Canadian Media Resource Articles – Page 621

Mining deals a positive sign, but bankers and lawyers still skeptical – by Peter Koven (National Post – October 15, 2014)

October 15, 2014

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

TORONTO – The past couple of weeks provided a jolt that the Canadian mining industry’s bankers and lawyers have awaited for a long time.

But is it sustainable? Insiders are far from convinced. Since the start of October, there have been two sizeable private equity mining deals announced, plus a US$1.8-billion asset sale and related financing that got a better reception from the market than almost anyone imagined.

While mining M&A has moved along at a decent pace this year, these transactions stood out from the pack. Private equity, for one, has been the talk of the mining business for months. There have been predictions that a wave of private equity investment is set to pour into the cash-needy sector and give it a lift, but those deals simply have not materialized the way the industry expected.

Two transactions this month gave Canadian miners some renewed hope: Magris Resources Inc.’s private equity-backed $500-million acquisition of the Niobec mine in Quebec, and a $73-million takeover of Chaparral Gold Corp. involving private equity firm Waterton Global Resource Management LP.

Outside of private equity, the big announcement was Lundin Mining Corp.’s US$1.8-billion purchase of Freeport-Mcmoran Inc’s 80% stake in the Candelaria mining complex in Chile. To get the deal done, Lundin arranged a complex US$2.2-billion financing package.

A market fall – and Canada’s suddenly vulnerable energy sector – by David Berman and Brian Milner (Globe and Mail – October 15, 2014)

October 15, 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.

Canadian stocks hit a record high six weeks ago, but have been on a downhill run ever since as nervous investors act on growing worries about deteriorating global conditions and their debilitating effect on demand for Canada’s energy and other resources.

When they returned on Tuesday from the Thanksgiving holiday, traders drove down the benchmark Canadian index 190.7 points, or 1.3 per cent, to 14,036.68. The losses mean the Toronto stock market has now fallen 10.4 per cent since the start of September. Crossing the 10-per-cent threshold signals a market correction and puts the TSX halfway down the path to a full-fledged bear market. This is a troubling milestone, because if stocks continue their slide, it will put a severe dent in the value of individual investments as well as the mutual and pension funds that Canadians count on for retirement.

The list of global stresses is long, including a slowdown in China, a dramatic weakening of the once strong German economy, deepening woes elsewhere in Europe, increased strife in the Middle East, and the spreading Ebola scare. And they do not bode well for Canada, because they would force it to become more reliant on the United States, the one major economy still expanding.

If world energy prices keep dropping from weaker demand and a global glut caused partly by a surge in U.S. production that has sharply reduced imports to the United States, the effects will be felt not only in Alberta but across the Canadian economy.

Three big ‘whoppers’ told about the Ring of Fire – by Jody Porter (CBC News Thunder Bay – October 15, 2014)

October 15, 2014

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

‘Ridiculous’ to compare northern Ontario mineral find to the Alberta oil sands, expert says

Once called Canada’s ‘next oil sands’, the Ring of Fire mining development area in northern Ontario has yet to live up to its promise.

Federal Treasury Board Chair Tony Clement called the Ring of Fire “a game-changer for Canada” with “potential impact…akin to what the oil sands did for Alberta and Canada” just last year.

But that was before Cliffs Natural Resources halted its plans for a chromite mine in November 2013. Now the future of the Ring of Fire is far less certain, and even less likely to live up to what some say were always overinflated claims of its potential.

Here are three big ‘whoppers’ told about the Ring of Fire.

1. Chromium is a rare and valuable mineral.

From the Ontario Chamber of Commerce 2014 report ‘Uncovering the economic potenital of Ontario’s Ring of Fire : “The most promising discovery [in the Ring of Fire] is the first commercial quantities of chromite in North America. Based on current projections, the deposit is significant enough to sustain activity for a century.”

Nursing juniors Australians beat Canadians – by Kip Keen (Mineweb.com – October 13, 2014)

October 14, 2014

http://www.mineweb.com/

Is it timing, spending or just having guts?

HALIFAX, NS (MINEWEB) – Maybe it’s an Australian knack for stomaching awful things. Vegemite. Bloodied juniors.

Richard Schodde, Managing Director of MinEx, a small but powerful mining research firm out of Australia, always has some interesting slides in his presentations. In one of his latest he drew a picture of the diverging fate of two patients: ASX and TSX/TSXV exploration juniors.

Australia and Canada have long dominated global exploration (though China is rising.) But the Australians – nursing deep wounds to be sure – are still faring much better than Canadians.

The comparison drew Schodde, on the road in New York, into a 30-minute talk on Friday morning before his hotel’s house-keeping kicked him out of his room.

The basics

Proportionally-speaking, Australian exploration juniors have healthier (albeit still very stressed) cash reserves than Canadians.

That the juniors are in an abysmal state, cash-wise, will come as no surprise to anyone following the sector. But the yawning gap between ASX and TSX/TSXV juniors may.

Uncertainty clouds the investment outlook of Quebec’s mining industry – by Bertrand Marotte (Globe and Mail – October 14, 2014)

October 14, 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.

MONTREAL — Quebec’s attempts to put an end to years of image-corroding uncertainty and lack of clarity for the mining industry are getting mixed reviews.

The Liberal government of Premier Philippe Couillard has revived plans to accelerate natural resource extraction in the vast northern reaches of the province. And the new Mining Act has helped bring greater predictability and transparency to a political environment many critics said was damaging Quebec’s reputation as an attractive jurisdiction for mining investment.

But problems and unresolved issues remain, even factoring in the current global commodities downturn, say some industry players and observers.

Take the case of Strateco Resources Inc., which recently shut down its uranium mining project in the Otish Mountains of northern Quebec after years of what its chief executive says have been frustrating dealings with provincial authorities. “This has been extremely difficult,” Strateco president and chief executive officer Guy Hébert said.

For years, the government declined to grant Strateco the right to start underground exploration at the site, known as Matoush, despite the company jumping through hoops to get 22 permits from Quebec at different phases of the project, he said.

Bees help restore Sudbury mining site – by Lisa Wright (Toronto Star – October 14, 2014)

October 14, 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.

“Unsightly” mess left behind by a century of mining.

Retired foreman Wayne Tonelli worked in Sudbury’s nickel mines since he was a teenager, but his new gig is pretty sweet.
That’s because his old boss Vale (formerly Inco) is mining for more than metals these days. The company is in the ‘liquid gold’ business, enlisting thousands of honey bees to help restore a Sudbury landscape blighted by more than a century of nickel and copper mining and smelting.

“I like being outside after 40 years underground,” says Tonelli, now a bee-keeper for the international resources giant as part of a company program to re-green the area that decades back looked like a moonscape.

He carefully tends to seven hives containing 350,000 bees that are used to pollinate the blooming wildflowers the company has planted across 120 acres of unsightly black slag piles formed by waste from the Copper Cliff smelter complex, upon which the massive Superstack chimney sits.

“Bio-diversity is the buzz word in the resource industry these days,” explains Glen Watson, superintendent, reclamation and decommissioning for Vale’s Ontario operations.

Why are iron ore prices falling so quickly? – by Eric Reguly (Globe and Mail – October 14, 2014)

October 14, 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- Iron ore mines are to Australia what the oil sands are to Canada. The Aussie iron ore business is enormous, capital intensive, profitable and has an insatiable customer – China – just as the oil sands can depend on the United States to consume almost all of its output. The Aussie and Canadian industries share another trait: falling prices.

The value of both iron ore and oil is plummeting. But the similarities end there. Oil is falling because of excess supply and waning demand in the Western world, in good part because zombie Europe is on the verge of a new recession. But global demand for iron ore is still climbing, if at a somewhat slower pace than last year. So why are iron ore prices falling, and why are they falling so much faster than oil?

The price for iron ore in China, the world’s biggest consumer of the material used to make steel for everything from office towers to dishwashers, is down about 30 per cent this year (compared to a 20-per-cent drop for oil). The spot price for iron is off about 40 per cent, though it bounced back a few bucks this week to reach $83 (U.S.) a tonne.

Iron ore is falling even though Chinese demand for steel is up about 5 per cent year on year, while demand for imported iron ore is up 15 per cent or so, outpacing import demand in 2013.

Opposition builds to Energy East pipeline plan – by Shawn McCarthy (Globe and Mail – October 14, 2014)

October 14, 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.

OTTAWA — TransCanada Corp. faces a rough ride in Central Canada over its proposed $11-billion Energy East pipeline as industrial users and natural-gas distribution companies warn they’ll be short-changed by the company’s plan to switch the pipeline to gas from oil.

Both Quebec and Ontario governments plan to intervene in the National Energy Board review, which will kick off when TransCanada files for regulatory approval later this month. Both provincial governments are being urged to defend their natural gas customers who say their interests are being sacrificed to western oil producers.

Quebec’s regulatory body, Régie de l’énergie, held hearings last week on the Energy East plan, and will provide advice to the Liberal government on whether the project benefits the province.

In the hearing, India-based IFFCO Canada Enterprises Ltd. warned it will cancel plans to build a $1.6-billion fertilizer plant in the province if it can’t secure a reasonably priced source of gas in light of TransCanada’s plan to transform its west-to-east mainline to carry crude.

The province’s biggest gas distributor, Gaz Métro, plans to condemn the project as it is currently structured when it comes before the federal regulator for hearings.

Falling commodities are crushing the TSX Venture – by David Pett (Regina Leader Post – October 9, 2014)

October 9, 2014

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

Down 17% in the past month and 65% since 2011

The outsized gains and repeated record highs of the past few years on most global equity benchmarks still far outweigh the mounting losses of the past few weeks. Then there’s the SP/TSX Venture composite index.

Canada’s resource-heavy junior stock exchange is down a nightmarish 65% since peaking in early 2011, including a 17% drop in the past month alone, and it’s hard to envision much of a rebound anytime soon with oil, gold and other commodities still on the skids.

“The underperformance of the Venture will likely continue,” said Arthur Salzer, chief executive at Northland Wealth Management in Markham, Ont. “While it may be a surprise to some investors, the commodity supercycle has ended.”

Historically, bull markets in commodities have lasted 15 to 20 years, but the cycle this time around, which began in the early 2000s, was much shorter.

Mr. Salzer said extreme amounts of capital were raised to finance mining projects around the world during the past 10 years, leading to a vast oversupply of many hard commodities, including iron ore, copper and nickel. “We may have experienced 20 years of financing within a decade’s worth of time,” he said.

Commodities under pressure as China continues economic realignment – Simon Rees (MiningWeekly.com – October 9, 2014)

October 9, 2014

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

TORONTO (miningweekly.com) – Commodity prices will continue to face near-term challenges that are linked to the dip in Chinese growth. However, support is likely to come from the country’s new economic agenda, Scotiabank VP and commodity market specialist Patricia Mohr told attendees at the recent Global Chinese Financial Forum.

Gold will come under greater pressure as the US recovery gathers pace, while some opportunities are apparent in base metals, particularly with zinc. “In addition, because of the tremendous expansion in US and Canadian oil and gas production, there are some excellent prospects in the pipeline and railways sectors,” Mohr said.

NEW ORDER

China dominates the global base metals market, accounting for 46% of global demand. Given this, the country’s economic fortunes are closely monitored, with any dip in growth potentially representative of a reduced metals uptake. Chinese gross domestic product (GDP) growth for 2014 will be over 7%, which compares with 7.7% in 2013, Mohr said.

In the long term, support for commodities will come from China’s new economic agenda that was born out of a leadership change in 2013. One of the agenda’s central goals is to spur greater urbanisation to underpin growth and boost further infrastructure investment.

SPECIAL REPORT: Evangelist Len Lindstrom’s African gold mining venture fails – by Geoff Leo (CBC News Saskatchewan – October 09, 2014)

October 9, 2014

http://www.cbc.ca/news/canada/saskatchewan

700 Canadians, including Saskatoon’s Dean Britton, lose money in ‘God’s business’

A Saskatoon man who invested his life savings in an African gold mining company run by a globe-trotting Canadian televangelist is worried the entire project may have collapsed.

Dean Britton said for the past several years, evangelist-turned-CEO Len Lindstrom has virtually cut off contact with many of the 700 Canadians who invested at least $18 million in Liberty International Mineral Corporation.

And so Britton has taken it upon himself to research the company and communicate with as many of Lindstrom’s investors as possible. “He is such an expert at only telling his half of the story,” Britton said of Lindstrom. “I’m going to show the other half.”

Mining venture seemed like ‘God’s business’

A decade ago, Britton was tantalized by Lindstrom’s investment pitch of an African gold mine. Lindstrom explained he had licenced 21,000 square kilometres of potentially gold-rich land in Liberia.

RB Energy shutters Quebec lithium mine as financing fails – by Peter Koven (National Post – October 8, 2014)

October 9, 2014

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

TORONTO – The Lundin magic touch is paying off right now for Lundin Mining Corp. But it is not doing much for RB Energy Inc.

On Monday, Lundin Mining announced it has put together a US$2.2-billion financing package for a copper acquisition. It was a major achievement in a volatile commodity market, and shows how much faith investors have in chairman Lukas Lundin and his Lundin Group of Companies.

Meanwhile, RB Energy said Wednesday it has to shut down its Quebec Lithium mine because it failed to raise the funds needed to keep it going. Most of the staff were laid off, and three directors resigned.

While not officially listed as part of the Lundin Group, RB shares its Vancouver head office with the Lundins and is led by the same management team that ran Red Back Mining Inc., which was the crown jewel of the Lundin Group. Red Back was sold in 2010 for US$7.1-billion.

The Red Back team, led by chief executive Rick Clark, got control of the Quebec lithium mine early this year through a merger with Canada Lithium Corp.

The long and short on the stunning drop in oil prices – by Eric Reguly (Globe and Mail – October 9, 2014)

October 9, 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 commodities markets can work in mysterious ways, and oil is certainly doing that now. While the common assumption is that the speculative short positions held by the hedge funds are overtaking the market, they are in fact greatly outnumbered by the speculative long positions. That means more hedgies hope to profit from rising prices than falling ones.

That’s a brave bet when oil prices are in something close to freefall. As oil prices plunge, it is the longs, not the shorts, who are looking vulnerable.

In late September, the speculative long positions on U.S. oil prices – West Texas intermediate (WTI) is the benchmark – was about 420,000 contracts (each contract represents 1,000 barrels). The short positions amounted to only about 130,000 contracts, putting the net speculative long position at 290,00 contracts. That net position is extremely high, historically speaking. What do the longs see that the shorts do not? They could be gambling on an imminent bounce-back in prices. Or they could be dead wrong.

To be sure, the oil glut in North America is not as extreme as it appears elsewhere on the planet; fed by surging shale oil production, newly expanded refineries in the United States are running flat out and exporting a lot of their output, narrowing the traditional price gap between WTI and Brent crude, the latter being the effective global benchmark.

Government’s suppression of Mount Polley report ‘verges on the absurd’: lawyer – by Justine Hunter (Globe and Mail – October 7, 2014)

October 8, 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 B.C. government appears to have systemically breached its freedom of information law by withholding information related to the collapse of the tailings dam at the Mount Polley mine, environment lawyers say.

The province has refused to provide recent inspection reports related to the tailings pond, saying such information may undermine any one of three investigations to determine why the dam failed on Aug. 4, sending a torrent of toxic waste and debris into surrounding waterways.

But when provincial officials refused to hand over a 22-year-old report on the Mount Polley mine, the legal director for the University of Victoria’s Environmental Law Centre decided the suppression of information had gone too far.

“The provincial government’s refusal to provide timely access is not only highly troubling, but verges on the absurd,” said Calvin Sandborn in a 60-page submission asking B.C.’s Information and Privacy commissioner Elizabeth Denham for a review of the province’s conduct. The 1992 report was sitting on a shelf in the Williams Lake public library and a helpful librarian eventually sent him a copy.

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)

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.