Twitter

Canadian Media Resource Articles

Ex-Goldman Banker Emerges as Barrick Gold Dealmaker – by Liezel Hill and Christopher Donville (Bloomberg News – April 22, 2014)

http://www.bloomberg.com/

A week before Barrick Gold Corp. (ABX) Chairman Peter Munk retires, his successor John Thornton is emerging as a dealmaker as the former Goldman Sachs Group Inc. banker pursues a bid to combine the two biggest gold miners.

Negotiations between Barrick and Newmont Mining Corp. broke off last week amid minor disagreements while leaving open the possibility that discussions could still resume, two people with knowledge of the matter said April 19.

The deal under discussion would have seen Thornton become executive chairman of the combined company while the chief executive officer would have been Gary Goldberg, who currently leads Newmont, the people said. Toronto-based Barrick’s CEO Jamie Sokalsky would have led a smaller gold producer spun off from the merged company, according to the people.

The proposed tie-up and its management reshuffle confirm Thronton’s elevation as Barrick’s most senior executive. The 60-year-old, who had no role in the mining industry until he joined the company’s board just over two years ago, is set to succeed Munk, Barrick’s 86-year-old founder, as chairman at the annual shareholders meeting next week. Leading a successful acquisition of Newmont (NEM), in what would be the biggest gold takeover, would set up Barrick to do further deals, including ones involving other commodities.

Read more

Good Friday news reveals bad politics [Tom Steyer and Keystone Pipeline] – by Lorne Gunter (Toronto Sun – April 23, 2014)

http://www.torontosun.com/home

It’s an old public relations strategy in politics that the best time to announce bad news is late on a Friday. That way, the news hits when most of the public (and much of the media) isn’t paying attention. It takes a couple of days for the bad news to trickle down.

Really bad news should be announced on the Friday before a long weekend. So what kind of news gets announced on a Good Friday? Good Friday isn’t just the start of a long weekend, it’s one day into a four-day long weekend.

On top of that, Good Friday is the most solemn day in the Christian calendar. Even nominal Christians who never darken a church door the rest of the year somehow make it to service on GF.

So the attempt by the Obama White House to bury deeply its newest delay on the Keystone XL pipeline by announcing it late last Friday – Good Friday — was not merely tactical, it was cowardly. The time for diplomatic niceties is over. Let’s call a coward, a coward. And Barack Obama is a coward.

He can’t stand up to Russian President Vladimir Putin as Putin prepares to gobble up the old Eastern European client states of the Soviet empire.

Read more

[Barrick’s] Munk touts ‘significant synergies’ in potential Newmont deal – by Rachelle Younglai (Globe and Mail – April 23, 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.’s founder and chairman Peter Munk said merging with rival Newmont Mining Corp. could result in “significant” cost savings, especially in Nevada where the two North American gold miners operate.

The world’s two largest gold producers had hoped to announce an all-stock merger deal before Newmont’s annual shareholder meeting in Delaware on Wednesday, but disagreed over which assets to spin off, sources have said. Although talks were halted late last week, the companies are still open to merging in an effort to cut costs amid the deep slump in gold prices, sources have said.

“Combining Barrick and Newmont could result in significant synergies and cost savings, particularly in Nevada, where our operations are literally next door to one another,” Mr. Munk said in an e-mailed statement.

Gold has lost more than a third of its value since peaking above $1,900 (U.S.) an ounce three years ago. The weaker precious metal price, now trading below $1,300 an ounce, has forced the gold industry to overhaul operations to preserve cash.

Read more

Teck Resources Ltd to cut 600 jobs, warns current coal supply is ‘uneconomic’ – by Peter Koven (National Post – April 23, 2014)

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

TORONTO – Steelmaking coal producers have started to slash production in response to lower prices, but Teck Resources Ltd. is warning that a lot more supply needs to be cut by high-cost rivals to bring the market into balance.

“Prices are currently at their lowest level since 2007, and margins are at their lowest level in 10 years,” chief executive Don Lindsay said on a conference call Tuesday. “We continue to be surprised there remains so much uneconomic coal supply on the market.”

Vancouver-based Teck announced on Tuesday that it will cut roughly 600 jobs as it tries to reduce costs and adapt to lower commodity prices, particularly for coal. The company’s realized coal price in the first quarter was US$131 a tonne; by comparison, Teck sold its steelmaking (or coking) coal for an average of US$257 a tonne in 2011.

The market has gotten even worse in recent weeks. The benchmark price for the second quarter is just US$120 a tonne, while spot prices have flirted with US$100.

Prices are falling because of concerns about rising production, slowing growth in China and the fact the Chinese government is closing some the country’s dirtiest steel mills to reduce air pollution.

Read more

Globe in Ukraine: In a former mining town, nostalgia for Soviet era – by Mark MacKinnon (Globe and Mail – April 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.

HORLIVKA, UKRAINE — You can smell Horlivka before you see it: the acrid output from the aging chemical plants and machinery factories that still limp along, though only at a fraction of the pace they once did.

Then you hit the jarring, metre-long potholes and get a glimpse of the city’s grim skyline of crumbling apartment blocks. The Soviet Union fell 23 years ago. Horlivka has kept falling ever since.

The next thing you sense in Horlivka is anger. Armed men have taken over the city’s main police station, and have built a wall of tires around it. Checkpoints flying the black-blue-and-red banner of the self-proclaimed Donetsk People’s Republic, often alongside the flag of the Russian Federation, block the roads into the city.

But residents of Horlivka and other parts of eastern Ukraine don’t really want to live in an independent Donetsk. In many ways, they don’t even want to live in today’s Russia, although there’s a lot of admiration for President Vladimir Putin here.

What they want is to go back in time, to when the Soviet Union still existed and Horlivka residents had jobs producing things that people in other places wanted to buy.

Read more

Editorial: Still plenty of appetite for M&A – (Northern Miner – April 21-27, 2014)

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

While private equity financing was the talk of the mining industry in the first quarter, heavy duty mergers and acquisitions are punching their way back to centre stage, as mining majors take advantage of depressed metals prices and share valuations to realign their businesses.

The brawling between Yamana Gold and Goldcorp over Osisko Mining and its prized Canadian Malartic gold mine in Quebec has just seen Agnico Eagle Mines jump over the boards and join the All-Canadian slugfest as third man in on Yamana’s side.

In a surprise move on April 16, Agnico teamed with Yamana to table a joint friendly, cash-and-share takeover bid worth $3.9 billion, or $8.15 per Osisko share, trumping Goldcorp’s recently revised hostile cash-and-share bid of $3.6 billion, or $7.34 per share. The offer is a 10% premium to Osisko’s share price on April 15.

As detailed on our front page, the deal would end with Osisko shareholders owning 14% of Yamana and 17% of Agnico, and would include an innovative spin-out of a cashed-up company with a portfolio of royalties, plus assets such as Osisko’s grassroots project in Mexico.

Read more

Goldcorp Inc abandoning hostile bid for Osisko – by Peter Koven (National Post – April 22, 2014)

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

Goldcorp Inc. has elected not to raise its hostile offer for Osisko Mining Corp., leaving the company to be acquired by Yamana Gold Inc. and Agnico Eagle Mines Ltd.

Vancouver-based Goldcorp announced on Monday afternoon that it will let its $3.6-billion hostile bid for Osisko expire on April 22 instead of raising it.

Goldcorp vowed all along that it would not overpay for Osisko, and most investors suspected it would not raise its offer for a second time. Goldcorp launched its first bid in January and increased it earlier this month.

“We stated from the beginning of this process that we would remain disciplined with respect to our offer to acquire Osisko, and our decision not to amend the offer is consistent with that commitment,” chief executive Chuck Jeannes said in a statement.

“We move forward with an outstanding portfolio of mines and projects, and our focus will remain on maximizing the value of our investments and generating strong returns for our shareholders.”

Read more

Barrick Gold-Newmont Mining ripe for merger as conditions favour tie-up of world’s gold giants – by Peter Koven (National Post – April 22, 2014)

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

Barrick Gold Corp. and Newmont Mining Corp. have held merger talks numerous times in the past without getting a deal done. But conditions finally appear right to bring together the world’s two largest gold producers.

A rough gold market, along with new personalities on both sides of the negotiating table, have helped the two companies overcome their longstanding differences and put them on the cusp of a deal that analysts and investors have eagerly awaited for years.

Recent merger talks between the two sides broke down over a disagreement on what assets to put into a spin-off company, according to sources. However, the broad terms of the merger were largely agreed upon, with Toronto-based Barrick planning to buy Denver-based Newmont for close to US$13-billion in stock, representing a small 13% premium over its recent trading range.

The two gold miners hoped to announce the deal ahead of Newmont’s annual meeting on Wednesday, but that now appears unlikely. Newmont shares rose 6.4% on Monday. Barrick shares opened higher, but then declined as gold dropped and investors absorbed the merger news. They ended the day down 4%.

Read more

Terence Corcoran: From Northern Gateway to Keystone, the undefinable ‘social licence’ movement is in control of jobs and growth – by Terence Corcoran (National Post – April 22, 2014)

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

The Northern Gateway and Keystone pipelines keep getting hammered, the result of what seems like universal adoption of a new free-market killing concept known as a “social licence to operate.” The idea is an outgrowth of the anti-corporate governance crusades and NGO activism of the last few decades. First came stakeholderism, then corporate social responsibility(CSR). At least with CSR corporations were seen to be in charge of their own affairs, taking it upon themselves to curb their carbon emissions and diversify their workforces, or whatever, as they saw fit.

Under social licence mandates, corporations must now negotiate directly with the people, in line with the old Communist maxim: “Everything belongs to the people.” The corporate sector fell for the idea, and now it is lost under what has become something of social licence to kill growth and jobs.

In a non-binding plebesite earlier this month, residents of Kitimat, B.C., appeared to reject Enbridge’s Northern Gateway gas pipeline and tanker port project. The 60-40 verdict was taken as a defeat for Enbridge, a sign that -–as the Vancouver Sun editorialized—the company “simply does not have the social licence necessary to proceed.”

Read more

Barrick must check its hubris to achieve a smooth Newmont merger – by Boyd Erman (Globe and Mail – March 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.

Barrick Gold Corp. says its strategy is no longer about bigger, but about better. A successful merger with Newmont Mining Corp. has got to be about a bit of both.

Barrick is not talking yet, as no deal is done, but job one when a transaction is finalized will be to explain just how a combination with Newmont would square with Barrick’s new strategy.

Toronto-based Barrick has long sought to gain control of Newmont. Talks have gone on and off for more than decade as Barrick grew to become the world’s largest gold producer.

Newmont plus Barrick would create by a huge margin the world’s largest gold miner. There was a time when that would have been sufficient rationale for Barrick, but that is no longer good enough. Shareholders want returns and cash flow from their mines. They want profit from mining companies, not just growth.

Read more

Harper’s vision of Canada as energy superpower thwarted by opposition to pipelines – by Les Whittington (Toronto Star – April 21, 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.

A grassroots movement against B.C.’s Northern Gateway project and a White House decision to delay approval of Keystone XL are the latest blows to Conservatives’ plans to ship more oilsands crude abroad.

OTTAWA—The Harper government, which never foresaw that pipelines would become the battleground in a frenzied struggle over climate change, is contending with a continentwide wave of political opposition that has imperilled plans to sell more Canadian petroleum in foreign markets.

In British Columbia, a few thousand people in the small coastal town of Kitimat have given powerful symbolic momentum to the movement against pipelines designed to carry oilsands-derived crude for export.

In one of the first soundings of voter attitude toward the proposed Northern Gateway pipeline planned for B.C., the citizens of Kitimat turned out to reject the project in a referendum. The result of the unusual April 12 plebiscite, though non-binding, was seen as a serious blow to Enbridge Inc., the company behind the planned $6.5-billion conduit to carry oil from Alberta across the Rockies to an export terminal in Kitimat.

Read more

How to cool the planet – by Lorrie Goldstein (Toronto Sun – April 19, 2014)

 http://www.torontosun.com/home

Nuclear power, natural gas and carbon capture technology hold far more promise than near-useless wind and solar energy

The key finding in the latest report from the United Nations’ Intergovernmental Panel on Climate Change (IPCC) is this: It acknowledges the reality any viable move to a low-carbon dioxide global economy must include nuclear power, replacing coal power with natural gas and carbon capture and storage (CCS).

Predictably the IPCC — being in thrall to radical environmentalists who hate all of these ideas — goes on to praise expensive, unreliable and inefficient wind and solar power which, at their current level of development, cannot power modern, industrialized economies like Canada’s.

Nor can they power developing economies like China’s, the world’s biggest greenhouse gas emitter, which is building hundreds of coal-fired electricity plants. The key passages of the latest 33-page IPCC report are on page 23 and 24, where it addresses the need for non-emitting and low-emitting conventional energy technologies to reduce rising global greenhouse gas (GHG) emissions.

“Nuclear energy is a mature low-GHG emission source of baseload power” the IPCC acknowledges, “but its share of global electricity generation has been declining (since 1993).

Read more

Ottawa to force energy companies to report payments made to native bands – by Shawn McCarthy (Globe and Mail – April 21, 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 — The federal government is proposing measures that would require mining and oil companies to report all payments made to native band councils and their corporations as part of Ottawa’s push for greater transparency among aboriginal governments.

Officials from Natural Resources Canada are consulting with industry, non-governmental organizations and aboriginal communities over plans to require mandatory reporting of all payments made by resource companies to foreign and domestic governments. Unlike similar regulations in the United States and Europe, the federal rules would include aboriginal governments and their corporations.

The demand for mandatory resource-revenue reporting comes amid a concerted effort by the Conservative government to increase financial disclosure from aboriginal communities to combat concerns over mismanagement and corruption. In a high-profile case last week, the Nishnawbe-Aski Police Service charged the former co-manager of the remote Attawapiskat Reserve in Northern Ontario – who is also the common-law spouse of chief Theresa Spence – with two counts of fraud and theft after the band council conducted its own investigation.

Read more

From wasteland to parkland: Mining greens up – by Daina Lawrence (Globe and Mail – April 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.

Today, the aerial view of the historic Coniaurum gold mine, owned by Goldcorp Inc. since 2002, more closely resembles a putting green on a golf course than an old mine site. But it didn’t always look like this.

For decades it was a wasteland of discarded rock – leftovers from its previous life as an active mine since 1913, until a storm in 1961 caused a breach in the tailings dams and shut down operations for good.

Past practices did not call for any closure or clean up of these sites, so for more than 30 years the Timmins, Ont.-based mine site sat almost untouched. But through a mergers and acquisition deal, Goldcorp Inc. inherited the historic mine (along with almost 20 others) and in 2005 the company began its multimillion-dollar reclamation project. It took three years and between $10-million and $12-million to complete, but the current property now grows plant life and even acts as home to a colony of beehives that aid in Coniaurum’s revegetation.

“The goal, with this property in particular, is to bring us back as close as possible to the original vegetation that would have been there before mining,” says Marc Lauzier, manager of Goldcorp’s Timmins property. “We have to do what’s right and do a complete mining cycle, which ends when you can return the land to its original state,” he adds.

Read more

Indonesian ban on unprocessed ore exports may help Vale – (CBC News Sudbury – April 17, 2014)

http://www.cbc.ca/sudbury/

A new commodities report projects a boost in the price of nickel over the next three years — and that will have an impact on mining companies in Sudbury.

The projected price hike is connected to what’s happening overseas in Indonesia, where that country recently put a ban on exports of unprocessed ore—an effort to encourage foreign investment in domestic refining activity.

The country produces about 28 per cent of the world’s nickel, so its withdrawal from the global market marks a significant drop in supply. Recent nickel prices have reflected this new reality, as it reached a six-month high this week at $8.11/lb.

“I have revised upward my price forecast for 2015 to $9 a pound,” said Patricia Mohr, a commodities specialist with Scotiabank.  “We started this year at prices just a little above $6, so it does represent quite an improvement.”

Miner Vale has operations in Indonesia, but spokesperson Cory McPhee said the company won’t be affected by the ban. “We’re a company that actually produces a refined nickel product in Indonesia,” he said.

Read more