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NEWS RELEASE: Royal Nickel Announces $15 Million Royalty Financing from Leading Global Mining Investor

(All amounts expressed in U.S. dollars unless otherwise indicated)

TORONTO, May 9, 2013 /CNW/ – Royal Nickel Corporation (“RNC”) (TSX: RNX) is pleased to announce that it has signed a royalty purchase agreement with RK Mine Finance (“Red Kite”). Under the terms of the agreement, Red Kite will acquire a 1% Net Smelter Return (“NSR”) Royalty in the Dumont Nickel Project for a purchase price of $15 million.

“This commitment by Red Kite is a significant endorsement of the Dumont project by a recognized global mine finance firm. This royalty sale provides an attractive form of financing, particularly in current capital market conditions. The additional capital will allow us to continue to aggressively advance the project once the feasibility study is completed by mid-year. We look forward to working further with Red Kite as we advance the project,” said Tyler Mitchelson, President and CEO of RNC.

Pursuant to the agreement between RNC and Red Kite, on closing RNC will receive $15 million and Red Kite will be entitled to receive 1% of the net smelter return from the sale of minerals produced from the Dumont Nickel Project. Closing is expected to occur on May 10, 2013.

RNC’s Dumont project contains the third largest nickel reserve in the world1 and is expected to be among the largest 5 nickel sulphide operations in the world. RNC is on track to release the results of a feasibility study for the Dumont project by mid-2013 and the permitting process is well underway with necessary permits expected to be received by the second quarter of 2014.

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Australia billionaire spends big on nickel even as glut worries persist – by James Regan (Reuters U.S. – May 3, 2013)

http://www.reuters.com/

Billionaire Clive Palmer earmarks $1 bln to upgrade nickel refinery

SYDNEY, May 3 (Reuters) – Australian mining magnate Clive Palmer is joining Vale, Xstrata and other sector heavyweights pouring money into nickel despite a dire near-term outlook for demand, as they plough on with projects bought on the cheap or as part of corporate takeovers.

Hopeful that appetite will pick up as the global economy improves, they are reluctant to shed assets after investing billions. But that risks deepening a supply glut in the short term and piling more pressure on nickel prices, which have fallen around 13 percent so far this year and were the worst performer on the London Metal Exchange in 2012.

Palmer, a self-described eccentric who is building a replica of the Titanic, plans to spend a hefty $1 billion this year upgrading an ageing nickel refinery in Australia, battling to reduce production costs through steps such as revamping equipment and waste disposal operations.

“The $1 billion … will help make the refinery more efficient in a time of low nickel prices,” said Andrew Crook, a business adviser to Palmer. He declined to give details on operating costs as the Yabulu plant is privately owned. Xstrata Plc, Vale SA, First Quantum Minerals Ltd, China Metallurgical Corp, Sherritt International and Sumitomo Corp are among companies spending heavily to build new nickel mines and processing plants.

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Anorthosite: What It Is and Why You Should Care [Global Nickel/Copper Uses] – by Sally Lowder (The Metals Report – April 23, 2012)

http://www.streetwisereports.com/

Copper and nickel are two metals modern society cannot get enough of, but there is not enough to go around, says Rick Mills, publisher of Ahead of the Herd. Add in mounting production costs and you have a supply-and-demand disaster in the making. But when it comes to making fiberglass and aluminum, Mills says in this interview with The Metals Report that he sees a revolution in the making, and its name is anorthosite.

The Metals Report: Rick, you have concerns about supply problems for many industrial metals. Let’s start with the importance of copper and nickel to global growth.

Rick Mills: Modern society would grind to a halt without copper and nickel. Nickel has more than 100,000 applications. Copper is everywhere as well. But growing structural imbalances in the supply-and-demand equation do not bode well for future resource extraction. Mining is extremely capital intensive. The initial capital expense (capex) of building and developing a mine is high.

Company-built infrastructure assets—roads, railways, bridges, power generating stations, seaports—are often needed to extract and transport the ore and concentrate. Second, the operating expenses (opex)—rubber tires, wages, fuel, camp costs—are not stable; they keep going up.

TMR: Production costs have been high for a while. Why are you so concerned now?

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Nickel prices a huge challenge: Vale VP – Staff (Sudbury Northern Life – April 16, 2013)

http://www.northernlife.ca/

Strong says $7 nickel today equals $2.50 a decade ago

Current nickel prices of a little more than $7 a pound are comparable to $2.50 a pound a decade ago, creating huge challenges for Sudbury’s largest nickel miner.

Kelly Strong, Vale’s vice-president of Ontario and UK operations, made the comparison Tuesday at a packed luncheon at the Howard Johnson in Sudbury, hosted by the Greater Sudbury Chamber of Commerce.

Strong said several factors have substantially increased mining costs, including oil prices that have increased by 350 per cent, and the Canadian dollar, which has increased in value by 60 per cent compared to the U.S. dollar.

“Today’s prices are actually as low as historical recessionary prices,” Strong said. “And those of us who lived through those price cycles know how challenging they were.”

He also paid tribute to three miners who were killed on the job at Vale – Jordan Fram, Jason Chenier and Stephen Perry. Strong said the company has gone through a dark period and has put a renewed emphasis on safety.

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Norilsk takes another hit in WA – by Nick Evans (The West Australian – April 15, 2013)

http://au.news.yahoo.com/thewest/business/

Russian mining giant Norilsk Nickel has taken another hit to its Australian assets, announcing further writedowns as it prepares to close its remaining WA mine.

According to an abbreviated set of 2012 financial accounts released by Norilsk late on Friday, the world’s biggest nickel producer has written down the value of its Australian and Botswana mining assets by $US278 million ($264.7 million). The company did not apportion the writedowns.

It spent $7 billion expanding in WA nickel at the height of the mining boom in 2007 and is understood to have now written off the vast bulk of the assets it acquired.

The carrying value of its non-current assets in Australia was put at $US511 million at the end of 2011. That figure is understood to have fallen to about $US350 million by the end of last year.

Media reports in Botswana indicate Norilsk may also be preparing to close its nickel mines there, after senior management decided to mothball its Lake Johnston project, north-east of Kalgoorlie, late last month.

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Vale faces ‘new world’ – by Carol Mulligan (Sudbury Star – April 15, 2013)

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

Vale is no longer aiming to be the largest mining company in the world, says the man in charge of its Sudbury operations.

It’s looking instead to generate more value from the business it has, focusing on its core assets and ensuring they generate the capital necessary to rein-vest in operations.

Kelly Strong, a mining engineer who has worked at Vale operations in Ontario since 2001 except for a three-year stint in Indonesia, was named the company’s vice-president of Ontario and U.K. operations last November.

Strong hasn’t spoken much publicly since then, but spoke of some of his priorities in an editorial board meeting with The Sudbury Star last week. That meeting was conducted underground at the 7,400-foot refuge station at Creighton Mine, where a $247- million expansion program is underway.

The timing of Brazil-based Vale purchasing the former Inco in 2006 was good, said Strong, given Inco didn’t have the “kind of money” to invest in aging infrastructure. The operations were at the “critical stage where we had to start investing back in the business” or it would have had significant challenges.

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Sudbury Mining a bright future – by Carol Muligan (Sudbury Star – April 13, 2013)

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

Editor’s Note: Sudbury Star managing editor Brian MacLeod, photographer John Lappa and reporter Carol Mulligan spent Thursday at Vale’s Creighton Mine, at the invitation of Kelly Strong, Vale’s vicepresident of Ontario and UK operations. Look for news coverage of our conversation with Strong next week in The Star.

Of the 330 people who work at Vale’s Creighton Mine, Pat Shell says he has the best job.

A production miner described by his supervisors as a proud hockey dad and “bolter extraordinaire,” Shell turns off the piece of machinery he’s operating at Creighton’s 7,910-foot level mid-morning Thursday. He’s been installing ground control supports to make the area safe for people to work.

Shell explains what he’s doing to three journalists touring the mine, led by Vale vicepresident of Ontario and UK Operations Kelly Strong and other Creighton managers.

The mine has come a long way from the open-pit operation it began as in 1901, evolving into one of the most storied, well researched, highly regarded and, no doubt, profitable nickel mines in Canada, if not the world.

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Trip underground brings reporter closer to father – by Carol Mulligan (Sudbury Star – April 13, 2013)

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

What seemed like a good idea was questionable Wednesday at 2:30 a.m. mid-panic attack.

It started weeks back with a request to Vale’s Angie Robson for an interview with Kelly Strong after he was appointed vice-president of Vale’s Ontario and U.K. operations.

It ended Thursday with The Star’s managing editor Brian MacLeod, photographer John Lappa and I going 1.5 miles underground.

Strong suggested we do the interview underground and we settled on Creighton Mine after I mentioned my father had worked there decades ago.

I was looking forward to it until Robson sent me a fact sheet about Creighton two days before our visit and it registered that Creighton Mine is as deep as 4.5 CN Towers stacked up. Gulp.

My father, Ernie Mulligan, worked there for at least a dozen years before he died in 1963. As a girl, I pestered my dad to go to work with him. At age nine, I was wounded when my boy cousin could accompany his electrician father to work in a residence, when I couldn’t see where my dad worked.

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NEWS RELEASE: Koniambo Nickel produces first nickel metal; on track to achieve full production rate by the end of 2014 Koné, 11 April 2013

Xstrata Nickel’s Koniambo Nickel project has gone into production with first metal tapped this week.

Production marks a key milestone for this complex $5 billion greenfield project in New Caledonia, which has been under construction for the past six years and has been a flagship component of Xstrata’s organic growth programme. At the height of its construction more than 6,000 people were employed in building the project and its associated infrastructure.

First metal production signals the start of Koniambo Nickel as a multi-decade, tier one asset with long-term cash costs at the bottom of the second quartile. At peak production the mine will further cement New Caledonia’s position as one of the most important nickel producers in the world and provide steady employment for approximately 800 workers, with a focus on local employment, and indirect employment for thousands of others.

Ian Pearce, Chief Executive of Xstrata Nickel, said: “All components of the mining and smelting process have now been successfully tested, leading to production of metal from Line 1. The production of first nickel metal at Koniambo after six years of complex design and construction is a huge achievement and a source of great pride for all of our employees. We are on track to deliver the full production rate of 60,000 tonnes per annum by the end of 2014 as scheduled, while maintaining excellence in terms of environmental and safety performance at this world-class industrial complex.”

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Swiss firm to invest $80M in PolyMet’s Iron Range mine – by Dee Depass (Minneapolis-Saint Paul Star Tribune – April 10, 2013)

http://www.startribune.com/

PolyMet Mining’s long-awaited plans for a copper-nickel mine in Minnesota’s Iron Range received welcome news Wednesday when a Swiss-based commodity trading and mining firm pledged to invest $20 million and help raise another $60 million in new equity financing.

The involvement from Glencore AG, which includes $20 million in bridge loans and up to $60 million in new equity, is expected to be finalized in June, pending regulatory approvals in the United States and Canada.

The investment will allow PolyMet to complete the lengthy environmental review and permitting process that has already been six years in the making at a cost of $50 million to date. Environmental permits and state regulatory approvals are required before mill work and mine construction can begin.

“So this is a pretty exciting day for us,” said PolyMet CEO Jon Cherry. Glencore’s financing arrangement will involve the issuance of new stock to existing and new shareholders through a secondary offering process known as “a summary of rights offering.” It is not yet known how many PolyMet shares Glencore will ultimately own, but it will not exceed 49.99 percent.

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First Nickel nears target – by Carol Mulligan (Sudbury Star – April 11, 2013)

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

The president and chief executive officer of First Nickel won’t come right out and say Lockerby Mine is in full production, but Thomas Boehlert strongly hints at it. The mine formerly owned by Falconbridge reached 60% production in 2012, costing about $37 million to operate with $36 million in revenues.

In public guidance released in the first week of April, the company said it expected to have reached full production in the first three months of 2013 — after that time period had already passed.

“We have no reason to change that expectation,” Boehlert said Wednesday in an interview with The Star. In public guidance issued at the start of this year and last week, the company said it expected to “be there,” in full production, mining 10 million pounds of nickel a year, by the end of March.

“We have no reason to change that expectation,” Boehlert repeated. “So, you can interpret that as you like.” The junior miner has been on a roller-coaster since it purchased Lockerby in 2004, operating it until the 2008 economic meltdown and the collapse of metals prices forced layoffs and essentially closed the operation.

This year will still be a challenging one, said Boehlert, but the junior miner’s future is looking bright.

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FEATURE-Profit eludes accident-prone Finnish nickel mine – by Terhi Kinnunen (Reuters U.S. – April 10, 2013)

http://www.reuters.com/

SOTKAMO, Finland, April 10 (Reuters) – Talvivaara CEO Pekka Pera still has the one euro coin he used to buy the rights to ore deposits at the company’s nickel mine in Sotkamo, eastern Finland, a decade ago.

While the previous owner saw no future for the site, Pera was so sure it would succeed with the help of a pioneering metals extraction process called bioheapleaching that he bought the coin back as a keepsake.

But after waste water leaked last year, pushing up uranium levels in nearby lakes and rivers, and repeated failures to meet production targets, the mine is now saddled with debt and burning through cash. Investors are uncertain whether they will ever see a profit from what is supposed to become Europe’s biggest nickel mine.

A new leak from its waste pond last Sunday was the latest in a series of troubles which analysts say show the company has overestimated the benefits of the rarely-used bioheapleaching method, and underestimated its risks.

“During the last three to four years, there have been so many problems and they haven’t had success in ramping up production,” said Pohjola analyst Jari Raisanen. “I think nobody really knows what the future is.”

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Excerpt from “The History of Mining: The events, technology and people involved in the industry that forged the modern world” – by Michael Coulson

To order a copy of The History of Mining, please click here: http://www.harriman-house.com/products/books/23161/business/Michael-Coulson/The-History-of-Mining/

THE RISE OF THE GULAGS AND NORILSK

The Soviet years of central control and direction saw a major push to develop the vast country into an economic powerhouse to match the West. These were the Stalin years and the expansion of the mining industry was often achieved by the use of labour transported to the Gulags of the eastern USSR. In these transportations dissident professional and manual workers alike were settled in camps, often for decades, until the death of Stalin in 1953 led to most of them being closed by 1960.

The Gulags had a number of key political functions, but economically they played an important role in the establishment of heavy industrial complexes for steel, manufacturing and mining, including mining of coal, iron ore and base metals. Gold production was also an important activity given that the rouble was unconvertible and the USSR was not a major manufacturing exporter like Germany or the UK, but was from time to time a heavy importer of food stuffs and advanced machinery, and therefore in need of convertible assets.


 

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Voisey’s Bay heading underground – Deal includes $100 million from Vale over next three years – by Ashley Fitzpatrick (St. John’s Telegram – March 30, 2013)

http://www.thetelegram.com/

Vale is taking its mining operation in Voisey’s Bay underground. Construction work for the underground mine is slated to start in 2015, with first ore expected by 2019.

The commitment to the mine extension came as part of a new deal struck between Vale Newfoundland and Labrador and the provincial government.

The deal assures the current mining at Voisey’s Bay can continue uninterrupted while the company’s new, $4.25-billion processing facility at Long Harbour is completed.

It means mining operations at Voisey’s Bay can continue until at least 2035. “It’s an important mine and extending it is important for us and the industry, generally. It’s a fabulous win-win,” said Gerry O’Connell of Mining Industry NL, who spoke with The Telegram immediately following the announcement of the deal.

“(And) with these kinds of mines, you never know. I meant they could go on for — Sudbury’s been going for 100 years,” he said.

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NEWS RELEASE: [Newfoundland and Labrador] Government Secures Commitment from Vale for Underground Mine

Executive Council
Natural Resources
March 28, 2013

A commitment to an underground mine at Voisey’s Bay is the centerpiece of amendments to the Voisey’s Bay Development Agreement announced today by the Government of Newfoundland and Labrador and Vale Newfoundland & Labrador Limited (Vale).

“The commitment secured by our government with Vale will ensure more jobs and benefits are created right here in Newfoundland and Labrador for our people,” said the Honourable Kathy Dunderdale, Premier of Newfoundland and Labrador. “The new mine will provide many hundreds of construction jobs after sanction in 2015, and even more operational employment than the current mine after first ore is achieved in 2019. This is another example of this government’s continued commitment to ensuring that Newfoundlanders and Labradorians benefit from the development of our natural resources.”

The Provincial Government extracted extra value with other improvements including enhanced industrial and employment benefits and additional revenue to the Provincial Government of approximately $100 million over three years.

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