Canadian Media Resource Articles – Page 617

Kinross slashes gold reserves by a massive 33% – by Peter Koven (National Post – February 12, 2014)

February 13, 2014

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

TORONTO – Kinross Gold Corp. has slashed its gold reserves by a staggering 33% as it focuses on mining high-grade ounces in a low-price environment.

The Toronto-based miner surprised investors on Wednesday by stating that its year-end reserves have dropped to 39.7 million ounces, down from 59.6 million at the end of 2012. It is a massive decline, particularly since Kinross used the same gold price in both years (US$1,200 an ounce) to calculate reserves.

Kinross said that part of the drop (6.7 million ounces) was due to the removal of its failed Fruta del Norte project in Ecuador, and part of it was simply depletion from mining. But the other key factor is its internal strategy.

The company wants to stick to mining high-margin ounces. As a result, it decided to calculate reserves using what it calls a “fully-loaded costing methodology” that factors in costs for sustaining capital, waste management and other work. The result is that millions of marginal ounces were dropped out of reserves.

The Keystone effect? Farmers blaming grain backlog on oil-by-rail surge – by Claudia Cattaneo (National Post – February 12, 2014)

February 13, 2014

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

Has the Keystone XL domino effect spread to Canadian farmers? Many are blaming a backlog in Western Canadian grain movements on the surge in oil transportation by rail, in turn the result of insufficient pipeline capacity, caused by environmental opposition to oil sands growth.

The situation is so serious Saskatchewan Premier Brad Wall appointed a delegation of provincial cabinet ministers Wednesday to meet with grain and rail companies and solve the “urgent matter.”

“This grain movement backlog is a very serious situation for the entire province and it is a high priority for our government,” Mr. Wall said in a statement. “The delays in moving grain have led to lower prices for our producers at the farm gate and are harming our reputation as a reliable supplier of agriculture products throughout the world. We want every possible avenue explored to ensure our producers have the ability to market and deliver their grain in a timely manner.”

He even suggested to reporters that the federal government slap fines on railway companies for poor performance, and that transportation of grain, which is seasonal, be made a priority over other commodities.

Copper thieves hit art and buildings in Toronto parks – by Rachel Mendleson (Toronto Star – February 13, 2014)

February 13, 2014

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.

Incidents at Christie Pits and Art Eggleton Park show the market for stolen copper and bronze remains hot. The half-dozen copper-clad landscape surfaces installed in the late ’90s in Art Eggleton Park were intended to recall Garrison Creek, a now-buried ravine that once flowed through the city.

But in recent months, the public art installation at Harbord and Montrose Sts., dubbed “Memory Banks,” has become a testament to another, somewhat baser, phenomenon: The still-hot market for stolen copper.

Ray Stukas, parks manager for Toronto and East York, said thieves made off with about 200 pounds of copper cladding, apparently ripped from the back of the planter-like installation, sometime late last year. “I suspect (it was) late at night,” Stukas said. “They probably put a pry-bar down through the top, and then they would just leverage it toward them.”

An epidemic that stretches well beyond the city limits, in recent years copper theft has become a big concern, thanks to historically high prices for the metal, currently pegged at about US$3.25 per pound.

COMMENT: The Conservatives’ boring budget – by Marilyn Scales (Canadian Mining Journal – February 12, 2014)

February 12, 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.

On Tuesday afternoon federal Finance Minister Jim Flaherty delivered the latest budget from the ruling Conservative party, a budget that has earned the sobriquet “boring”. There were no big new programs, no new tax relief measures for the young or middle class, nothing except the predictable rise in taxes for tobacco products.

If there was any good news in the budget, it is Flaherty’s promise to balance it and even generate a surplus in 2015.

So what’s in the budget for mining?

The Mining Association of Canada, Prospectors & Developers Association and the Association for Mineral Exploration British Columbia all congratulated the government for extending the mineral exploration tax credit. This credit helps raise money for exploration by giving individuals who invest in junior companies exploring in Canada a 15% tax credit on eligible expenditures. The credit has been extended to March 31, 2015. At a time when raising money for mineral exploration has become so difficult, a credit that rewards investors is particularly welcome.

HudBay Low Bid for Arizona Copper Invites Rival Offer: Real M&A – by Tara Lachapelle (Bloomberg News – February 11, 2014)

February 12, 2014

http://www.businessweek.com/

The prospect of mining copper in Arizona has traders lining up bets that Augusta Resource Corp. (AZC), the target of an unsolicited bid by HudBay Minerals Inc. (HBM), will win a higher offer.

Shares of Vancouver-based Augusta rose 15 percent above HudBay’s all-stock bid, which was valued yesterday at C$2.78 a share, or about C$440 million ($400 million) including net debt. The gap, one of the widest among pending North American deals in which traders expect bidding wars, indicates investors are anticipating a boost from HudBay or another suitor.

Augusta’s Arizona copper project is in the last stages of attaining necessary permits. Laurentian Bank of Canada said it’s large enough to attract other producers including OZ Minerals Ltd. (OZL) and Teck Resources Ltd. (TCK/B) and estimates the company’s value is at least C$3.89 a share based on similar deals. Freeport-McMoRan (FCX:US) Copper & Gold Inc., based in Arizona, is another possible suitor with the financial (FCX:US) strength to outbid HudBay, according to National Bank Financial.

“The market expects that this may be the initial offer and Augusta could negotiate better terms,” Shane Nagle, a Toronto-based analyst at National Bank, said in a phone interview. “It’s a high-quality asset. There is room certainly to sweeten the offer.”

Barrick Gold Production Seen Hitting Nine-Year Low – by Liezel Hill (Bloomberg News – February 11, 2014)

February 11, 2014

http://www.bloomberg.com/

Barrick Gold Corp. (ABX) is poised to cut output to a nine-year low, a sign the world’s largest gold miner is making headway on its plan to put profits before growth.

Barrick may produce 6.3 million ounces of gold this year, based on the average of four analysts’ estimates compiled by Bloomberg. That would be as much as 15 percent less than last year and the lowest since the company became the gold industry leader in 2006.

The Toronto-based miner, which is expected to issue 2014 forecasts when it reports fourth-quarter earnings Feb. 13, isn’t alone in its strategy. Gold producers have cut budgets, sold mines and curtailed operations after the metal plunged last year by the most in more than three decades.

“Barrick represents a turnaround situation,” Robert Gill, who helps manage C$3.3 billion ($3 billion) including Barrick shares at Lincluden Investment Management, said yesterday by phone. “It’s a different company now than what it was for much of its existence.”

The miner led an industrywide pursuit of expansion over the past decade as gold producers sought to capitalize on prices that rose for 12 straight years.

Quebec mining investment took deeper plunge than forecast last year – by Ross Marowits (Montreal Gazette – February 11, 2014)

February 11, 2014

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

THE CANADIAN PRESS – MONTREAL – Investments in Quebec’s mining sector plunged deeper than expected last year, declining nearly 37 per cent from a record year in 2012 and marking the first annual drop in a decade, Quebec’s statistics agency said Tuesday.

Preliminary numbers suggest investments in the sector fell to $3.25 billion from $5.13 billion a year earlier, due largely to lower gold prices and softer demand in China and emerging markets.

In October, the agency forecast a drop of at least 10 per cent in 2013 based on surveys of mining companies completed during the summer. However, Raymond Beullac, an official with the statistics institute says he had a “gut feeling” that the numbers were optimistic and warned of a possible decrease based on comments expressed by executives.

“Between last summer up until January the situation has greatly degraded and the numbers have come down so the companies who at that time expected to be spending more money exploration-wise in Quebec were not able to raise the capital to do the work,” he said in an interview.

Why the world’s biggest miners may get some more attention from investors (National Post/Reuters – January 11, 2014)

February 11, 2014

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

Aggressive cost cutting, volume growth and stable commodity prices will drive a rise in half-year profits for the world’s biggest miners, paving the way for healthy dividend hikes now and anticipated capital returns in 2015.

The latest round of results could tempt investors back into the sector, analysts say, after steering clear amid fears of cooling growth in China and a yet-to-occur slump in iron ore prices. Top miners BHP Billiton , Rio Tinto and Brazil’s Vale are expected to book solid growth in cash flows, having slammed the brakes on building new mines 18 months ago and embarked instead on massive cost cuts and debt repayments.

“Cash flows have been negative because they’ve been spending on projects and developments. You want to start to see a sign that that’s starting to reverse,” said Darko Kuzmanovic, a portfolio manager at Caledonia Investments in Sydney.

“Hopefully that’s the catalyst for people to be more comfortable with these names and start thinking about investing in them, because they don’t look particularly expensive.”

HudBay’s $428-million hostile bid for Augusta provides jolt to Canadian mining sector – by Peter Koven (National Post – February 11, 2014)

February 11, 2014

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

TORONTO – For the second time this year, a large hostile bid has breathed much-needed life into the Canadian mining sector.

HudBay Minerals Inc.’s $428-million offer for Augusta Resource Corp. has prompted strong speculation of a rival bid from analysts and investors. It has been months since the sector had a major takeover battle with multiple bidders, and the bid is seen as a potential catalyst for further M&A activity. “All of a sudden it lights a fire under everyone in this space,” said John Stephenson, senior vice-president at First Asset Investment Management.

The HudBay offer comes a few weeks after Goldcorp Inc. launched a $2.6-billion hostile bid for Osisko Mining Corp. The two moves have brought energy back into the mining space, which has suffered over the past 18 months because of lacklustre commodity prices, writedowns and investor disinterest.

Both the Augusta and Osisko bids reflect current realities in the sector: while they are priced well above the recent trading ranges of the stocks, they are worth fractions of what these companies traded at a few years ago.

If Barack Obama doesn’t approve the Keystone pipeline, another president will, says Stephen Harper – by Theophilos Argitis (National Post/Bloomberg News – February 11, 2014)

February 11, 2014

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

As far as Stephen Harper is concerned, history and economics carry far more weight in Canada-U.S. relations than whoever happens to occupy the White House at a given moment. That’s why Canada’s prime minister remains relatively unperturbed about the drawn-out Keystone XL pipeline review, maintaining its approval is “inevitable.”

In a wide-ranging interview on energy policy in his Ottawa office last month, Harper described how historical and economic forces and broad-based support for resource development determine whether projects like Keystone get built, rather than short-term political calculations. If Barack Obama doesn’t approve the pipeline, another president will.

“It is, in my judgment, a necessary and inevitable victory,” Harper said in a Jan. 16 interview as he awaited a State Department environmental assessment of the project. “I absolutely believe that. I can’t see how it will be otherwise.”

“It takes a lot of energy to repress and to block a decision that is clearly and overwhelmingly in the national interest of the country,” he said.

On Bay Street, a battered mining industry turns hostile – by Boyd Erman (Globe and Mail – February 11, 2014)

February 11, 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.

There was a time when nothing was better than getting a hostile bid for your mining company shares. This is not that time. Hostile acquisitions are creatures of the extremes of the mining cycle. There are now two big ones outstanding in Canada, and there are likely going to be more. And it’s not going to be very much fun to be the target.

In better times, getting put into play is like winning a lottery. The hostile acquirer invariably starts a bidding war that ends in a top-dollar sale. Exuberant chief executives decide they have to have something and can’t stop raising their offers. Shareholders of Alcan Inc., Inco and Falconbridge Ltd. probably still haven’t spent their winnings, years after the last round of such sales.

Most of the CEOs who overpaid for those companies ended up pulling the ripcord on their golden parachutes.Now, at the bottom of the cycle, hostile offers usually result from a disconnect about value. Mining shares have plunged, and target boards don’t want to think about selling at such low prices. Frustrated acquirers give up on negotiations and send their bid directly to shareholders.

Minister of the Attorney General applies to intervene in Cliffs’ RoF appeal – by Henry Lazenby (MiningWeekly.com – February 10, 2014)

February 11, 2014

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

TORONTO (miningweekly.com) – Ring of Fire- (RoF) focused chromite project developer KWG Resources on Monday reported that the Ontario Minister of the Attorney General would bring a motion in the Ontario Divisional Court for leave to intervene in diversified miner Cliffs Natural Resources’ appeal of the decision of the Ontario Mining and Lands Commissioner released last September.

Cliffs had last year become embroiled in a legal battle for access to mining claims held by KWG in the RoF, over which the only viable access route to the chromite deposits could be constructed.

While KWG proposed a rail route connecting at Exton to transport chromite to consumers, Cliffs proposes an all-weather road south towards Capreol, in the Sudbury area, where it had proposed to build a chromite beneficiation facility.

The battle over a much-sought after corridor played itself out last year in front of the Ontario Mining and Land Commissioner, which, in the end, denied Cliffs access to KWG Resources’ staked mining claims to construct its proposed road. Despite Cliffs appealing the decision, it had suspended operations in the area, citing, among other reasons, uncertainty about developing the necessary infrastructure to bring its project on line.

B.C. coal export plan faces resistance – by Brent Jang (Globe and Mail – February 10, 2014)

February 10, 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 — As Canada’s efforts to send oil abroad encounter thorny opposition, critics are increasingly targeting another resource export: Coal.

Plans to export thermal coal from the West Coast to Asia are being put under the microscope as North American miners jockey to ship abundant domestic supplies overseas.

Demand for thermal coal, a commodity used by power plants to generate electricity, has weakened in recent years in North America due to the boom in U.S. shale gas production. With many U.S. power plants switching to natural gas, a coal glut has forced miners to look to Asia for new markets.

Fraser Surrey Docks LP, a marine terminal located on the Fraser River in the Vancouver suburb of Surrey, wants to serve as a new staging ground for exports of thermal coal originating from Wyoming’s Powder River basin. Fraser Surrey Docks is owned by Macquarie Infrastructure Partners, an investment fund managed by Australia’s Macquarie Group.

Principle and pragmatism – by Matthew Pearson (Ottawa Citizen – February 9, 2014)

February 10, 2014

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

Premier Wynne has made First Nations a priority during her first year in power, but the true test of her words awaits

TORONTO — On the day Kathleen Wynne was sworn in as premier — a year ago Tuesday — she chose to add something a little different to the dry ceremonial program that had been used for the two dozen men who had come before her.

In addition to the presence of Ontario’s lieutenant-governor, a minister and the tones of O Canada, the premier-to-be requested that First Nations traditions be included in the ceremony. And so it was for the first time on the floor of the Queen’s Park legislature that seven aboriginal women drummed and sang an honour song in Ojibway.

While most of that day’s news reports focused on other firsts — namely, Wynne as the first female premier in Ontario and first openly gay premier in Canada — the inclusion of drummers was in fact more significant to some.

“It sent a signal that we were going to be important as part of her premiership,” said Sylvia Maracle, executive director of the Ontario Federation of Indian Friendship Centres.

Gold miners to slash reserves as price drop forces revision – by Rachelle Younglai (Globe and Mail – February 10, 2014)

February 10, 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.

After years of costly mistakes, the new chief executives of Barrick Gold Corp. and Kinross Gold Corp. have ushered in an era of austerity in the precious metal sector.

The results of their labour will be on display when Canadian mining companies report fourth-quarter earnings this week. Investors are already expecting gold producers to reduce their bullion reserves, write down more assets and record lower profits.

But the bad news may soon be ending with companies adjusting to the lower gold price. “The worst is over,” said John Ing, president of investment firm Maison Placements Canada Inc. in Toronto. That doesn’t mean the picture will be pretty this quarter.

Barrick CEO Jamie Sokalsky told investors that the company will use a $1,100 (U.S.) price to calculate its unmined gold. That is down sharply from the $1,500 price assumption used to calculate last year’s reserves.