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Canadian Media Resource Articles

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.

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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.

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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.

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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.

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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.

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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.

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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.”

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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.

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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/

Mining deals are keeping lawyers humming – by Paul Brent (National Post – October 2, 2014)

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

With global commodity prices in a downward spin, it’s been a tough time to be in the mining game. The economics of big-budget projects have been thrown into question, forcing industry giants to abandon, downsize or sell prized assets.

A multitude of assets on the block and a lack of financial injections from investors have set the stage for a resurgence of acquisition activity for mining this year, dealmakers say.

“There is only one song playing on the jukebox and that is the M&A song,” said Paul Stein, a partner with Cassels Brock & Blackwell LLP in Toronto. “There is little if any financing and unfortunately there are companies that simply will not survive and we have started to see that as well.”

Mr. Stein cited base metals miner Mercator Minerals, which filed for protection from creditors last month, as an example of a casualty of the commodity price crunch.

Size is providing no immunity. Earlier this month diversified mining heavyweight Anglo American PLC said it would entertain takeover offers if the price was right. It is looking to sell assets, just like competitors BHP Billiton PLC and Rio Tinto PLC. Last April rivals Barrick Gold Corp. and Newmont Mining Corp. did the merger dance before a messy and public breakup.

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Canadian coal mine Grande Cache sold for US$2 amid plunging bulk commodities demand – by Peter Koven (National Post – October 2, 2014)

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

The value destruction in the bulk commodities business has been astounding in the last few years and no one knows it better than Asian commodity traders Marubeni Corp. and Winsway Enterprises Holdings Ltd.

Back in 2011, they teamed up to buy Canadian miner Grande Cache Coal Corp. for $1-billion. Grande Cache was the only pure-play coal producer left in Western Canada, and the buyers saw an opportunity to secure a big source of supply in a mining-friendly country.

It turns out not to have been such a wise decision. Marubeni and Winsway are now planning to sell their Grande Cache stakes to an Asian coal firm called Up Energy. Unfortunately for their shareholders, the proposed sale price is a bit less than they paid: US$1. Each.

In a coal market as bad as this one, US$2 may not be such a bargain given the problems the buyer is inheriting.

“When you buy a coal company today, the cash outflows don’t stop when you close the deal,” said George Dethlefsen, chief executive of Corsa Coal Corp. “Even if the buyer is paying a dollar, they may need a good amount of money in reserve to sustain the company over the next 12 to 24 months.”

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Arizona judge recommends Curis’ Florence aquifer permit be rescinded – by Henry Lazenby (MiningWeekly.com – October 1, 2014)

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

TORONTO (miningweekly.com) – Despite explicitly stating facts to the contrary, Arizona administrative law judge Diane Milhasky on Wednesday recommended that the Arizona Department of Water Quality (ADEQ) rescind a temporary individual aquifer protection permit (APP) granted to Florence Copper, the proponent of the in-situ copper recovery, solvent extraction and electrowinning (SX-EW) Florence copper project.

The judge made a nonbinding recommendation in the appeal of ADEQ’s decision to issue an APP to Florence Copper during July last year, which would be submitted to the Water Quality Appeals Board (WQAB) to make the final determination on the permit.

The town of Florence, legal representatives, Johnson Utilities and Pulte Home Corporation filed an amended notice of appeal with the WQAB to appeal the ADEQ’s issuing of the temporary APP to Florence Copper’s parent, Curis Resources.

In her recommendation, Judge Milhasky noted that Florence Copper’s proposed production test facility (PTF) would not have any impact on the drinking water wells in Florence, nor would it impact the wells owned and operated by Johnson Utilities located north-west of the project.

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Agnico has room to grow in Quebec (Northern Miner – October 1, 2014)

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

Agnico Eagle Mines (TSX: AEM; NYSE: AEM) has grown over the past two decades from a single asset producer to a mid-tier gold miner, with mines spread across Quebec, Nunavut, Finland and Mexico. But its four gold mines strung out along a 50 km stretch of the Trans-Canada Highway in Quebec’s Abitibi region remain the heart of the Agnico beast, and show significant upside.

The biggest shakeup for Agnico this year has been its joint acquisition with Yamana Gold (TSX: YRI; NYSE: AUY) of Osisko Mining and its Canadian Malartic gold mine in Malartic, halfway between Rouyn-Noranda and Val-d’Or. The deal gave Agnico 50% of the mine, which ranks as one of the largest gold mines in Canada, and produced 475,000 oz. gold and 422,000 oz. silver in 2013.

Canadian Malartic yielded 11,878 oz. gold attributable to Agnico in the first half of 2014 (representing only 15 days of ownership at the end of June), at a total cash cost of US$614 per oz.

A new reserve estimate was recently calculated, and the partners expect to update mine-optimization plans this month.

Speaking at the Denver Gold Forum in September, Agnico president and CEO Sean Boyd said the transition has “gone well,” and that the acquisition “gives us big reserves, big production and good net free cash flow in a part of the world we know really well.”

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The great Canadian LNG poker game – by Peter Tertzakian (Globe and Mail – October 1, 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.

“They’re just playing poker, right?” asked an investor friend of mine who knows how to make a dollar. “Guys like Petronas, Shell and Chevron have already put a bazillion or two on the table,” he said with his furrowed face. “Aren’t their investments to date far too large to just walk away from their British Columbian LNG projects?”

I paused before answering. Petronas had just publicly announced that they were unhappy with Canada. It was a tap of the Malaysian company’s closely held cards signalling they might be willing to pack up their B.C. drill bits and go home in the absence of better liquefied natural gas investing odds.

It’s easy to believe that Petronas’s verbal shots in the public arena were a poker-faced “take-it-or-leave-it” bluff to get better terms on the eve of the B.C. government’s anticipated LNG tax announcement. But Canadians with a stake in the multibillion-dollar LNG business – for example, investors, governments and suppliers – should be cautious about interpreting such statements as hollow bravado.

Deferring to the wisdom of country singer Kenny Rogers, I replied to my friend, “Surely you know the lyrics to The Gambler?”

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In risk-averse mining sector, innovation begins with taking the guesswork out of sorting rock – by Peter Koven (National Post – September 30, 2014)

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

The mining industry is not always synonymous with innovation. Extraction methods have been entrenched for decades, and many companies are happy to stick with the same mining and milling processes that are standard across the sector.

“There’s a monolithic barrier to anybody trying to do anything new, because everybody’s the same and everybody thinks the same,” says Andrew Bamber, chief executive of MineSense Technologies Ltd.

Mr. Bamber, 43, believes there is an untapped billion-dollar market for innovation and new technologies within the broader industry. With Vancouver-based MineSense’s latest invention, a unique ore-handling technology for optimizing metal recovery, Mr. Bambler hopes to help prove his case.

The technology has nothing to do with finding new mines. It is about identifying valuable ore in existing mines that he believes companies are foolishly throwing away. Conversely, it is about making sure companies do not waste time and money processing low-quality ore.

When mining firms design their mine plans, they spend hours poring over the drill holes on a property and carefully assigning value to blocks of material in the ground. Rock that gets assigned a high value goes to the mill for processing, and low-value material gets shipped to the waste pile.

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