. Gulf Coast via a pipeline called Keystone XL. Just a few years back, America desperately wanted that oil.

Then one day the politics get sticky. In Nebraska, farmers don’t want the pipeline running through their fields or over their water source. U.S. environmentalists invoke global warming in protesting the project. President Barack Obama keeps siding with them, delaying and delaying approval. Keystone has become a tractor mired in an interminably muddy field.

In this period of national gloom comes an idea — a crazy-sounding notion, or maybe, actually, an epiphany. How about an all-Canadian route to liberate that oil sands crude from Alberta’s isolation and America’s fickleness? Canada’s own environmental and aboriginal politics are holding up a shorter and cheaper pipeline to the Pacific that would supply a shipping portal to oil-thirsty Asia. So, instead, go east — all the way to the Atlantic.

Thus was born Energy East, an improbable pipeline that its backers say has a high probability of being built. It will cost $12-billion and could be up and running by 2018. Its 4,600-kilometer path, taking advantage of a vast length of existing and underused natural gas pipeline, would wend through six provinces and four time zones. It would be Keystone on steroids, more than twice as long and carrying one-third more crude.

Read more

Bottom reached as upside potential for gold equities grows, IBK Capital – by Simon Rees (MiningWeekly.com – October 7, 2014)

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

TORONTO (miningweekly.com) – Opportunities for equity investors seeking to achieve gains from the next upcycle, particularly in the gold space, as the bottom in the market is reached, are growing, IBK Capital president and CEO Michael White told attendees at the recent Cambridge House Toronto Resource Investment Conference.

“We believe that we’re at the bottom, although it’s sometimes difficult to appreciate this because of all the noise, [owing to] the bombardment in headlines we receive every day,” he said, adding that while it was important to keep up with current affairs, “you should always keep your eyes on the bigger picture”.

For White, a bigger picture can be found in gold equities. “I can’t tell you when gold equities will turn up, but I know it will happen. This sector is cyclical; it goes up, it goes down, then it goes back up. I know that to be true, I just can’t time it.

“Still, how do I satisfy myself that we’re at the bottom? How do I satisfy myself that the downside is limited or derisked and that there is an upside? Well, I start by looking at things like the S&P-TSX Global Gold Index. When we assess this from 2005 to 2014, it looks like we’re at the bottom,” he said.

White also recommended looking at exploration and considering the valuations of mergers and acquisitions.

Read more

Lundin bulks up on copper with purchase of Freeport mine – by Rachelle Younglai (Globe and Mail – October 7, 2014)

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.

Canada’s Lundin Mining Corp. has agreed to buy a Freeport-McMoRan Inc. copper mine for $1.8-billion (U.S.), a move that will double its production as the red metal slumps on fears of weaker Chinese demand.

Lundin’s deal to acquire 80 per cent of Freeport’s Candelaria mining complex in Chile comes at a rocky time in the mining industry. Mining giants such as Phoenix-based Freeport are trying to divest assets to pay down hefty debt loads incurred during the commodity boom.

Meanwhile, economic growth in China, the world’s largest consumer of copper and other commodities, is slowing. And big new copper mines are expected to start producing next year, which will add to an already well-supplied market and likely weigh on prices for some time.

For Lundin, however, the downturn represents a buying opportunity. The base-metals miner will fund the deal through debt and an equity financing.

Toronto-based mining royalty company Franco-Nevada Corp. will help finance the deal by paying Lundin $648-million for a stream of Candelaria’s future gold and silver production. The Candelaria complex includes an open-pit copper mine, infrastructure and the nearby Ojos del Salado underground copper mines.

Read more

Glencore, Rio Tinto merger whispers leave analysts skeptical over financial details – by Eric Reguly (Globe and Mail – October 7, 2014)

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 — Is Glencore CEO Ivan Glasenberg about to strike again? The great white shark of the global commodities industry is laying the groundwork for a blockbuster deal that would see Glencore Xstrata PLC merge with Rio Tinto Group to create a mining giant that would displace BHP Billiton Ltd. as the world’s top mining company, Bloomberg reported on Monday.

A Glencore spokesman in Switzerland would not confirm or deny that Glencore, the world’s biggest trader of commodities, from coal to grain, is contemplating a merger with Rio Tinto. “No comment,” he said.

Rio Tinto said late Tuesday that it had rejected a merger approach from its smaller rival in August, finally responding to a string of media reports over the past month that have said Glencore wanted to merge with Rio. It also said there had been no further contact between the companies on a merger.

“The Rio Tinto board, after consultation with its financial and legal advisers, concluded unanimously that a combination was not in the best interests of Rio Tinto’s shareholders,” Rio Tinto said in a statement to the Australian stock exchange.

The American depository receipts (ADRs) of Rio shot up 18 per cent after the Bloomberg story appeared, then slipped back for an 8 per cent gain. On the London exchange, Rio shares rose 1.6 per cent, giving it a market value of £56.3-billion.

Read more

INDIGENOUS CANADIANS ARE BLOCKADING A MINE TO PROTEST POLLUTION – by Sarah Berman (Vice.com – October 6, 2014)

http://www.vice.com/en_ca

On Friday, Imperial Metals, the company responsible for Canada’s largest-ever mining waste spill, served an injunction application to indigenous protesters blocking roads to its Red Chris copper and gold mine near Iskut, British Columbia.

A group of Tahltan First Nation elders known as the Klabona Keepers have blocked access to the mine for the second time in two months over concerns that Red Chris is too similar to Mount Polley, a sister mine that spewed 24 million cubic meters of toxic sludge and wastewater into one of the province’s biggest salmon spawning lakes on August 4.

“As a result of the blockades and the conduct of the blockaders, no person and no vehicle are able to access the project site along the access roads,” reads Imperial Metals’ injunction application, which was delivered yesterday morning. “Red Chris has been forced to severely limit its construction activities at the project site, and if the blockade continues, will be forced to halt them altogether.”

Resource companies often use injunctions to break up protests. For example, on October 3, 2013, a company called SWN Resources was granted an injunction to remove Elsipogtog First Nation protesters from a shale gas exploration site north of Moncton, New Brunswick. Two weeks later, the Royal Canadian Mounted Police (RCMP) enforced the injunction with an over-the-top display of force that included beanbag guns, police dogs, snipers, and plenty of pepper spray. Needless to say, shit escalated quickly.

Read more

First Nations chiefs seek to develop new tribal park in B.C. – by Mark Hume (Globe and Mail – October 6, 2014)

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 — The concept of what a park is and how it functions to protect the landscape is being redefined in British Columbia by First Nations in ways that some might find surprising.

At a totem pole-raising ceremony on the weekend, the Tsilhqot’in First Nation announced plans to create Dasiqox Tribal Park, the latest in a series of declarations by native organizations aimed at protecting massive swaths of territory.

Dasiqox covers about 300,000 hectares of some of the most spectacular landscapes in Canada. The Valhalla Wilderness Society, which has long advocated protecting the area, describes it as “a vast mountain enclave for grizzlies” and other wildlife.

Unlike federally designated national parks and provincial enclaves, the First Nations concept in B.C. aims to create protected areas under the jurisdiction of native people, with potential room for resource extraction. While not new, these parks allow First Nations to control logging, mining and other activities in a particular region, which might otherwise be open to unfettered use by business.

In a series of interviews, Tsilhqot’in chiefs made it clear that their idea of what a park is, is very different from what most Canadians might think.

Read more

B.C. signed-off on tailings dam repair after fissure found in 2010 – by Justine Hunter (Globe and Mail – October 5, 2014)

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.

VICTORIA — The owners of the Mount Polley mine say a crack in their tailings dam found in 2010 was almost a kilometre away from the spot where the dam containing toxic waste failed this summer, and the company “fully complied” with a series of recommendations to improve safety in response to that initial fissure.

But NDP Leader John Horgan is calling for the release of technical documents to show just what the company and the province knew about the safety of the dam prior to the Aug. 4 breach in the dam that flushed 24 million cubic metres of water and mine tailings into Quesnel Lake in central B.C.

The last geotechnical inspection by the ministry of mines at Mount Polley took place in September of 2013 and resulted in no orders related to the tailings storage facility, according to ministry officials.

The government has not opened its inspection files, saying it must “protect the integrity and independence” of an independent engineering investigation and inquiry into the tailings pond breach that is expected to be completed in January.

“The most horrific environmental disaster in B.C.’s history wouldn’t have happened if everything was fine,” Mr. Horgan said Sunday. “They are trying to say everything that could be done, was done, but they won’t release the documents to show what they did.”

Read more

Naomi Klein’s revolutionary dreamland – by Terence Corcoran (National Post – October 3, 2014)

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

Parts of Naomi Klein’s new climate-revolution/kill-capitalism manifesto, This Changes Everything: Capitalism vs. The Climate, make for damn good reading. Especially worthy are chapters and sections that explore the group-grope shenanigans of big corporations and pro-business environmental groups as they spent much of the last decade jumping into bed with one another.

But the good bits are not enough to salvage This Changes Everything, a 560-page call-to-arms in which Ms. Klein proposes to overthrow four centuries of Enlightenment-driven human achievement. Down with Francis Bacon, Adam Smith, the scientific method and pretty much all of the core ideas that created the Western world. Notwithstanding all the media attention she’s been getting on the book for the last few weeks, it’s a campaign that’s doomed to fail for any number of reasons.

But there is enough in Ms. Klein’s latest work to keep readers of all ideological stripes engaged, if not enraged. And that includes the free-marketers she wants to put out of business.

A major Klein target is Richard Branson, the media-darling head of Virgin Group who — after a personal PowerPoint presentation from Al Gore on climate change at the Branson mansion — concluded that “we are looking at Armageddon.” Mr. Branson was so alarmed at this pending end of the world shock that he decided to launch a “new Virgin approach to business.” He called it Gaia Capitalism, and made a high-profile pledge at the 2006 Clinton Global Initiative in Manhattan to spend $3-billion to develop bio-fuels as an alternative to climate-destroying oil and gas. Mr. Branson also launched the Virgin Earth Challenge and the Carbon War Room.

Read more

Michael Gravelle on negotiations between mining companies and First Nations – interview by Markus Schwabe (CBC News Sudbury – October 2, 2014)

http://www.cbc.ca/morningnorth/ We contacted the Minister of Northern Development and Mines, Michael Gravelle, to talk about the difficulties in negotiations between mining companies and First Nation communities. Click here for the interview: http://www.cbc.ca/morningnorth/past-episodes/2014/10/02/michael-gravelle-on-negotiations-between-mining-companies-and-first-nations/