Canadian Media Resource Articles – Page 602

A company where copper is as good as gold – by David Milstead (Globe and Mail – February 14, 2015)

February 17, 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.

New Gold Inc. is, as its name suggests, a gold miner. But it’s another metal, copper, that plays a large role at the company – perhaps larger than a casual investor might suspect.

How so? New Gold’s New Afton mine, west of Kamloops, B.C., produces twice as much copper than gold, in dollar terms. That allows New Gold, quite legitimately, to report extraordinarily low company-wide mining costs, much lower than at its properties where gold dominates.

The role of copper at New Gold offers a window into how “byproduct accounting,” as it’s called, can impact miners’ financial statements. And it raises an important point for New Gold’s shareholders: To evaluate the company’s prospects going forward, it’s essential to keep an eye not only on the bullion that gives the company its name, but on the lesser metal that provides New Gold much of its cost advantage.

To be clear: The copper factor is not hidden. Investors can plainly see the effects by carefully reviewing the miner’s reports. New Gold released its preliminary 2014 numbers earlier this month, with full results to come Feb. 20. New Gold reported all-in sustaining costs (AISC), a number designed to capture the true long-term cost of mining, of $845 (U.S.) per gold ounce in the fourth quarter.

Ottawa’s lump of coal: Search for buyer of Ridley terminal drags on – by Brent Jang (Globe and Mail – February 16, 2015)

February 17, 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 — In late 2012, Ottawa placed a prized coal export terminal up for sale in anticipation of fetching a huge sum for the federal asset in northwestern British Columbia.

While coal prices had softened from record highs in 2011, Ridley Terminals Inc.’s business prospects looked solid, with forecasts for years of rising supplies transported by train from coal producers in northeastern B.C.

But what seemed like a jewel of a Crown corporation valued at more than $1-billion by industry experts 26 months ago looks more like a lump of coal today.

Ridley is struggling through an industry slump that has seen coal prices collapse, hurt by slower-than-expected demand in Asia and a global supply glut. The terminal is expected to suffer a hefty drop in shipments from the West Coast this year.

Ottawa, through Canada Development Investment Corp., is still looking for a buyer. The federal government’s quest to sell comes as coal prices languish at multiyear lows while northeastern B.C. producers have halted production.

Ottawa sends $2M in bottled water to First Nation – by Joanna Smith (Toronto Star – February 15, 2015)

February 17, 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.

Marten Falls First Nation, a remote reserve that’s been under a boil-water advisory since 2005, relies on water bottles flown in by the government.

OTTAWA—The Conservative government has spent at least $2 million flying bottled water to a small aboriginal community in northern Ontario that has been without its own source of drinkable water for a decade.

“All of our landfill is filled with plastic bottles,” Linda Moonias, the band manager of Marten Falls First Nation, a fly-in reserve about 500 kilometres northeast of Thunder Bay, Ont., said in a telephone interview Friday.

“It’s totally ludicrous,” said Bruce Achneepineskum, the interim chief of the reserve near the proposed Ring of Fire mining development.

Aboriginal Affairs and Northern Development Canada has been reimbursing Marten Falls for the cost of sending bottled water from Thunder Bay by airplane since Health Canada issued a boil-water advisory for the remote community of about 335 people on July 18, 2005.

Teck Resources Ltd maintains steady course amid commodity volatility – by Peter Koven (National Post – February 13, 2015)

February 13, 2015

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

Plenty of companies across the resource sector are panicking, but not Teck Resources Ltd. As its rivals slash outputs, cancel projects and suspend dividends, Vancouver-based Teck is maintaining the same steady course that it has throughout the recent bout of commodity price volatility.

As a result, there were no radical changes to be found in the miner’s fourth-quarter earnings on Thursday. Teck did not reduce its $518-million dividend payout, it did not announce any job reductions or sweeping production cuts, and it maintained a commitment to the costly Fort Hills oil sands project.

“We have continued to execute well by controlling the controllable,” chief executive Don Lindsay said on a conference call on Thursday.

Specifically, that means chipping away at operating costs while preserving liquidity. The company has achieved $640-million of savings under its current cost reduction plan, and has reduced unit costs at 10 of its 13 operations. The balance sheet is in good shape with $1.7-billion of cash and an untapped US$3-billion credit facility.

All the same, the stock has been pummelled.

Rio Tinto’s aluminum division was mining giant’s best performer in 2014 – by Ross Marowits (Canadian Press/Winnipeg Free Press – February 12, 2015)

February 13, 2015

http://www.winnipegfreepress.com/

MONTREAL – After years of challenges, Rio Tinto’s aluminum division proved to be the mining giant’s best performer in 2014.

Underlying profits at the Montreal-based operations soared 124 per cent to US$1.25 billion, dramatically outpacing iron ore, copper, diamonds and energy, the company said Thursday.

Rio Tinto (NYSE:RIO) attributed the improvement to continuing cost reductions, productivity improvements, higher prices for valued-added products and weaker currency in Canada and Australia.

Aluminum was one of the few metals to see a price increase last year. On the London Metal Exchange, aluminum averaged US$1,867 per tonne in 2014, up one per cent.

Rio Tinto said value-added products, which represent 62 per cent of metal produced, allowed it to realize US$2,395 per tonne. Overall, the company’s underlying profits decreased nine per cent to US$9.3 billion, including a US$4.2-billion hit from lower metal prices, offsetting currency gains.

Indigenous Canadians Are Fighting the Uranium Mining Industry – by Michael Toledano (Vice Canada – February 11, 2015)

February 12, 2015

http://www.vice.com/en_ca

This post originally appeared on VICE Canada.

On November 22, 2014, a small group of Dene trappers called the Northern Trappers Alliance set up a checkpoint on Saskatchewan’s Highway 955, allowing locals to pass while blockading the industrial traffic of tar sands and uranium exploration companies. On December 1, officers of the Royal Canadian Mounted Police descended on the site with an injunction from the province and forcibly dismantled the blockade.

Eighty days later, the trappers remain camped on the side of the highway in weather that has routinely dipped below -40 C. They are constructing a permanent cabin on the site that will be a meeting place for Dene people and northern land defenders.

“We want industry to get the hell out of here and stop this killing,” said Don Montgrand, who has been at the encampment since day one and was named as one of its leaders on the police injunction. “We want this industry to get the hell out before we lose any more people here. We lose kids, adults, teenagers.”

“They’re willing to stay as long as it takes to get the point across that any of this kind of development is not going to be welcomed,” said Candyce Paul, the alliance’s spokesperson and a member of the anti-nuclear Committee for the Future Generations. “It’s indefinite.”

Kinross Gold Corp puts massive Tasiast project expansion on ice – by Peter Koven (National Post – February 11, 2015)

February 12, 2015

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

TORONTO – Kinross Gold Corp. confirmed Tuesday it will not proceed with the massive Tasiast expansion project in Mauritania as the gold price remains weak and the company tries to preserve its balance sheet.

Chief executive Paul Rollinson described it as a “prudent” move that is in the best interests of shareholders. In an interview, he noted that the construction period at Tasiast is expected to last 35 months, and there is a chance the gold price could drop significantly during that period and leave the company short of capital to finish the job.

Gold needs to be higher for this project to make good sense. According to a technical report filed by Kinross last year, Tasiast has a net present value of just US$500-million at a gold price of US$1,200 an ounce (very close to the current level). That does not provide a great return on a project that is expected to cost US$1.6-billion.

“This is a major capital expansion and I want to be extremely disciplined as we contemplate embarking on that expansion,” Mr. Rollinson said in an interview. He added that he continues to look at ways to improve the project.

But this news closes the book on Tasiast for the time being. The project has simply been a disaster for Kinross. The Toronto-based miner acquired Tasiast in 2010 when it spent US$7.1-billion to buy Red Back Mining Inc.

Eagle Spirit pipeline plan obtains ‘licence’ as B.C. First Nations chiefs sign on to project – by Claudia Cattaneo (National Post – February 12, 2015)

February 12, 2015

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

Just as proposed bitumen pipelines through British Columbia seemed hopeless because of widespread opposition, backers of the aboriginal-led Eagle Spirit pipeline plan announced a major breakthrough Wednesday. The group has solid support from the province’s First Nations for its $14-billion-to-$16-billion project linking Alberta’s oil sands to the West Coast and an invitation to the oil community and the Alberta government to get on board.

What made the difference? The one million barrel-a-day pipeline plan, plus a possible refinery that would cost extra, started with getting First Nations involved, offering them a large equity stake, and obtaining their ‘social licence.’ There were also growing concerns about transportation of oil by rail, which aboriginals see as inevitable if oil pipelines aren’t built. And there was encouragement from Alberta First Nations familiar with resource development and benefiting from the oil sands business.

“We are very cognizant of how important this is to Canada, and Alberta in particular, and we have a solution,” Calvin Helin, chairman and president of Vancouver-based Eagle Spirit Energy Holdings Ltd., and a member of the Tsimshian First Nation in northwestern B.C., said Wednesday at a news conference in Calgary. “The chiefs came out today to say they are prepared to be partners.”

First Nations issue $127M bill to Ontario for extracted resources – by Jody Porter, CBC News Thunder Bay – February 11, 2015)

February 11, 2015

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

Nishnawbe Aski Nation calculates value of centuries of mining, forestry on its traditional territory

The Nishnawbe Aski Nation is resubmitting an unpaid bill in the amount of $127 million to Ontario as part of the province’s budget consultation process.

The provincial treaty organization, representing 49 First Nations in northern Ontario, hired York University economics professor Fred Lazar to calculate the current value of resources extracted from its traditional territories between 1911 and 2011.

In Lazar’s 2012 report he pegged the figure at 3.2 billion dollars, and then broke that down to an annuity, with a four per cent interest rate, that would amount to 127 million dollars per year, in perpetuity.

Nisnawbe Aski Nation Deputy Grand Chief Les Louttit said he doesn’t really expect the province to cut a cheque “but there are ways in which they can invest into Nishnawbe Aski First Nations to improve the value and quality of our lifestyles in our communities.”

Those ways include funding such things as housing, water and sewage treatment or social programs to deal with such things as addictions, Louttit said.

Canadian mining companies find niches in smaller African countries – by Geoffrey York (Globe and Mail – February 11, 2015)

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.

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

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.”

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

February 11, 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.

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

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.

Zambia’s tax regime keeps lid on First Quantum spending plans – by Geoffrey York (Globe and Mail – February 9, 2015)

February 10, 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.

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

February 10, 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.