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Hundreds in Peru Balk at Relocation From Site of Mine – by William Neuman (New York Times – January 6, 2013)

http://www.nytimes.com/

MOROCOCHA, Peru — High among barren peaks, a Chinese mining company has built the Levittown of the Andes. Long rows of identical attached houses face each other across wide, straight streets, one-third of them still waiting for people to walk through their varnished pine doors and make homes under their slanted red roofs.

The company, Chinalco, which is owned by the Chinese government, built the new town to relocate more than 5,000 people living in nearby Morococha, a century-old mining village. The company plans to demolish Morococha to make way for an enormous open-pit copper mine.

Chinalco has moved close to 700 families since September. But several hundred residents have resisted, staging marches and other protests even as their neighbors load their belongings into moving trucks for the trip to the new town, which has not been named yet; it may ultimately be called Nueva Morococha.

The two towns are only six miles apart — a 15-minute drive — and are at similarly lofty altitudes. Morococha is at about 14,760 feet, and the new settlement is just 650 feet lower, at a spot now called Carhuacoto. But for many, the move is like traveling between two worlds.

Morococha is old, decaying, squalid: a broken window into raw poverty and neglect.

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Friedland does it again with huge DRC copper project – Lawrence Williams (Mineweb.com – January 18, 2013)

http://www.mineweb.com/

Robert Friedland’s Ivanplats has just released new resource data on its Kamoa project in the DRC, placing it firmly among the world’s largest known undeveloped copper deposits.

LONDON (MINEWEB) – Canadian mining entrepreneur extraordinaire, Robert Friedland, appears to have done it again. Not merely content with his companies finding the Voisey’s Bay nickel mega-deposit in Canada and the giant Oyu Tolgoi copper/gold project in Mongolia, his recently floated Ivanplats company has unearthed what it claims is Africa’s and the world’s largest undeveloped high-grade copper discovery. The deposit is at Kamoa in the Democratic Republic of Congo (DRC), the location for most of Africa’s major high grade copper deposits.

According to the latest release from Ivanplats, Kamoa’s Indicated Mineral Resource has expanded to 739 million tonnes grading 2.67% copper, an increase of 115% since the company’s IPO in October last year. The new resource estimate has stemmed from a new, independent review of drilling results by AMEC E&C Services of Reno, Nevada.

The release goes on to note that the new estimate increases Kamoa’s Indicated Mineral Resources to a total of 739 million tonnes of material grading 2.67% copper, containing 43.5 billion pounds (19.7 million tonnes) of copper – more than doubling the previous September 2011 estimate of 348 million tonnes, containing 20.2 billion pounds of copper. Both estimates used a 1% copper cut-off grade and a minimum vertical mining thickness of three metres.

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Inmet to battle $5.1-billion hostile takeover bid – by Pav Jordan (Globe and Mail – January 16, 2013)

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.

Inmet Mining Corp. has a week to respond officially to a hostile takeover bid from rival First Quantum Minerals Ltd., but few expect anything short of a rejection of the $5.1-billion offer.

The owner of the coveted Cobre Panama copper project in Central America has until Jan. 24 to respond, and people familiar with the situation say it will come out swinging, recommending against the takeover and signalling progress in its search for an alternative palatable to shareholders.

Central to its defence will be a critical analysis of First Quantum’s track record on cost controls, meeting production targets and building mines in Latin America, said a source.

The company will allege First Quantum has a history of underestimating capital costs, as well as argue the Vancouver-based firm has no experience with capital projects the size of Cobre Panama, which will cost $6.2-billion to put into production.

How this plays out could prove critical to Inmet’s defence because the First Quantum bid of $72 a share is in cash and stock, which means the hostile suitor must convince investors of the value of its own shares.

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NEWS RELEASE: First Quantum Minerals Delivers Letter to Inmet Warning Against Improper Defensive Tactics

2013-01-12T16:24:32+00:00

VANCOUVER, BRITISH COLUMBIA–(Marketwire – Jan. 12, 2013) –First Quantum Minerals Ltd. (“First Quantum”) (TSX:FM) (LSE:FQM) today announced that it has delivered the following letter to David Beatty, Chairman of the Board of Inmet Mining Corporation, in response to reports received by First Quantum regarding a proposed sale of a further minority interest in the Cobre Panama project:

“Dear David,

First Quantum published details on 9 January 2012 of its previously announced proposal to create a new force in mining, with a globally significant position in copper, through a merger with Inmet. First Quantum is pleased that Inmet’s largest single shareholder, and one with representation on the Inmet Board, has already expressed public support for our proposal. We have also noted Inmet’s response to our offer for the Inmet shares (the “Offer”), including the establishment of a Special Committee to examine its merits.

First Quantum has been approached, directly and indirectly through its financial advisors, by a number of shareholders of Inmet who have expressed concern that Inmet is proposing to complete a sale of a further minority interest in the Cobre Panama project. These concerns are apparently based upon discussions with a senior executive officer of Inmet.

As you know, it is a condition of First Quantum’s Offer that Inmet and its subsidiaries not take any action which might have the effect of materially diminishing the economic value to First Quantum of the acquisition of Inmet shares or make it inadvisable for First Quantum to proceed with the Offer. We are therefore very concerned that the Special Committee could be contemplating steps which could deprive Inmet shareholders the opportunity to consider our Offer.

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Vale cut not ‘fatal’ to city’s economy – by Harold Carmichael (Sudbury Star – January 12, 2013)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Vale’s decision to cut in half the proposed $2 billion it would spend on a massive pollution-reduction project at the Copper Cliff Smelter site will affect local mining supply and service companies, but it’s not a fatal blow, says Dick DeStefano.

DeStefano, executive director of the Sudbury Area Mining Supply and Service Association, said local companies had about a 25% of Vale’s Clean Atmospheric Emissions Reduction project, which will now cost $1-billion. The members reaction, he said, is the work will be made up somewhere else.

“I haven’t heard one complaint because they made a business decision,” said DeStefano. “No one has called me up saying ‘I am losing a pile of money.’ Our guys are saying ‘let’s move on. There are other markets in other places. If we don’t see it here, there are others. We have to live with it.’”

DeStefano said the good news Thursday is the increased push to develop the Victor-Capre Mine and the Copper Cliff Mine brownfield site, which he said, could lead to $500 million-plus of investment at each site, more than making up for the lost $1 billion from Clean AER.

While he accepts that the Clean AER announcement was a business decision, DeStefano said the Copper Cliff Smelter could run into problems down the road when it operates with just one furnace.

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First Quantum accuses Inmet of trying to sabotage takeover – by Pav Jordan (Globe and Mail – January 12, 2013)

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.

Leading shareholders of Inmet Mining Corp., say the company is shopping a significant but minority stake in Cobre Panama, the $6.2-billion (U.S.) copper project it is developing in Central America, as it works to fend off a hostile takeover from Canadian rival First Quantum Minerals Ltd.

“First Quantum has been approached, directly and indirectly through its financial advisers, by a number of shareholders of Inmet who have expressed concern that Inmet is proposing to complete a sale of a further minority interest in the Cobre Panama project,” First Quantum said in a statement on Saturday, decrying the tactic as potentially diminishing the economic value of the acquisition of Inmet.

“These concerns are apparently based upon discussions with a senior executive officer of Inmet.” Sources say the stake could be as large as 20 per cent and as small as 15 per cent and would be sold as a tactic to defend against a $5.1-billion hostile bid for all of Inmet from First Quantum, a Vancouver-based firm with key assets in Africa.

Inmet could not be reached for immediate comment on Saturday, but company chairman David Beatty signalled earlier this week that the board was considering its options in the face of the hostile bid, including some that predate the offer.

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‘Clock starts ticking now’ on First Quantum’s Inmet pursuit by Pav Jordan (Globe and Mail – January 10, 2013)

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.

First Quantum Minerals Ltd. has started the countdown on its $5.1-billion hostile takeover offer for Canadian rival Inmet Mining Corp., taking the bid to create a “top five” copper producer directly to shareholders.

The $72-a-share offer was sweetened twice after Inmet, the owner of the massive Cobre Panama copper project, rebuffed friendly approaches by First Quantum at $62.50 in October and $70 in November.

“The clock starts ticking now, today,” First Quantum president Clive Newall said Wednesday, three weeks after announcing the company’s intention to go hostile.

First Quantum wants to get its hands on Cobre Panama, the $6.2-billion project Inmet is building in Central America, which will be the biggest mine in the region’s history.

The bid is a bet that demand for copper has even further room to grow after a decade of ravenous consumption by No. 1 consumer China that pushed prices to record highs last year of more than $4.50 (U.S.) a pound. On Wednesday, copper was trading at about $3.67 a pound.

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Project Focus: Ring of Fire – by John Chadwick (International Mining – January 2013)

http://www.im-mining.com/

There is a very exciting new mining camp developing in Canada, John Chadwick reports

According to the Ontario Government, “The Ring of Fire is one of the most promising mineral development opportunities in
Ontario in almost a century. Located in Ontario’s Far North, current estimates suggest the multigenerational potential of chromite production,as well as significant production of nickel, copper and platinum.”

The projects will open up economic opportunities in an extremely remote and undeveloped area, an 80 km by 100 km swath of
muskeg, especially for local First Nations communities. Any new infrastructure (community, social, etc.) will further benefitlocal communities. The region will require significant investment in mine and processing infrastructure, the construction and operation of transportation infrastructure and the provision of energy. Rail and all-weather road options are currently being assessed for the transportation corridor.

The exploration and prospecting involves some 16,400 claim units, covering an area of 2,630 km2, with 21 companies currently holding claims in the Ring of Fire belt. The area of most intense exploration is about 20 km long running northeast from Noront’s Eagle 2 prospect to Spider-KWG’s McFauld’s #2. Discoveries include chromite, nickel, copper, zinc, gold and kimberlite.

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Inmet faces hard sell in snubbing First Quantum’s $5.1B hostile bid – by Peter Koven (National Post – January 8, 2013)

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

For Inmet Mining Corp., the hard work is about to begin.

With First Quantum Minerals Ltd. expected to file its takeover circular imminently, the pressure will be on Inmet chief executive Jochen Tilk to explain why the $5.1-billion hostile offer for his company is inadequate. Inmet shares have jumped nearly 40% since news of a bid surfaced in November, and are trading roughly in line with the offer price of $72 a share.

It is understood Inmet hired CIBC World Markets as a financial advisor, and the Toronto-based miner is likely to argue the bid is far below fair value for Cobre Panama, one of the world’s largest copper deposits.

Analysts and investors generally agree the offer is low. However, they said Mr. Tilk could have a tough time fighting off First Quantum.

The central issue boils down to a question: Which company is better suited to build Cobre Panama? First Quantum has an outstanding track record of building large projects at lower cost than competitors, and has claimed it can do the same with this one. Mr. Tilk will try to prove Inmet can build the US$6.2-billion mine just as quickly and efficiently, and with no more of the cost inflation that has plagued this project and many others.

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Copper Fox announces positive feasibility study for sizeable BC deposit – by Henry Lazenby (MiningWeekly.com – January 7, 2013)

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

TORONTO (miningweekly.com) – TSX-V-listed copper junior Copper Fox Metals in December announced the positive results of a feasibility study on the Schaft Creek project, in north-western British Columbia (BC), providing for a substantial, economically feasible project with significant expansion potential.

The study, which built on four years of metallurgical and geotechnical work, provides for an openpit mining operation that would process 130 000 t/d over a 21-year mine life, producing and estimated 4.88-billion pounds of copper, 4.21-million ounces of gold, 25.1-million ounces of silver and 214.92-million pounds of molybdenum.

The current project, with its nominal 130 000 t/d milling capacity, represents a 30% increase from that previously proposed in the preliminary feasibility study prepared in September 2008, with a 20% increase in the estimated capital expenditure.

The study placed a price tag of $3.25-billion on the project, including contingencies totalling $374-million and sustaining capital expenditure is expected to total $1.24-billion over the proposed mine life, including $200-million for the BC Hydro tariff.

The project’s base case pretax net present value was calculated using long-term metal prices and exchange rates and an 8% discount rate, as required by Teck Resources, which has an earn-back option on Schaft Creek, at C$513-million and the internal rate of return is 10.13%, with a payback period of 6.5 years.

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Copper consumption to grow 4% annually through 2014—Fitch – by Dorothy Kosich (Mineweb.com – January 4, 2013)

http://www.mineweb.com/

The outlook for the base metals sector this year is stable as Fitch Ratings anticipates cautious spending and investment as well as improved profit margins.

RENO (MINEWEB) – Fitch Ratings forecasts that copper consumption will grow about 4% annually through 2014, based on a soft landing in China and a slow recovery in developed nations. European copper consumption is expected to remain depressed through this year.

“Fairly balanced markets are expected for 2013, while 2014 could show better supply,” said Fitch analysts.

Copper supply is expected to grow at about 3% annually through 2014 as production recovers from 2011 labor disruptions and new projects ramp up, offsetting lower grades in older mines.

Additional mine production of about one million tonnes per year in 2013 and 2014 “from the ramp-up of new projects in Africa’s copper belt, expansion projects, and recovery from operating disruptions,” said Fitch. “In 2014, nearly all the mine production growth will come from new greenfield projects and these are subject to higher risk of production shortfall.”

“New production from Africa, where infrastructure is less developed, also faces a higher risk of shortfall particularly from power disruption,” the analysts advised.

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Are You a Base Metal Growth Bull or a Gold Gloom-and-Doomer? – by Brian Sylvester (The Gold Report – January 2, 2013)

http://www.theaureport.com/

Gold bugs say the global economy could collapse any day now. But what about investors who see continued growth in emerging economies and a steady, if slow, U.S. recovery? Look to base metals, recommends Haywood Analyst Stefan Ioannou. He expects price runs for 2013–2015, especially for zinc, which is facing a serious supply squeeze. Do your homework now to get positioned as soon as the uptick begins. Ioannou shares his favorites in this Gold Report interview.

The Gold Report: Stefan, what is your 2013 outlook for copper?

Stefan Ioannou: Strong fundamentals underpin the copper price going into 2013. Despite a tough copper equity market in 2012, the metal price itself has been pretty solid, averaging around $3.60 per pound ($3.60/lb). Improving automobile numbers out of the U.S. and stronger manufacturing numbers out of China will both have a positive near-term impact on the copper price. We expect copper prices to move a bit higher in 2013.

TGR: How far off is a return to $4/lb copper?

SI: I think 2013 is too soon for a sustained $4/lb price, but it will likely test that mark a few times in the coming year. There is a stronger argument for a long-term $4/lb copper price.

TGR: Many of the copper companies you cover also have a zinc component. Zinc started 2012 near $2,200 per metric ton ($2,200/mt), dipped to $1,750/mt at midyear and now hovers around $2,000/mt. What is behind the volatility?

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Why First Quantum’s bid for Inmet likely won’t be its last – Bloomberg News (National Post – December 18, 2012)

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

The cheapest copper mining deal in five years has traders convinced that First Quantum Minerals Ltd.’s latest bid for Inmet Mining Corp. won’t be its last.

The C$5.1 billion ($5.2 billion) offer values Inmet, owner of the second-biggest copper mine under construction, at the lowest multiple of earnings before interest, taxes, depreciation and amortization for a deal of its size in the industry since 2007, according to data compiled by Bloomberg. Inmet shares climbed yesterday 1.2 percent above the C$72-a-share proposal — First Quantum’s third offer for the Toronto-based company since October — indicating arbitrageurs who bet on acquisitions expect another boost, the data show.

After Inmet last week raised estimates for the amount of copper contained at its Cobre Panama mine, Canaccord Financial Inc. said it would take a bid of at least C$80 a share to win over investors, particularly with the top shareholders controlling a majority of the stock. While Inmet could draw other suitors, Vancouver-based First Quantum’s desire for a friendly deal suggests it may be willing to pay more whether or not there are rival bidders, according to Bank of Montreal.

“The market is clearly saying that we are going to need a higher price to push this through,” Barry Schwartz, a Toronto-based fund manager at Baskin Financial Services Inc., which oversees about C$450 million including Inmet shares, said in a telephone interview.

Cobre Panama “is going to be one of the greatest mines that’s going to come on stream in the second half of the decade. We’re running out of quality finds of copper, and Inmet has one of them.”

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Potential suitors eye Inmet’s Panama project – by Pav Jordan (Globe and Mail – December 19, 2012)

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.

If it’s a white knight Inmet Mining Corp. is looking for, there’s no shortage of candidates it might lure to its massive world class copper project in Panama.

Inmet has yet to comment on the merits of a $5.1-billion hostile takeover offer from rival First Quantum Minerals, the Canadian copper miner that wants to combine the companies and become a top five producer. Late last month Inmet rejected an informal approach from First Quantum that valued it at $4.9-billion, saying it was highly conditional.

Industry experts say Inmet has essentially put itself up for sale, and expect it to start an auction process to attract a bid higher than the $72 per share on offer from First Quantum.

“The next question is who, because so often a bidder comes out of the woodwork and you say, ‘Oh, I didn’t think of them,’ ” said Raymond Goldie, an analyst with Salman Partners in Toronto, pointing to Teck Resources Ltd., Canada’s largest diversified miner, as a potential candidate.

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Inmet investors bet on a higher bid – by Pav Jordan – (Globe and Mail – December 18, 2012)

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.

Inmet Mining Corp. shares rose more than 4 per cent Monday as investors in the Toronto miner bet that an ardent suitor has not played its last card with its $5.1-billion hostile takeover bid.

First Quantum Minerals Ltd. offered Inmet shareholders $72 a share over the weekend, sweetening for the second time its offer for the owner of a large copper asset in Panama. A first, informal approach on Oct. 28 valued the company at $62.50 a share and a Nov. 28 offer was for $70 a share, or $4.9-billion.

“We’re happy but, you know, not a lot has really changed,” said Terry Thib, a portfolio manager with Norrep Funds in Toronto that holds Inmet shares. “You could say it’s below where it should go out, given they are not working with a full set of data.”

Investors point out that the way the stock-and-cash offer is structured, it is worth about the same today as it was a few weeks ago because First Quantum shares have lost some of their value in the interim, including a 4-per-cent drop on Monday.

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