Junior Exploration Sector – Page 47

TMAC Resources, Pretium Resources key to future of junior mining sector – by Tim Kiladze (Globe and Mail – September 24, 2015)

September 24, 2015

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.

Few companies are reeling from the commodity collapse as badly as junior miners. Three years into the supercycle’s crash, investors who stick by the sector have largely abandoned smaller explorers and developers in favour of established companies whose projects are up and running.

The major knock against junior miners has been financing risk. No one knows if they will be able to raise the money they need to get their projects into production because shareholders have been so badly burned. That makes the recent developments at TMAC Resources Inc. and Pretium Resources Inc. all the more interesting.

In June, TMAC raised $135-million in a rare mining initial public offering, giving the company enough cash to get to the production phase. Last week, Pretium announced a $540-million (U.S.) financing package that gives the miner 70 per cent of the capital it needs to build its Brucejack mine in northern British Columbia.

SNL Official: Exploration Spending Declines With Price Of Metals (Kitco News – September 21, 2015)

September 22, 2015

http://www.kitco.com/

(Kitco News) – The amount of exploration spending for gold and other metals has declined in the last few years along with prices, said David Cox, senior sales executive for SNL Metals & Mining, during a presentation to the Denver Gold Forum Monday.

Exploration by junior-mining companies has fallen especially sharply, with a weaker equity market cutting into the amount of money these firms can raise for drilling and other work to discover new mines, he said.

The reduced exploration and capital spending have implications for the future supply of metals. “Discovery is the only way to add new resources and reserves to supply,” Cox said.

He said over the last decade, “there has been a declining rate of discoveries in the gold sector, and now that’s being exacerbated by the capital cutbacks, in particular by the majors but also junior companies are unable to raise money to do their work.”

How smaller Canadian gold miners are thriving despite today’s gloomy price environment – by Peter Koven (National Post – September 19, 2015)

September 21, 2015

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

KIRKLAND LAKE, ONT. – Deep underground in Kirkland Lake, 300 kilometres north of Sudbury, it is hard to think about the rich veins of gold near at hand. The heat and humidity overpower everything else.

Crews are currently working 5,400 to 5,600 feet below surface, making it one of Canada’s deepest gold mines. And in this part of the world and at these depths, a first-time visitor would find the temperature suffocating.

Work crews start dripping with sweat almost as soon as they step out from the shaft underground to begin their shift. Mining this far down is technically challenging and not for the faint of heart. But more than 100 years after the first shaft was sunk in this sturdy Northern Ontario community, it looks as attractive as ever — even if it is surrounded by an environment of gloomy gold prices.

The Kirkland Lake operation, known as Macassa, is one of the world’s richest gold mines by any measure — the data service IntelligenceMine ranks it second overall. The mine’s owner, Kirkland Lake Gold Inc., likes to say that of the world’s 10 highest-grade operations, this is the only significant one that isn’t owned by a major company.

[Northern Superior Resources] Sudbury junior miner squares off against province – by Ian Ross (Northern Ontario Business – September 17, 2015)

September 17, 2015

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

Barring a last-minute settlement, a Sudbury junior mining company expects to be in a Toronto courtroom in early October to take on the Ontario government in a potential landmark case that could prompt revisions to Ontario’s Mining Act concerning First Nation consultation.

“I’d rather be talking about exploration,” lamented Tom Morris, president and CEO of Northern Superior Resources, who was making preparations for a four-week trial in an Ontario Superior Court starting Oct. 5.

Northern Superior is seeking compensation from the province for failing to protect its interests in a gold exploration play in northwestern Ontario that the company was forced to abandon its mining claims after a series of disputes with a First Nation community in 2011.

Close to two years ago, Northern Superior filed a $110-million lawsuit in late 2013 to recover the $15 million it spent on exploration since 2006, plus the estimated future value of the three properties on Crown land as they worked toward a major gold discovery near the Manitoba border.

Sudbury’s Wallbridge Mining signs $11-million deal – by Staff (Sudbury Star – September 17, 2015)

September 17, 2015

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

Lonmin Canada Inc. and Lonmin Plc will spend $11 million over four years in a joint venture agreement with Sudbury-based Wallbridge Mining Company Limited.

In exchange, Lonmin can earn up to a 50 per cent interest in Wallbridge’s four Parkin Properties located North of Sudbury. The deal was announced Wednesday.

“Our business plan … focuses on acquiring value-accretive near-term production opportunities, as well as advancing our exploration properties, including our Parkin Properties, through joint venture partnerships,” Marz Kord, president and CEO of Wallbridge, said in a release.

“I am pleased that we have not only advanced our discussions regarding some external assets, but have now amended the (North Range Joint Venture agreement) with Lonmin to include our Parkin Properties. This plan provides the company with sustainable cash flow, while maintaining active exploration for large-scale discovery upside in the Sudbury camp.

Do tax credits help Northern mining? Economists and industry disagree – by Chris Windeyer (CBC News North – September 4, 2015)

September 8, 2015

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

‘Everybody thinks it’s a magic bullet but it doesn’t do anything,’ economist says

It’s been a regular feature of Conservative federal budgets since 2006: an extension, for another year, of the 15 per cent Mineral Exploration Tax Credit.

The Conservative Party is now promising to extend that credit for another three years, if it’s re-elected, and boost the credit to 25 per cent in remote areas, including the territories and large parts of the provincial North.

There’s just one problem, says Lindsay Tedds, an economist with the University of Victoria: it may not actually work.

“Everybody thinks it’s a magic bullet but it doesn’t do anything,” Tedds says. “It does not increase investment to the point where you’re going to have increased exploration.”

Mining makes its debut in Canadian election – by Andrew Topf (Mining.com – September 6, 2015)

September 8, 2015

http://www.mining.com/

It’s not often that mining makes headlines as an election issue in Canada, but there it was last week, when Prime Minister Stephen Harper made a scheduled campaign stop in the battleground riding of Nipissing–Timiskaming in Northern Ontario.

Harper, whose incumbent Conservative Party finds itself in a tight three-way race with the Liberal Party and the NDP, told a group of supporters in North Bay that the 15 percent mineral exploration tax credit, in place since 2006, would be extended at least another three years if the government is re-elected.

Projects that face steep overhead costs due to remote locations, such as the Ring of Fire in Northern Ontario and the Plan Nord in Quebec, would qualify for a 25 percent tax credit.

The cost of extending the credit and the new enhanced credit would be about $60 million a year starting in 2016-17. Both Liberal Party leader Justin Trudeau and the leader of the NDP, Tom Mulcair, have said they oppose the tax credit.

Why the Mineral Exploration Tax Credit is such a bad idea – by Lindsay Tedds (MACLEAN’S Magazine – September 2, 2015)

September 8, 2015

http://www.macleans.ca/

With taxpayers worried about government spending, we should demand better than the renewal of a credit that represents a wasteful use of tax revenues

Conservative leader Stephen Harper speaks with Joe Guido, President of Premier Mining Products as he is shown drill bits during a campaign stop in North Bay, Ont., on Wednesday, September 2, 2015. THE CANADIAN PRESS/Adrian Wyld
Conservative leader Stephen Harper speaks with Joe Guido, President of Premier Mining Products as he is shown drill bits during a campaign stop in North Bay, Ont., on Wednesday, September 2, 2015. THE CANADIAN PRESS/Adrian Wyld

As I am sure all of Canada knows (and much of the world), Canada’s much awaited gross domestic production (GDP) numbers came out Tuesday. Everyone, by now, knows the punchline, but buried in those numbers were little gems that I was certain would lead to policy announcements today. And I was right. The first ones out of the gates have been the Conservative Party of Canada (CPC) which announced an extension to and enhancement of the Mineral Exploration Tax Credit.

Fission’s uranium price – by Kip Keen (Mineweb.com – September 4, 2015)

September 4, 2015

http://www.mineweb.com/

There is a big gap between the company’s assumptions and reality.

HALIFAX – First let me say Canadian-junior Fission Uranium has its hands on a delightful discovery with the Triple R deposit. It’s already pretty big, high grade, and set to grow.

It and predecessor companies made the find a few years back in the Athabasca Basin, where the cream of the world’s uranium resides – at least in terms of grade. They recently calculated a 79.6 million pound uranium resource, indicated, at 1.58% U3O8. That’s quite sizeable and high grade by the industry’s standards.

Fission has released an early stage economic analysis (preliminary economic assessment or PEA in Canadian parlance) that puts the price tag at $1.1 billion to get it into production, with a 14-year mine life. It also anticipates pretty low operating costs per tonne – in the mid-teens per pound uranium.

But here’s my beef on the PEA and I’m not alone in having it. Fission (and RPA as the consultant) use $65/lb uranium as the base case in the PEA, giving it a catchy 35% IRR, post-tax. Yet current uranium prices are a lot lower in spot and contract markets and have been so for years.

‘This market downturn is worse than ’08’ – Scotiabank – by Kip Keen (September 1, 2015)

September 2, 2015

http://www.mineweb.com/

Comparing this downturn with others in recent memory.

HALIFAX – The last major downturn in commodities – during the 2008/09 financial crisis – was the central focus of Scotiabank analyst Patricia Mohr’s latest missive on metals and energy commodities.

Mohr – Scotiabank’s commodities guru – noted that Scotiabank’s commodities index, comprising, energy, metals, and fertilizers, dropped below levels last seen during the relatively brief rout in commodities seven years ago.

“The All Items Index is now well below the bottom touched during the ‘Great Recession’,” Mohr pointed out in a recent report.

“While many commodity prices remain above 2008/09 recessionary lows, current weakness is broader based and reflects a prolonged period of sub-par global growth.”

In particular, she highlights the latest weakness in oil prices amid declining metal prices. “An ongoing battle for market share in oil — recently exacerbated by heightened concern over a further slowing in the Chinese economy — combined with consternation over possible Fed monetary policy tightening in September have largely accounted for commodity price weakness.”

Three-way Canada gold junior merger falls short – by Frik Els (Mining.com – September 1, 2015)

September 2, 2015

http://www.mining.com/

Shares in Gold Canyon Resources (CVE:GCU) and PC Gold (CVE:PKL) shot up on Tuesday massive trading volumes, after announcing that First Mining Finance Corp. (CVE:FF) will be acquiring all the shares of both explorers.

Vancouver-based Gold Canyon was last trading at $0.175, up 52.2%, drifting lower as the day wore on after the counter doubled at the start of trade on the TSX Venture Exchange. Gold Canyon, which owns gold projects in Canada and a rare earth prospecting licence in Tanzania is now worth $29 million in Toronto. More than 7.7 million shares changed hands (some 30 times usual volumes) making it the most active stock on the venture board.

PC Gold, based in Toronto, jumped 66% by the close affording the Ontario old mine explorer a $5.4 million market valuation after roughly 2 million shares were traded. Both counters ended well below the implied premium offered by First Mining over their 30-day average price which was 204% for Gold Canyon and 255% above PC Gold’s share price.

First Mining Finance shareholders were on the losing end of the deal – the Vancouver company which calls itself a mineral bank gave up a fifth of its value on the TSX-V by the close for a $28.2 million market cap.

Trying to avoid the ‘extinction’ of Canada’s junior mining companies – by Simon Doyle (Globe and Mail – August 31, 2015)

August 31, 2015

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.

Simon Doyle covers lobbying and the intersection of business and politics in Ottawa. He writes for Politics Insider, which is available only to subscribers of Globe Unlimited.

The mining industry is lobbying for government help for junior mining companies and northern infrastructure as more juniors have delisted from the TSX and the commodities rout has deepened.

Minerals continued to fall early last week before a tumultuous few days on the markets. Fears about China’s economy and its metals consumption have refreshed arguments among members of Canada’s mining-industry associations for government measures to support the sector.

“The government appreciates the circumstances,” said Rod Thomas, head of mineral exploration industry group the Prospectors and Developers Association of Canada, whose group has been calling for an expanded junior mining tax credit, investment in northern infrastructure and relaxed rules for raising capital.

Rob McEwen Interview: “This is Hurting Junior Miners More than the Gold Price” – by Angela Harmantas (Small Cap Power.com – July 28, 2015)

August 4, 2015

http://www.smallcappower.com/

Mining executive Rob McEwen spoke with SmallCapPower correspondent Angela Harmantas recently, with the former Goldcorp CEO talking about his company McEwen Mining bouncing back from a robbery, explaining how junior gold miners can remain profitable in this environment and what is driving his belief that the gold price will bounce back in a big way.

Rob McEwen is one of the more vocal members of a diminishing minority of gold bugs. He certainly has the experience to back his claim that gold will hit US$5000 an ounce in the not-too-distant future: over his 25-year mining career, he grew Goldcorp into a multi-billion dollar company that ranks as one of the world’s largest producers of precious metals. Today, as the Chairman and Chief Owner of McEwen Mining (TSX: MUX), he is hoping to achieve the rarified status of becoming one of only two gold companies on the S&P 500 (the other being Newmont Mining).

There have been a few setbacks for McEwen Mining this year, however. In April, a brazen robbery occurred at the company’s flagship El Gallo 1 mine in Mexico, a loss of nearly $8.4 million in revenue. And the beating that gold stocks are taking in the market thanks to a depressed gold price has caused MUX shares to fall to levels that threaten its inclusion on the NYSE. In addition to these insular challenges, the entire gold industry is struggling to maintain a positive outlook as gold plummeted recently to less than US$1100 after China dumped nearly 5 tons of bullion and Morgan Stanley analysts predicted gold could soon hit $800.

Rio wants exploration collaboration to discover next big seam – by Tess Ingram (Sydney Morning Post – August 3, 2015)

August 4, 2015

http://www.smh.com.au/

Well-known West Australian explorer Mark Bennett has queried whether a plan by Rio Tinto to reinvigorate exploration in Australia through partnerships with junior mining companies will work as intended.

Rio has used its first presentation at the Diggers and Dealers conference in eight years to call for collaboration in exploration in order to find the next major mineral discovery in Australia.

The country’s miners are relying on deposits discovered at shallow depths more than 30 years ago and are struggling to discover further large, tier-one deposits at depth.

The current cost and risk of deeper exploration has meant many miners have abandoned exploration efforts altogether, opting for more bankable exploration around existing deposits (known as brownfields exploration) or in other countries, where resources remain shallow.

Speaking on the first day of the annual conference in Kalgoorlie, Rio Tinto exploration director Australasia Ian Ledlie extended an invitation to junior companies to use the global major’s mineral analysis technology to help prove up discoveries.

Exploration option agreements need to be specific – by Julius Melnitzer (National Post -July 29, 2015)

July 29, 2015

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

Exploration option agreements negotiated by sophisticated parties mean what they say and nothing more, says the British Columbia Court of Appeal in a recent decision called American Creek Resources Ltd. v. Teuton Resources Corp.

That might sound simple — perhaps even obvious — But the American Creek decision has major implications for the way parties set up option agreements, a common way to fund exploration in the Canadian mining industry.

“The American Creek decision will definitely change industry practice for drafting the exploration agreements that are the lifeblood of the industry,” says Josh Lewis of Fasken Martineau DuMoulin LLP in Vancouver.

Typically, the company holding the property grants another company the option to earn an interest in the property by exploring it. The agreement usually prescribes the amount of the expenditures that must be made, but the description of those expenditures can vary from deal to deal.