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Canadian Media Resource Articles

Copper price expected to fall, possibly test $6 000/t as supply surges – GFMS – by Henry Lazenby (MiningWeekly.com – April 8, 2014)

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

TORONTO (miningweekly.com) – The global copper market is expected to post a moderate surplus this year, which will result in copper prices remaining under pressure, the fifth instalment of Thomson Reuters’ ‘GFMS Copper Survey 2014’ has found.

The average yearly price was expected to fall below $7 000/t in 2014 for the first time since 2009, with a test of the $6 000/t level deemed likely over the second half, the report states.

Launched on Tuesday during the CESCO/CRU copper conference in the Chilean capital city Santiago, this year’s study noted how copper prices continued to exhibit a downside bias in 2013, as a sharp acceleration in global mine supply and uncertainties over the global economic recovery dented the red metal’s near-term prospects.

GFMS said that the copper market was in a largely balanced position in 2013, despite global mine output rising by 8%, its fastest pace in more than a decade. Robust demand growth, a tight scrap market and delays in processing concentrate into refined metal limited the size of the market oversupply.

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Doyle’s exit from Potash well-timed – for him – by Brian Milner (Globe and Mail – April 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.

Potash Corp. of Saskatchewan faces a future that is far more complicated than its illustrious recent past. The golden era of buoyant sales, tight supplies and soaring stock values are plainly in the rear-view mirror. And now after a tough year marked by plunging profits and steep cutbacks, the captain is leaving the ship just as it sails into even rougher waters.

Bill Doyle will depart June 30 after 27 years with the company, the last 15 as CEO. Mr. Doyle, who is approaching 64, is certainly entitled to rest on his laurels. But his timing raises concerns about the course that the company intends to chart. And the fact that the board has anointed an outsider, Jochen Tilk, as his successor doesn’t cast a favourable light on Mr. Doyle’s mentoring abilities.

One marker of a successful tenure in the corner office is the ability to foster a coterie of senior executives capable of stepping into the top job. But in Potash’s case, a three-year search brought them to the door of Mr. Tilk, a 30-year mining industry veteran whose main attraction was apparently his “focus on operational excellence and disciplined growth,” in the words of board chairman Dallas Howe. That sounds to me like someone preparing for more heavy cost-cutting of the kind that shuttered some production and lopped off about 18 per cent of the Potash work force in December.

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Mulroney calls on Ottawa to appoint natural resource projects crusader – by Steven Chase and Kathryn Blaze Carlson (Globe and Mail – April 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.

OTTAWA — Former prime minister Brian Mulroney is calling on Ottawa to show greater leadership in getting Canada’s natural resources to world markets, warning this country needs a federal persuader-in-chief to secure support for major projects or risk being outmanoeuvred by foreign rivals.

He said uncertainty over major resource projects is hurting Canada. “Put simply, we cannot market our resources globally if we don’t have the infrastructure, political and industrial, to deliver them to market,” he said.

Mr. Mulroney did not criticize Prime Minister Stephen Harper directly in a speech Tuesday evening to an Ottawa audience that included federal ministers such as John Baird, who introduced the former prime minister, and Peter MacKay, whose father served in Mr. Mulroney’s cabinet. But he argued forcefully that federal leadership should take a more hands-on role in urging major players to support the construction of necessary infrastructure, from pipelines to liquefied natural gas facilities.

He called on Ottawa to create a resource development office, similar to the Trade Negotiations Office he used to build support for both the Canada-U.S. free trade agreement and then the North American free trade deal.

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Brian Mulroney didn’t come to bury Stephen Harper. But he didn’t come to praise him either – by John Ivison (National Post – April 9, 2014)

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

Brian Mulroney didn’t come to Ottawa to bury Stephen Harper. But he didn’t come to praise him either. The former prime minister was in the capital to speak about the “next big thing” for Canada — making the most of its treasure trove of oil, gas and mineral resources.

To do so requires political leadership, Mr. Mulroney said, and he was pretty clear he doesn’t think Mr. Harper has been providing it.“Prime ministers are not chosen to seek popularity, they are chosen to provide leadership,” he told the audience at the Canada 2020 dinner. “Leadership is the process, not only of foreseeing the need for change but making the case for change. Leadership does not consist of imposing unpopular ideas on the public but of making unpopular ideas acceptable to the nation.”

Mr. Mulroney knows about popularity — or lack of it. “Popularity is bad for you. I try to avoid it like the plague and I’ve been reasonably successful,” he said, back in 1992 when his personal numbers dipped to the lowest ever recorded for a prime minister.

But he was expressing a frustration that is becoming a common refrain from visitors to the capital. Jim Prentice, the former Conservative environment minister, made a similar point recently about the need to get pipelines built, develop alternative markets to the United States and beat back state-level fuel standards designed to keep oilsands oil from the American market.

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Quebec’s Plan Nord Promises A Mining Boom – by Daniel Tencer (Huffington Post Canada – April 8, 2014)

http://www.huffingtonpost.ca/

The business community — both inside and outside Quebec — breathed a collective sigh of relief Monday night when Philippe Couillard’s Liberals won a formidable majority government.

But for the resource sector, the defeat of the Parti Quebecois means more than just the removal of the risk of a separation referendum. It means the imminent acceleration of a massive mining development plan that will see an area in northern Quebec twice the size of France — a full 72 per cent of Quebec’s land — transformed over the next quarter century.

It’s called Plan Nord, and it was initially introduced in 2011 by the previous Quebec Liberal government of Jean Charest, whose successor, Pauline Marois, scuttled the project when the PQ came to power. Now the plan is back. Couillard made a slightly revised version of the plan a central part of his electoral platform.

“We’re putting most of it back as it was, because it was an excellent plan of sustainable development for Quebec,” he said, as quoted at Forbes. “Unfortunately the Parti Quebecois basically killed it when they came into office. They have a hostile attitude towards the mining industry, and private activity in general, so it wasn’t long before the signal was sent that this was over.”

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New Potash CEO takes reins amid tough landscape – by Rachelle Younglai (Globe and Mail – April 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.

Potash Corp. of Saskatchewan Inc. made the surprise appointment of a new chief executive officer with no fertilizer experience as the miner trudges through one of its most difficult periods in its history.

Jochen Tilk, the former chief executive of Inmet Mining Corp., has worked in the Canadian mining industry for more than 25 years and is recognized as a skilled operator who built his company into a respected metal producer.

But Mr. Tilk is unknown in the potash industry, where a handful of players have held sway over prices for decades and built their market share through negotiated deals with fast-growing economies like China and India.

He will become CEO as the Saskatoon-based company struggles to adjust to lower potash prices after Russian-based producer OAO Uralkali ended a partnership with its Belarus rival, a cartel-like arrangement to sell the fertilizer. Before the breakup, the Russian-Belarussian union along with Potash Corp. and its North American equivalent called Canpotex Ltd. controlled 70 per cent of the global potash market.

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Let’s not forget we [Canada mining] need help too – Russ Noble (Canadian Mining Journal – April 2014)

Russell Noble is the editor for the Canadian Mining Journal, Canada’s first mining publication.

There was a story on the evening news recently about Prime Minister Stephen Harper flying off to somewhere and it showed him climbing the stairs to his plane with his parting view to us as usual, but what really caught my attention was that he really looked like he didn’t want to go.

Head down, one hand on the rail as he trudged up the stairs and when he got to the top, not even a turn and a waive. He just got on and the door closed. Again, he looked like he was muttering to himself: “Why me, why do I have to go there again. They don’t understand me and I hate the food?”

Anyway, unlike other foreign trips where he’s often hand-in-hand with his wife Laureen as they climb the stairs, turn, smile and waive, then board the plane, this time the Prime Minister looked weary and dragged out; fed up with travelling.

In fact, I bet if someone asked him what he’d rather be doing than flying for eight or 10 hours with an entourage of staff and various other invitees, including the Press, he’d probably say: “Nothing.”

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Potash Corp. takes dramatic U-Turn with new CEO hire Jochen Tilk – by Peter Koven (National Post – April 7, 2014)

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

To many people, Bill Doyle is Potash Corp. of Saskatchewan Inc.

His bombastic personality and eternally optimistic outlook played a key role in bringing the sleepy fertilizer industry to the attention of investors. His oligopolistic practices were a model for the sector. His strategy and vision never wavered, even when BHP Billiton Ltd. came knocking with a $40-billion offer. And his 15-year tenure as chief executive is the longest of anyone among Canada’s 30 most valuable publicly-traded companies.

It is simply impossible to think of Potash Corp. and not think of Mr. Doyle. The 64-year-old is a rock star within the fertilizer business, a friend or a frenemy of absolutely everyone, be they customers, investors or rival producers. They all have stories to tell about Bill Doyle, the industry’s quintessential promoter and senior statesman.

Yet despite all of Mr. Doyle’s success, Potash Corp. has gone in a very different direction with his replacement. Indeed, the company has hired someone who is his opposite in almost every way. Jochen Tilk is a disciplined, conservative executive known for his strong operational skills. Unlike Mr. Doyle, he has avoided the limelight and has never spouted conspiracy theories on investor conference calls.

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Grassroots mineral exploration is undergoing a massive decline – by Ed Thompson (Canadian Mining Journal – April 2014)

The Canadian Mining Journal, is Canada’s first mining publication.

E. G. Thompson has worked in the exploration industry for over 50 years and been associated with a number of successful mining companies.

With both the senior and junior mining/exploration companies facing a plethora of problems, grassroots exploration is undergoing a dramatic decline as the industry comes off its recent highs.

Most of the senior companies have had massive cost overruns on their projects due to a combination of inflation , permitting , environmental and social costs and delays and difficult engineering supervision in their attempts to develop large projects in remote areas of the world.

Virtually no major mining project performed to specification and the financial markets have downgraded these companies. Lower metal prices, especially for gold, and many governments raising taxes, have exacerbated the situation.

This negative publicity has not been lost on the investor who understandably says “If the majors can’t perform, why should I risk my money on juniors?” 

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Canadian private equity firm raises more than $1-billion for precious metals fund – by Peter Koven (National Post – April 7, 2014)

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

Canadian private equity player Waterton Global Resource Management LP has raised more than US$1-billion for a precious metals fund, a massive number which demonstrates that private equity interest in the mining space continues to rise.

Toronto-based Waterton announced Monday that it has received capital commitments of US$1.016-billion. It plans to use that money for acquisitions, joint ventures and partnerships in the precious metals sector. The fund will focus on North American assets that are either in production or close to it.

Over the last several months, there has been constant speculation that private equity money is set to pour into the mining space. That talk intensified last week when Mick Davis, the former chief executive of Xstrata PLC, said he raised up to US$3.75-billion for a new mining venture.

Waterton made headlines of its own this year when it launched a hostile $59-million bid for a junior miner called Chaparral Gold Corp. The company has struck more than two dozen deals since launching its first mining fund in 2009, and it now has the capital to pursue many more of them.

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Time to make Canada free of conflict minerals – by Paul Dewar (Toronto Star – April 03 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.

Paul Dewar, New Democratic Party MP for Ottawa Centre riding, is the Official Opposition’s Foreign Affairs critic.

Today (Thursday, April 3) the House of Commons is to begin debating my bill C-486, the Conflict Minerals Act.
The illegal trade of conflict mineral from the Democratic Republic of the Congo and other parts of central Africa has been funding and fueling the deadliest war since the Second World War. The Conflict Minerals Act is a significant and proactive step toward ending the trade of conflict minerals and eventually ending the war.

The scale of the crimes in the Congo, and the connection between consumers and the conflict, is shocking. More than five million people have been killed. Rape is used as a weapon of war – with an estimated 48 women raped every hour. In 2012, there were 2.2 million people displaced and driven away from their homes.

Bill C-486 is part of an international trend to end the trade in conflict minerals and improve consumer awareness of product supply chains. The aim is to cut off the financial resources that sustain the horrors of war in the Congo. 

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How Quebec politicians are piggybacking on the battle for Osisko Mining – by Nicolas Van Praet (National Post – April 4, 2014)

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

MONTREAL – Business and politics mix freely in Quebec, sometimes in dangerous ways.

So when Yamana Gold Inc. announced early Wednesday it had struck a friendly deal to buy half of Montreal-based Osisko Mining Corp.’s mining and exploration assets while maintaining Osisko’s head office, it didn’t take long for provincial politicians to react. We are in an election campaign after all and in the eyes of some, there are points to be scored piggybacking on the affairs of private enterprise.

The governing Parti Québécois, eager to cast itself as the best defender of made-in-Quebec businesses, quickly called a press conference to discuss the transaction.

“This is very good news for Quebec’s mining industry,” declared natural resources minister Martine Ouellet, noting the partnership will split assets including Osisko’s flagship Canadian Malartic gold mine in the Abitibi region of Quebec. Finance Minister Nicolas Marceau focused on the role of the Caisse de dépôt et placement du Québec in the deal, saying the pension fund’s presence as a financial backer ensures Osisko will remain an independent publicly traded company.

For its part, Quebec’s Liberal Party, which is set to take power April 7 according to the latest poll, has insisted it wants any deal for Osisko to be a friendly one.

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Clarke Inc proposes three Sherritt board nominees – by Henry Lazenby (MiningWeekly.com – April 3, 2014)

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

TORONTO (miningweekly.com) – In its attempt to shake up the board of diversified miner Sherritt International, Halifax-based investment firm Clarke Inc on Thursday named its three nominees for election to the Sherritt board at the Toronto-based mining company’s annual and special meeting on May 6.

Under the leadership of Clarke president and CEO George Armoyan, a group of concerned shareholders nominated Armoyan, resource advisory and investment business Astor Group CEO Ashwath Mehra and 30-year accounting and international business veteran and Municipal Group of Companies VP of finance and CFO David Wood for election to the Sherritt board.

In a statement published on Thursday, the concerned shareholders sought to ensure that Sherritt’s board acted on behalf of all shareholders and increased its focus on creating shareholder value.

“Directors should share in the risks and the rewards alongside the shareholders of Sherritt. We believe a primary cause of Sherritt’s dismal performance is that the board has no incentive to improve the return to shareholders. “The directors are not significant investors but are exceptionally well paid, no matter how the company or its shares perform. Sherritt belongs to its shareholders. Together, we can regain the value lost,” Armoyan said.

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Editorial: Barrick rejigs exec pay – by John Cumming (Northern Miner – April 2, 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

Businessman and Bay Street veteran Peter Crossgrove, the one-time Placer Dome CEO and long-time Barrick Gold director, published his memoirs last year, and it makes for some lively and insightful reading, especially in light of Barrick’s newly revamped executive compensation program.

In his book titled “Boardroom games: You’re fired! When core values, respect and meaningful business practices are compromised for money and prestige,” Crossgrove is blunt in his criticism of the Barrick board, from which he was booted a couple of years ago to make way for Goldman Sachs’ John Thornton, who will become full Barrick chairman at the April 30 annual meeting, as founder Peter Munk retires.

“What do I think Barrick has to do to recover?” writes Crossgrove in 2013. “First of all, I would say they should find at least three directors who know the operating side of the business and form a technical committee . . . I suggest the chair, vice-chair and board members’ salaries be cut by 70%. They should only allow the chief operating officer the use of the corporate jet and get rid of the advisory board, which is a large expense and should be deleted . . . in 22 years I can only recall one meeting with the advisory board, whom I believe meet one day a year and are paid $100,000 per year.”

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Osisko finds white knight in Yamana Gold deal aimed at fending off Goldcorp – by Nicolas Van Praet (National Post – April 3, 2014)

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

MONTREAL – Osisko Mining Corp. chief executive Sean Roosen had to come back to his shareholders with an attractive alternative to Goldcorp Inc.’s bid or risk embarrassment. What he’s given them instead is a tricky transaction with Yamana Gold Inc. and two pension funds that the market is still struggling to digest.

Now, with its bid set to expire Friday, Goldcorp has to decide whether to raise its offer or walk away in a politically charged battle for Canada’s largest gold mine.

In a surprise agreement that values Osisko at about $3.4-billion, Toronto-based Yamana said Wednesday it will buy a 50% interest in Montreal-based Osisko’s mining and exploration assets. The two companies would be equal partners in Osisko’s operations and Osisko would maintain its head office in Montreal. Osisko’s flagship Malartic gold mine in Quebec would be run through a joint operating committee.

“This allows our Osisko shareholders to maintain their ownership in Canadian Malartic [while monetizing] shareholders who want to receive liquidity,” said Mr. Roosen, who owns 5% of Osisko.

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