Canadian Media Resource Articles – Page 609

Energy Fuels strikes $179M deal to buy Uranerz amid rough uranium market – by Peter Koven (National Post – January 6, 2015)

January 6, 2015

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

TORONTO – Two Toronto-listed uranium miners are merging as they try to build a stronger company that can thrive amid low uranium prices.

Energy Fuels Inc. announced Monday that it is buying Uranerz Energy Corp. for roughly $179-million in stock. The move brings together two U.S.-focused companies that are struggling to make money and attract investor interest in the stagnant uranium market.

The offer is a 37% premium to Uranerz’s closing price last Friday, and some investors thought that was too rich. Energy Fuels shares plunged almost 15% on Monday after the deal was announced.

“The premium didn’t make a lot of sense to us,” said Aaron Salz, a research associate at Dundee Capital Markets. Dundee concluded that the deal is dilutive to Energy Fuels’ net asset value by 35%, and thinks a competing bid is unlikely.

But from a strategic standpoint, experts said the deal is logical. It gives Energy Fuels more scale, lower operating costs and a uranium mine in Wyoming called Nichols Ranch where production can be expanded.

The coming showdown between Canadian and Saudi oil producers on the U.S. Gulf Coast – by Geoffrey Morgan (National Post – January 6, 2015)

January 6, 2015

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

CALGARY – A fight between Canadian and Saudi Arabian oil producers is expected to play out on the U.S. Gulf Coast during the course of this year, as the two countries battle for market share in the world’s largest refining district. The fight could help keep oil prices depressed for another six months.

Citigroup analyst Edward Morse released a report Monday that points to an oversupply of oil on the Gulf Coast thanks in part to an influx of heavy crude from Canada, even without TransCanada Corp.’s long-delayed Keystone XL pipeline. At the same time, the report says Saudi Arabia is attempting to regain its market share in the area.

The 2014 showdown between light oil producers — U.S. shale oil companies and OPEC members such as Saudi Arabia — for share of the North American refining market will change, according to Citigroup. “Now the confrontation should shift to sourer and heavier crudes,” the report said.

Oilsands crude is considered heavy, because it has the consistency of molasses, and sour, because of its sulphur content.

Scotiabank vice-president and commodity market specialist Patricia Mohr agreed there is potential for Canadian oilsands shipments to push Saudi Arabian and North African oil out of refineries on the Texas and Louisiana coastline.

Fool’s Gold: The limits of tying aid to mining companies – by Marco Chown Oved (Toronto Star – December 15, 2014)

January 6, 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.

Barrick Gold’s massive mine in Peru has sped up community development, including schools and a hospital. So why are so many locals still jobless and poor?

QUIRUVILCA, PERU—Towering atop a pedestal in the main square, a golden statue of a miner with his headlamp and jackhammer gleams in the morning sun, a monument to the mineral wealth on which this town was built.

The Quiruvilca mine opened almost 100 years ago, and its blackened wooden structures still loom on the mountainside above the rooftops. But a century of mining copper, silver, zinc and gold brought little development to this remote settlement, nestled in a steep valley more than 4,000 metres up in the Peruvian Andes. The roads weren’t paved; many people didn’t have electricity.

Nine years ago, another mine opened, operated by Toronto-based Barrick Gold, the world’s biggest gold mining company. It has paid hundreds of millions of dollars in taxes and royalties and the new-found wealth is visible everywhere. The local government has brought power to virtually everyone in town and is now hooking up remote villages. Through an infrastructure-for-taxes program, Barrick has constructed roads, a police college, a hospital and a school. A new highway has cut travel time to the coast from eight hours to 3.5.

Cliffs’ Bloom Lake mine hit with record $7.5-million environmental fine – by Bertrand Marotte (Globe and Mail – December 26, 2014)

January 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.

Cliffs Natural Resources Inc. is feeling more pain from its foray into Canada.

As the Cleveland-based company pulls up stakes at its money-losing Bloom Lake iron ore mine in northeastern Quebec after investing billions in what its chief executive dubbed a “disaster,” the company’s subsidiary has been hit with a record $7.5-million fine for environmental infractions at the site.

Bloom Lake General Partner Ltd. – in which Cliffs has a controlling stake – pleaded guilty on Dec. 18 to 45 offences under the federal Fisheries Act and the Metal Mining Effluent Regulations in the Criminal and Penal Division of the Court of Quebec, according to Environment Canada.

The fine is the largest penalty for environmental infractions in the country’s history, Environment Canada said. Of the $7.5-million, $6.83-million will go to a federal fund that aims to direct money to environmental projects in the location where the incident took place.

Environment Canada said its investigation lasted more than three years. One major infraction involved the breach of a tailings pond dam that allowed more than 200,000 cubic meters of mine tailings and water to be released into fish-bearing waters.

2014 in review: Decline and fall in the mining industry – by Rachelle Younglai (Globe and Mail – January 1, 2015)

January 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.

The mining industry hasn’t had much good news in recent years, so further signs of an economic slowdown in China rattled already-skittish producers. With financial-sector reform choking off growth in China’s property sector, which uses vast amounts of raw material, a bloodbath for metal and mineral prices ensued. Companies’ stocks sank to decade lows, and cost cutting became the critical part of every miner’s strategy. Here are 2014’s pivotal moments.

Iron ore glut

Iron ore lost 50 per cent of its value in 2014, falling below $67 (U.S.) a tonne because of weak demand from China and a glut of supply. The world’s biggest producers – Rio Tinto Group, BHP Billiton Ltd., Vale SA and Fortescue Metals Group – responded not by cutting production, but by continuing to increase it, despite the low prices for the steel-making ingredient.

Their strategy has taken a toll on smaller, higher cost producers, such as Cliffs Natural Resources Inc. and Labrador Iron Mines Holdings Ltd. Both have suspended operations at iron ore mines in the Labrador Trough, a 1,600-kilometre-long area that straddles Labrador and Quebec. Two iron ore mines there, Bloom Lake and Wabush, have been shuttered, putting hundreds out of work.

Canadian prosperity requires a strong resource industry – by Gwyn Morgan (Globe and Mail – January 5, 2015)

January 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.

“One of the key messages in Mr. Olson’s Rise and Decline of Nations is that
societies who don’t understand how their wealth is generated are destined
to lose it.” (Gwyn Morgan – January 5, 2015)

It’s been thirty years since Mancur Olson, the late American Economist, wrote The Rise and Decline of Nations. The premise of his widely acclaimed book is the longer a society enjoys political stability, the more likely it is to develop powerful special interest groups that erode economic prosperity. His words have proven prescient as we witness Europe’s debt-burdened stagnation and degeneration of the U.S. Congress into fractious ideological gridlock.

Canada weathered the 2008 economic crisis better than other countries, emerging as one of the world’s most financially sound and prosperous countries. The cornerstone that distinguishes Canada’s prosperity is our rich resource endowment, which generates some two million jobs, more than half of all merchandise exports and one-third of all capital investment.

Resource companies are planning capital investment of more than $600-billion over the next decade, creating hundreds of thousands more new jobs each year. But a new dynamic has emerged that threatens to stymie these investments.

How $40 oil would impact Canada’s provinces – by Jeff Rubin (Globe and Mail – January 5, 2015)

January 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.

What does Canada’s economy look like with oil prices at $40 a barrel? Certainly it won’t be the energy superpower envisioned by Prime Minister Stephen Harper.

If $40 a barrel still seems a ways off, consider that the benchmark price for oil sands crude is already trading in that price range. What’s more, if production from high-cost sources isn’t withdrawn from an oversupplied market, oil prices may soon be trading even lower.

The first thing Canadians should recognize about the new world order for oil prices is that – contrary to what we’re being told by our federal government – the economy is no longer in dire need of any new pipelines. For that matter, it can live without the new rail terminals being built to move oil as well. Yesterday’s transportation bottlenecks aren’t relevant in today’s marketplace.

At current prices there won’t be any massive expansion of oil sands production because those projects, which would produce some of the world’s most expensive crude, no longer make economic sense.

The recent spate of project cancellations by global oil giants – Total’s Joslyn mine, Shell’s at Pierre River, and Statoil’s Corner oil sands venture – is only the beginning. As oil prices grind lower, we can expect to hear about tens of billions of dollars of proposed spending that will be cancelled or indefinitely postponed.

2014 a gruelling year for B.C. miners – by James Kwantes (Victoria Times Colonist – January 1, 2015)

January 5, 2015

http://www.timescolonist.com/

How bad was 2014 for Vancouver-based mining companies? With coal prices stumbling along at 52-week lows, even the lumps in the stocking were a stinking money-loser.

Take mining heavyweight Teck Resources, which is better-positioned than most coal producers to weather low prices. While its six coal mines were profitable for the three months ended Sept. 30, third-quarter profit dropped largely due to lower metallurgical coal prices. The stock has slumped more than 40 per cent this year to $16 on the Toronto Stock Exchange, pushing its dividend yield up to nearly six per cent.

Gold looked to break even at about $1,200 US an ounce after hitting highs of $1,385 during 2014. As for the prices of other resources produced in B.C. — copper, molybdenum, natural gas — each finished the year lower as economic growth in China continued to slow.

However, it was Vancouver’s mineral exploration companies — which rely on fresh capital infusions to continue their quest for buried treasure — that felt the most pain.

The S&P/TSX Venture Composite index — a bellwether of sorts for the junior exploration sector — finished the year at 690, comparable to levels at the height of the 2008 financial crisis. Several junior mining companies even gave up on mineral exploration and switched over to the burgeoning medical marijuana industry, while others closed their doors or hunkered down in cash-conservation mode.

Canada’s mining sector braces for another challenging year – by Ross Marowits (CBC News/Canadian Press – December 28, 2014)

January 5, 2015

http://www.cbc.ca/news/business

Industry will benefit from weakened Canadian dollar

Canada’s mining sector is bracing for another challenging year in 2015 as slower growth in China is expected to continue to dampen selling prices for many metals.

Iron ore suffered the biggest drop in the past year, losing nearly half its value to reach the lowest price in more than five years. Some expect the price could fall further — perhaps to US$60 per tonne — on increased supply from Australia and Brazil by giants like Rio Tinto and BHP Billiton, outpaces demand.

Coal, silver, potash, copper and lead prices also weakened in the past year. Not all metals and minerals suffered. Nickel was the big winner, with prices rising 17 per cent following Indonesia’s ban on exports. Other gainers were uranium, aluminum, zinc and diamonds.

Although mining is in a multi-year global slump, prices are significantly higher than they were a decade ago, said Pierre Gratton, president of the Mining Association of Canada.

“It’s a cyclical industry and we have to weather this,” he said in an interview. Gratton said mining companies are very focused on reducing costs and will benefit from both the weakened Canadian dollar and dramatically lower energy prices.

Roger Warren, Giant Mine Bomber, Has Day Parole Extended (Canadian Press/Huffington Post – December 24, 2014)

January 5, 2015

http://www.huffingtonpost.ca/

A man who murdered nine people by bombing a Yellowknife mine 22 years ago continues to make “positive contributions to society” since being released from prison, a federal parole board has ruled in extending Roger Warren’s day parole.

The Parole Board of Canada granted the 71-year-old an additional six months parole on Nov. 21, stating board members found that by all accounts he is doing well and respecting conditions the board imposed.

“While mindful that the victims of your crime remain deeply affected by your actions,” reads recently obtained documents, “with no evidence that your risk is increasing and given the positive work you have done throughout your incarceration and community supervision, the Board finds that your risk to reoffend is not undue…”

Warren was sentenced to life in prison for second degree murder in January 1995 in the killing of nine replacement workers during an acrimonious strike at the Giant Mine.

He was found guilty of rigging a trip wire that detonated a massive dynamite explosion deep underground when it was snagged by a passing ore car holding the victims.

Canadian miners brace for ‘knife fight’ after year of dumping assets at fire-sale prices – by Peter Koven (National Post – December 30, 2014)

January 5, 2015

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

The mining business has a long history of companies grossly overpaying for assets. But no one will accuse George Dethlefsen of that crime.

Mr. Dethlefsen’s firm, Corsa Coal Corp., was approached this year about buying coal assets in Pennsylvania from Russian steel giant OAO Severstal, which was bailing out of the United States.

Severstal had bought these operations for $900 million in 2008, when steelmaking coal prices were hitting all-time highs. Mr. Dethlefsen would not pay anything close to that in today’s awful coal market, but he didn’t have to. Corsa bought the operations for a grand total of US$60 million, or less than 8% of what Severstal paid.

“It’s a tough market. We have our work cut out for us with this business and it’s not going to be easy,” said Mr. Dethlefsen, Corsa’s chief executive. “But we’d rather start by paying US$60 million than US$500 million.”

Indeed. It used to be that when mining companies put assets up for auction, they wouldn’t actually sell them unless they got a very full price. That could be because their commodity price assumptions were too optimistic, or they were just too attached to them and convinced they could extract more value. Dozens of interesting projects were put up for auction in recent years and never changed hands because sellers demanded too much money.

What Really Needs to Happen to Make the Ring of Fire a Reality – by Chief Cornelius Wabasse (Huffington Post – December 24, 2014)

January 5, 2015

http://www.huffingtonpost.ca/politics/

Cornelius Wabasse is the Chief of Webequie First Nation.

We have heard a lot in the news recently about whether resource development in the Ring of Fire in Ontario will ever become a reality. Newspapers are filled with discussion about why progress has not been faster, of companies abandoning development projects, and of concerns that Ring of Fire development may never be achieved.

These discussions focus on the wrong questions.

If Ring of Fire development is to be successful, the question should not be whether the development is happening fast enough. It should be whether the process is taking place based on a foundation of recognition and respect for Webequie First Nation and the other Indigenous nations who call this land home.

Despite all the words written and spoken about the Ring of Fire, Webequie and our Indigenous neighbours remain invisible to most of the boosters, pundits and speculators. We are the unnamed “First Nations” or “Aboriginal people.” It is time people learned more about who we are and our vision for our lands and future.

We have always lived here. We are not going anywhere. We have our own laws separate from Canadian laws.

Editorial: Top stories of 2014 – by John Cumming (Northern Miner – December 22, 2014)

December 22, 2014

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists. jcumming@northernminer.com

Mining and mineral exploration are by nature businesses for optimists, but looking back over 2014, it’s hard not to conclude that difficulties and disasters tended to outweigh the brighter spots of achievement and growth. Here is our choice of the top stories of 2014:

10. Peter Munk’s exit — One of the giants of Canadian mining took his final bow in the mining world in April 2014, as Barrick Gold founder and chairman Peter Munk delivered his last address to shareholders at the company’s annual meeting. Having played a pivotal role in growing Barrick from modest beginnings to the world’s No. 1 gold producer, Munk’s reputation as a company builder is secured. As the year progressed, Barrick saw a major turnover in top management.

9. Rise of the house of Lundin — While other miners focused on cutbacks, the Lundin Group of Companies was a mine developer and bargain hunter. On top of financing numerous struggling juniors, the Lundin group piled up successes such as Lundin Mining’s start-up of its Eagle mine in Michigan and purchase of the Candelaria mine from Freeport-McMoRan; Fortress Minerals’ purchase of Kinross Gold’s Fruta del Norte project; and Lucara’s continued success in diamonds.

8. Crises in West Africa — A favourite destination for junior gold miners had a deadly year marked by an outbreak of Ebola that killed 7,300 people in Sierra Leone, Liberia and Guinea.

OBITUARY: Entrepreneur Terry Howes made a fortune through once-dormant mining stocks – by Tom Hawthorn (Globe and Mail – December 22, 2014)

December 22, 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.

Terry Howes was a prospector who made a fortune from mining, though he never stuck an axe in the ground, or swished a pan of gravel in a Klondike river. Instead, he surveyed dusty documents in archives, seeking nuggets of information in which could be found unclaimed treasure.

Mr. Howes had several eureka moments by locating shareholders of once-dormant mining stock that had become valuable. Mr. Howes took a percentage of his findings as a reward.

“I don’t know of anyone else who does what I do,” he told the Toronto Star in 1989. “I got the idea when the price of gold went up eight or nine years ago. I was aware there were a good many gold-mining companies that had lost all their value. … Now suddenly they were valuable again. I thought it might be a good idea to track down shareholders and tell them what they had.”

The laborious and painstaking search along a paper trail might be described as a get-rich-slow scheme. Mr. Howes, who has died at 85, also operated a company called Locator of Missing Heirs Inc. As the name promised, he tracked down those owed money from an estate, negotiating a fee with the heirs for the service.