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Canadian Media Resource Articles

Barrick Gold slashed chairman’s pay to US$9.5M last year after investor outrage – by John Shmuel (National Post – April 1, 2014)

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

TORONTO — Barrick Gold Corp. unveiled a new compensation package for executives Monday, a year after management faced heavy blowback for a generous signing bonus that made incoming chairman John Thornton one of the highest paid executives in Canada.

The world’s largest gold miner said it had scaled back Mr. Thornton’s pay for 2013 to US$9.5-million, compared with US$17-million the prior year. Mr. Thornton’s original pay package, which included a US$11.9-million signing bonus, caused a rare rejection last year by shareholders of the company’s executive compensation plan.

“We heard shareholders loud and clear,” said Brett Harvey, Barrick’s lead director, adding that he saw the new compensation model as one that others in the industry are “going to follow.”

The new “scorecard” system will see Barrick pay a large chunk of compensation in stock that executives will have to hold until they retire or leave the company. It will also base salary on a number of performance metrics, including delivering planned cash flow, achieving cost targets and meeting earnings expectations. As chairman, Mr. Thornton will not fall under the new scheme.

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Kinross announces lower capital costs for Tasiast in Mauritania – by Henry Lazenby (MiningWeekly.com – April 1, 2014)

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

TORONTO (miningweekly.com) – Canadian miner Kinross Gold on Monday announced the results of a feasibility study that examined the viability of significantly expanding output at its Tasiast mine, in Mauritania, saying that the expected capital cost would be less than what a prefeasibility study (PFS) estimated last year.

The TSX- and NYSE-listed miner said that the initial capital cost to expand the mine would be $1.6-billion, compared with its PFS estimate of $2.7-billion. A thorough review of project design, execution and scope produced about 230 cost-saving initiatives worth about $493-million.

Examples of the cost savings included pre-assembled plant modules, concrete precasting and greater reliance on in-house technical expertise for mine planning, engineering, geological modelling and overall project oversight.

The company also expected a decrease in Tasiast’s expected water demand owing to a planned reduction in dump-leach processing, more accurate mill modelling and greater-than-expected water availability from current sources, which had resulted in the company being able to defer the need to begin building a sea water pipeline from the coast to the mine until 2018.

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Nationalism takes centre stage in Indonesia’s election campaign – by Rieka Rahadiana (Reuters Canada – March 30, 2014)

http://ca.reuters.com/

JAKARTA (Reuters) – Dressed in the style of Indonesia’s first leader, even using replica 1950s microphones, presidential hopeful Prabowo Subianto roared to thousands of supporters at a recent rally in the capital: “Indonesia cannot be bought”.

It is a nationalistic tone that has been on the rise in campaigns by the major political parties ahead of elections to choose a parliament on April 9 and a new president on July 9.

The question of whether Indonesia is souring on the foreign money that helped bankroll much of its growth was thrust into the spotlight this year with a new law that aims to boost the country’s profits by banning the export of minerals unless they have been processed first.

That threatens the fortunes of some of Indonesia’s biggest investors, notably two major U.S. mining companies with large operations in the country – Freeport-McMoRan Copper & Gold and Newmont Mining Corp. To continue exporting, mining firms must now either pay 20-25 percent tax from this year, rising to up to 60 percent by the second half of 2016, or invest hundreds of millions of dollars on new smelters.

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Alphonse and Gaston meet the Ring of Fire – by (Troy Media – March 30, 2014)

http://www.troymedia.com/

Frank Dabbs is a veteran business and political journalist, author of three biographies and a contributor, researcher or editor of half a dozen books. Frank worked in print, radio and television in Alberta for 40 years. Since 2006, he has been a print and television freelancer in Ontario. 

None of the players involved in the development of Ontario’s economic salvation is willing to be the first to commit

ANNAN, ON, Mar 30, 2014/ Troy Media/ – Alphonse and Gaston were two newspaper cartoon characters created in the 1920s by Frederick Opper, and the “glacial” progress of Ontario’s Ring of Fire harks back to them.

Alphonse and Gaston were two waiters who never got anything done because they were too polite. “After you Alphonse,” Gaston said. “No, you first, my dear Gaston,” replied Alphonse.

It’s very reminiscent of what is happening with Ontario’s Ring of Fire, a massive planned chromite mining and smeltering development project in the mineral-rich James Bay Lowlands of Northern Ontario. No one seems willing to be the first to launch the $60 billion mineral discovery in the area.

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Mick Davis is cash heavy and hunting for mining deals – maybe in Canada – by Eric Reguly (Globe and Mail – March 31, 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 new company set up by Mick Davis and other former Xstrata executives, X2 Resources, has raised $2.5-billion (U.S.) in funds and is set to buy mining assets in the belief that the commodities cycle is set for a revival.

X2 announced Monday that it had secured the commitment from five investors, each of which have contributed $500-million. The same five have have agreed to contribute another $1.25-billion in conditional equity funding, raising the potential total to US$3.75-billion.

The identifies of only two of the five investors, Noble Group and TPG, have been disclosed. Noble Group, based in Hong Kong and listed on the Singapore exchange, is one of the world’s largest commodities trading and infrastructure companies. It competes with Switzerland’s Glencore, the new owner of Xstrata. Mr. Davis was CEO of Xstrata until early last year.

TPG is a private American investment firm, with more than $55-billion in assets under management in a broad range of businesses, from energy to biotechnology.

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Tunnel vision: Most Canadian CEOs believe the economy must diversify – by Richard Blackwell (Globe and Mail – March 31, 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.

Almost two-thirds of Canadian executives say the country is too dependent on resource industries and needs to become more diversified to inject better balance into the economy.

But the latest C-Suite Survey of business executives also shows a deep divide between those in the resource sector and those in other sectors, over the long-standing concentration of Canada’s economic might in mining, oil and gas, and other resources.

Sixty-two per cent of respondents said the downturn in commodities is a reminder that there is too much emphasis on extractive industries, and that there is a need for diversification. About 30 per cent said it makes sense to count on the country’s natural resources – and those executives think the sector will recover as the commodity cycle rebounds.

The results reflect very different views depending on which sector the executives work in. Almost 80 per cent of those in the service industry say Canada is too dependent on resources, while only 44 per cent of executives at the top of mining companies feel that way.

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Canada regulator seeks wiretap powers for insider-trading cases – by Cameron French (Reuters U.S. – March 27, 2014)

http://www.reuters.com/

(Reuters) – Canada’s largest capital markets regulator is pushing for an amendment to the country’s Criminal Code that would allow investigators to use wiretaps to investigate insider trading.

Such a step would give Canadian investigators a tool that their U.S. counterparts already have, and one that Ontario Securities Commission (OSC) Chairman Howard Wetston said on Thursday is needed to successfully prosecute a crime where proving intent is key.

The OSC is the largest and most influential of Canada’s provincial and territorial securities regulators, and has jurisdiction over the Toronto Stock Exchange. “In my opinion, we are missing a key tool that would assist in more effectively enforcing provisions against insider trading,” he said in a speech to a Toronto business audience.

“Wiretaps would allow us to obtain direct evidence of the intention – I underline intention – to engage in illegal insider trading and tipping,” he said. Tipping refers to the practice of passing along sensitive information that could then be used for trading.

The wiretapping would not be done by the regulator itself, but rather by provincial and federal police that work with regulators to investigate white collar crimes. Wetston said the OSC has been in early-stage talks with police about the issue.

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Barrick to revise executive compensation rules – by Rachelle Younglai (Globe and Mail – March 31, 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.

Barrick Gold Corp. will unveil pay packages for outgoing chairman Peter Munk and his successor John Thornton, as well as new executive compensation methods, after shareholder uproar over the incoming chair’s signing bonus.

Mr. Thornton’s $11.9-million (U.S.) bonus galvanized the traditionally passive Canadian pension funds to demand changes to how Barrick was governed, triggering the company to overhaul its board of directors late last year.

Barrick’s management proxy circular, to be filed on Monday, will present a new compensation scheme designed to align management’s pay even more closely with the miner’s performance. The company’s plan is expected to require executives to hold their shares until they leave the company.

That would be a departure from the previous arrangements, which allowed management to exercise their stock options at certain dates. “This is coming after they paid Thornton his big bonus. In some respects it’s like shutting the barn door after the horses have left,” said Robert Gill, vice-president and portfolio manager at Lincluden Investment Management, which holds $3.3-billion in assets including Barrick.

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China’s steel meltdown will ripple around the world – by Carl Mortished (Globe and Mail – March 27, 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.

LONDON — There’s too much mining, and too much iron ore. Overproduction will take the price of steel’s raw material down by almost a third over the next few years, says Australia’s official forecaster. A supply glut could be just part of the problem, because a swathe of Chinese steel makers are burdened with too much debt – and Beijing is not keen on bailouts.

Australia’s iron triumvirate – Rio Tinto Group, BHP Billiton Ltd. and Fortescue Metals Group Ltd. – are ramping up production, and chasing market share at the expense of prices. The frenzied digging means that the country’s exports of ore are expected to rise by almost a fifth to 680 million tonnes this year.

Australia’s Bureau of Resource and Energy Economics is predicting that by 2019, the iron ore price will fall from last year’s average of $126 (U.S.) per tonne to $87.

The price has already declined by a fifth since the beginning of this year, moving close to $100 per tonne, amid concerns that China’s export engine is slowing.

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Stornoway stocks rise on confirming ‘advanced’ financing discussions – by Henry Lazenby (MiningWeekly.com – March 27, 2014)

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

TORONTO (miningweekly.com) – The proponent of Quebec’s only diamond mine, Stornoway Diamond Corp, has conceded that it was in advanced negotiations with a number of parties regarding a comprehensive financing plan for its Renard diamond project, located in north-central Quebec, sending its shares up by as much as C$0.16 apiece on Thursday.

Despite the company affirming that it did not generally respond to rumours or media speculation, Stornoway said that management was encouraged with progress made in discussions to date.

It did, however, note that the outcome of such discussions was uncertain and subject to further negotiation and executing binding term sheets and definitive agreements, and receiving all applicable regulatory, shareholder and other approvals.

“There is no assurance that any transaction will result from these discussions, or as to the timing, structure or terms of any transaction (which may include any combination of debt, equity, forward sale of diamonds and other forms of financing) and no further comment will be forthcoming unless the situation so warrants,” Stornoway said in a statement.

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Constitution puts aboriginal front and centre on resource projects – by Mary Teresa Bitti (National Post – March 28, 2014)

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

Pick any province across Canada and you’ll find there are outstanding land claims for Aboriginal title. Even in the provinces that have treaties — which account for more than 30% the land mass that makes up Canada — Aboriginal title claims are being advanced. That means a large part of the country is subject to significant Aboriginal influence or control. Aboriginal and treaty rights are especially important because they are the only property rights in Canada protected by the Constitution.

“Generally, Aboriginal law has an impact on resource and land development but that is not just in rural Canada. Some aspect of Aboriginal interests or claims touch each of the major cities across the country,” says Charles Willms, a Band 1 ranked practitioner for aboriginal law and chair of Fasken Martineau DuMoulin LLP’s aboriginal law practice.

“There are claims for Aboriginal title in and around the city of Toronto, the Ottawa Valley, Montreal, throughout the St. Lawrence Valley and into the Maritimes, for example. Aboriginal law affects all Canadians — that’s why it’s so important.”

While the first Aboriginal law case in the books was a family law case that dates back to 1813, the legal fight over land soon followed. It wasn’t until 1968, however, with the transformative Calder case that the courts recognized Aboriginal people had more rights than previously acknowledged.

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Raw oil exports offer big bang-for-the-buck for Canada’s economy, report says – by Yadullah Hussain (National Post – March 28, 2014)

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

Canada’s raw oil exports are no hindrance to “high-paying, value-added jobs,” according to a new report. In fact, labour compensation in oil and gas extraction is the highest in the country, at more than three times the average hourly earnings in the Canadian economy generally, and nearly 50% higher than manufacturing.

Adding value to natural resources — from lumber to crude oil — is often seen as critical to creating high-end jobs in some quarters and some groups often view exports of ‘raw’ materials as a job-killer that robs the economy of taxes and revenues.

“It is completely false… to claim raw energy exports do not represent ‘high-paying, value-added jobs’,” Trevor Tombe, an assistant professor of economics at the University of Calgary and author of the report published last week by the School of Public Policy. “The opposite is true.”

Labour productivity in mining and oil and gas averages more than $200 per hour compared to about $160 per hour for utilities, the second-largest contributor. Manufacturing, often touted as a “value-added” industry, generates about $50 per hour, Statistics Canada data shows.

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Clark’s mining push meets resistance – by Mark Hume (Globe and Mail – March 27, 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 — Premier Christy Clark’s push for new mines in British Columbia is becoming mired in growing controversy.

On Wednesday, a delegation from Alaska was in Washington, D.C., to lobby the U.S. government concerning five proposed mines in northwest B.C. that are on watersheds draining into southeast Alaska. The delegation, representing 40 businesses, tribes, commercial fishing groups and environmentalists, claims the mines pose unacceptable risks to Alaska’s salmon fishery.

“We’re really worried about where this is going to go,” Brian Lynch, executive director of the Petersburg Vessel Owners Association said about the proposed development of the mines near the Alaska border.

Mr. Lynch said he’s worried because the B.C. government seems to be simultaneously fast-tracking several mines without providing adequate resources for environmental reviews. “I doubt any agency could handle that work load,” he said. “The money is just not there to do that kind of work – and that scares us.”

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Gold bugs invade Northern Ontario – by Marilyn Scales (Canadian Mining Journal – March 26, 2014)

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

It’s already bug season in Northern Ontario – gold bug season that is. The numbers of junior exploration companies eager to drill the region are almost as many as there will be blackflies when the weather warms up. Well … maybe not quite as many, but the winter drilling programs are promising for some.

Toronto’s Harte Gold Corp. is examining its Hemlo style Sugar zone property, located 60 km east of the Hemlo camp, between White River and Hornepayne. Having discovered what it calls the “Peacock Boulder” with gold values up to 87 g/t, Harte has mounted surface and airborne surveys. The next step is to conduct an induced polarization and magnetic survey to targets for additional drilling. The Sugar zone gas a 43-101 compliant indicated resource of 1.12 tonnes grading 8.41 g/t and an inferred resource of 417,000 tonnes grading 7.13 g/t. (HarteGold.com)

Lake Shore Gold has identified new, high grade structures near the current mining at the Bell Creek Labine deposit in the Timmins area. The previously untested gap in the North A zone and two hanging wall structures returned 14.12 g/t over 10.2 metres, 8.41 g/t over 12.0 metres, and 7.01 g/t over 10.7 metres. Near the active 685 level mine workings, core assayed 11.42 g/t over 3.6 metres, 8.47 g/t over 4.6 metres, 7.76 g/t over 8.7 metres, 5.96 g/t over 6.5 metres, and 6.38 g/t over 6.0 metres.

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Mining, fertilizer and chemical groups present myths about the rail industry – by Michael Bourque (National Post – March 27, 2014)

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

Michael Bourque is President of the Railway Association of Canada.

Additional intervention to a sector that is already heavily regulated has the potential to undermine good business practices and successful economic outcomes.

It’s not every day that a group of customers co-author an article in which they claim that their service providers “deliberately” provide poor service. That’s exactly what the heads of three major industry associations–mining, fertilizer and chemical interests–did this week in a commentary on this page. “Railways should serve all customers,” said the headline.

Another modest statement in the commentary was hard to argue with. “Simply, a railway should meet the customer’s needs.” Sure, the customer comes first; the customer is always right and we exist to serve our customers. But let’s unpack what is behind this statement, which has a lot of history in the long historical debate between commercialization and regulation of railways in Canada.

Canada’s railways operate with a view to serving all customer needs. One analogy is that we operate a bus route, where each customer’s needs are met by operating efficiently and in a predictable fashion.

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