Twitter

Saskatchewan Mining

NDP wouldn’t reverse historic uranium mine decision, Mulcair says – Rod Nickel (Reuters/Globe and Mail – September 10, 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.

WINNIPEG, Manitoba — Reuters – The New Democratic Party views Canada’s uranium as a “strategic asset,” and would not reverse a rare government decision to allow foreign ownership of a proposed mine, leader Thomas Mulcair said on Thursday.

The uranium industry is unpopular in Quebec, the NDP’s stronghold heading into next month’s election. But it is a key part of the economy in Saskatchewan, where the party hopes to add support.

The governing Conservatives in June made an exception to the country’s longstanding policy requiring uranium mines to be majority-owned by Canadian companies, and approved an application by Australia’s Paladin Energy Ltd.

If the left-wing NDP forms government after the Oct. 19 election, it would not change that decision, Mulcair said during a Winnipeg campaign stop.

Read more

Fission’s uranium price – by Kip Keen (Mineweb.com – 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.

Read more

K+S says it’s open to Potash Corp. takeover, despite its rejection of U$8.6-billion bid – by Peter Koven (National Post – August 14, 2015)

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

The chief financial officer of K+S AG said his firm is not opposed in principle to a merger with Potash Corp. of Saskatchewan Inc., despite its total rejection of the US$8.6-billion takeover proposal.

“Don’t get me wrong: We aren’t at all blocking a potential transaction,” chief financial officer Burkhard Lohr said on an earnings conference call on Thursday.

Potash Corp. is offering 41 euros a share, and K+S says that this is far too low. But the German firm also claims a takeover could be bad for its home country, as Potash Corp. could shutter domestic production.

If German politicians end up supporting that argument, Potash Corp.’s proposal may get effectively blocked. While there is no known mechanism for the government to block the bid, it would be difficult to do such a big transaction without at least some political support.

K+S argues that it is only logical for Potash Corp. to close its European mines. The potash market is oversupplied, and Potash Corp.’s Saskatchewan output is lower-cost than what K+S has in Europe.

Read more

Nuclear Revival Sparks Cameco Rally as Uranium Demand Is Growing – by Christopher Donville (Bloomberg News – August 13, 2015)

http://www.bloomberg.com/

Cameco Corp., the world’s second-largest producer of uranium, is emerging as a rare bright spot among Canada’s largest mining companies on signs nuclear power is shaking off its post-Fukushima slump.

Shares of Cameco have climbed 12 percent in Toronto in the past month. By comparison, Teck Resources Ltd., the world’s second-largest exporter of seaborne metallurgical coal, fell 16 percent and Barrick Gold Corp., No. 1 for bullion production, slid 18 percent.

A U.S. plan to cut carbon emissions from power plants may support new reactors and the restart of a Kyushu Electric Power Co. plant this week is highlighting a drive to get more atomic stations online in Japan. The improved prospect for uranium, the raw material in reactor fuel, is in contrast to slowing demand and ample supply for metals such as aluminum and zinc, which sent the Bloomberg World Mining Index to a six-year low in July.

“What we’re seeing is the U.S. and Japan really renewing their commitment to nuclear power,” Rob Chang, a Toronto-based analyst at Cantor Fitzgerald LP, said Aug. 11 in a phone interview. “You’ve also got India and China pushing ahead with their nuclear expansion.”

Read more

K+S says will look at higher Potash bid, profit jumps – by Andreas Cremer (Reuters Canada – August 13, 2015)

http://ca.reuters.com/

BERLIN (Reuters) – Germany’s K+S AG SDFGn.DE said it would consider any improved offer from Canada’s Potash Corp of Saskatchewan POT.TO after its position was boosted by stronger than expected quarterly earnings.

The company affirmed its rejection of a 7.9 billion euro ($8.8 billion) takeover proposal by Potash, but left the door open on Thursday to an improved bid.

“K+S will deliver strong results as a stand-alone company,” finance chief Burkhard Lohr said during an earnings call. “K+S has a great future as an independent company.”

The Canadian firm’s takeover proposal of 41 euros per share does not even remotely reflect K+S’s underlying value, the CFO said, questioning again reassurances the Canadian firm has given on jobs and sites.

K+S’s management and supervisory boards “are extremely concerned that Potash appears to have no sustained interest in continuing the strategically, technically and financially linked fertilizer and salt activities in the current form,” it said.

Read more

UPDATE 1-K+S says private shareholders back rejection of Potash offer (Reuters U.S. – August 10, 2015)

http://www.reuters.com/

FRANKFURT, Aug 10 (Reuters) – German salt and fertilizer company K+S AG has claimed support from private or retail investors for its rejection of a 7.9 billion euros ($8.6 billion) offer from Potash Corp of Saskatchewan.

K+S said on Monday it had surveyed private or non-institutional shareholders, who hold about 30 percent of its shares, and said more than 84 percent who replied were in favour of rejection, though it also said only about 28 percent had responded to its questionnaire.

Potash Corp has been pushing to talk with K+S management despite the German company’s initial rejection last month of the Canadian company’s bid worth 41 euros per share.

K+S, whose shares traded up 0.8 percent at 37.43 euros by 1130 GMT, lacks the protection of a big anchor investor, with nearly all its shares freely traded on the stock exchange, and the results of K+S’s survey provide the first real indication of how investors may respond to Potash Corp’s approach.

Only about 4 percent of the more than 39,000 private shareholders who participated in the survey said they would accept a 41 euros per share offer, K+S said.

Read more

People around Earl Grey, Sask., discuss proposed potash mine (CBC News Saskatchewan – July 23, 2015)

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

Public meeting held in Earl Grey

People from around Earl Grey, Sask., took part in a public meeting Thursday to discuss a proposed Chinese-owned potash mine in the area.

Yancoal Canada, which operates coal mines in China and Australia, is proposing a potash mine with an annual output of 2.8 million tonnes near the communities of Earl Grey, Southey and Strasbourg.

Prior to the meeting, local resident Cathi Beckel said she has concerns about the project, noting there are too many risks — including water security issues and a boom and bust job situation — with too few benefits.

“I’m concerned about our environment. I’m concerned about our farmers. I’m concerned about our communities,” Beckel said. “These big industries come in and they really change communities.”

Representatives from Yancoal, and provincial officials from the ministries of the economy and the environment were at the meeting to make presentations on the proposal. There was also a question and answer session.

Read more

UPDATE 1-K+S rejects Potash Corp’s new attempt at takeover talks – by Patricia Weiss (Reuters U.S. – July 21, 2015)

http://www.reuters.com/

FRANKFURT, July 21 (Reuters) – Salt and fertilizer group K+S has rejected a new attempt by Canada’s Potash Corp to entice the German company into takeover talks, a K+S spokesman said on Tuesday.

K+S earlier this month rebuffed Potash Corp’s 7.9 billion euros ($8.65 billion) proposed bid of 41 euros per share as too low and suggested the suitor was planning to shrink the company.

A K+S spokesman said Potash Corp Chief Executive Jochen Tilk had met the state premier of the German regional state of Hesse – where K+S is headquartered – and had handed over documents about Potash Corp’s plans to preserve jobs after a takeover. K+S was also given the documents.

“We’ve looked into these statements and concluded that they contain nothing substantial beyond what we had already been given in writing. That’s why we still see no basis for talks,” the spokesman said.

Read more

Officials say mining sector in Saskatchewan being affected by wildfires – by Kurtis Doering (The Prince George Citizen – July 15, 2015)

http://www.princegeorgecitizen.com/

CKOM/The Canadian Press – SASKATOON – As hundreds of wildfires tear through northern Saskatchewan, the province’s mining sector is being affected in more ways than one.

Claude Resources had to suspend operations at its Seabee gold mine as one of the over 100 fires came within eight kilometres of the site. Most of the roughly 355 employees were removed, with some essential personnel remaining behind.

Mining giants Cameco and Areva have had to stop shipping uranium from their northern operations as highways and airstrips are periodically closed by smoke and flame.

“It’s a bit of a juggling act, but we’re managing to get through it,” said Cameco spokesman Gord Struthers.

Though fire has not directly threatened Cameco’s mines, northern residents make up roughly half of the company’s workforce. Struthers said they have tried to remain flexible in the face of widespread evacuations.

Read more

Employee concerns main hurdle in Potash Corp. takeover of K+S – by Rachelle Younglai (Globe and Mail – July 13, 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.

In Potash Corp. of Saskatchewan Inc.’s quest to buy K+S AG, one of its biggest hurdles may lie in the German company’s corporate structure.

K+S has two boards of directors, one comprised of executives and another of employee representatives and shareholders.

The employee-shareholder group, known as the supervisory board, has enormous influence over the company with the power to hire and fire executives.

Unlike most takeovers, where a high enough bid will succeed, the buyer must also deal with the supervisory board, which takes into account the employees.

“The representative of the employees represent different interests,” said Martin Imhof, a partner at law firm Heuking Kuhn Luer Wojtek, who specializes in cross-border mergers and acquisitions in Germany.

Read more

K+S investors see Potash Corp deal within reach despite rebu – by Andreas Kröner and Ludwig Burger (Reuters Canada – July 9, 2015)

http://ca.reuters.com/

FRANKFURT (Reuters) – Shareholders in takeover target K+S say a deal could be done because suitor Potash Corp’s main aim is to get control over its German rival’s ambitious Canadian project and scale it back.

K+S’s “Legacy” mine in the prairies in western Canada would be the first built from scratch in the global potash industry in almost 40 years. It would add to an already oversupplied market where demand is suffering from weak emerging market currencies and low crop prices.

Potash Corp could more easily ration global supply by controlling K+S, but still commit to leaving its German operations largely intact. The potential threat to K+S’s domestic operations were seen as one reason why German regulators might block a deal.

K+S last week rebuffed Potash Corp’s 7.9 billion euro ($8.6 billion) proposed bid of 41 euros per share as too low and suggested the suitor was planning to shrink the company.

Potash is in demand as a mineral because it plays a vital role in plant growth and crop resistance to cold and drought.

Read more

Northern economy feeling the effects of Saskatchewan wildfires – by Doug Lett (Global News – July 8, 2015)

http://globalnews.ca/

SASKATOON – While a lot of attention has been focused on the battle against raging wildfires in northern Saskatchewan, it’s not the only challenge. The northern economy is also taking a hit.

Thousands of jobs in the north depend on mining or tourism.

“It’s disruptive at the very least,” said Neil McMillan, who is president of the Saskatchewan Mining Association.

“All of the mines and mills in the north are still operating, but it’s tenuous, for a number of reasons,” said McMillan, who for many years ran Claude Resources, which operates the Seabee gold mine in northern Saskatchewan.

He said the challenges include getting enough supplies to keep the mines and mills going.

“The transportation of necessary goods – diesel fuel, propane, and other things used in the mining and milling operations – there’s been lots of times they’ve been disrupted,” said McMillan. “I know they’ve done a couple of convoys of supplies to keep the operations running.”

Read more

[Saskatchewan] A uranium mid-cap – by Kip Keen (Mineweb.com – July 8, 2015)

http://www.mineweb.com/

Denison, Fission argue a merger of equals means a unique position as uranium mid-cap.

Fission Uranium and Denison Mines announced a merger of equals Monday that, if consummated, combines a few, key high-grade assets in a premier uranium mining region of the world in terms of grade. In selling the marriage of two key uranium juniors focused on the Athabasca Basin, the sales pitch was largely focused on the benefit of being a bigger company in a sour mining market.

Fission has emerged in recent years with an important uranium discovery, called Triple R, and first resource that catapulted its prospects as a uranium developer. It has gone from a virtual unknown, chasing a U3O8-mineralized boulder train, to one of the relatively rare junior explorers with a market capitalization counted in the hundreds of millions (~C$400m).

That has helped it catch up to and near equal Denison, a Lundin Group company that has a more established position in the Athabasca Basin. Denison’s assets include another, deeper, but uber grade uranium deposit (60% Wheeler project) and a 22.5% stake in a sizeable uranium toll mill operated by Areva, which processes ore from Cameco’s Cigar Lake mine.

Read more

Potash Corp. confident of K+S bid, could raise if more value seen – by Pachelle Younglai (Globe and Mail – July 8, 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.

Potash Corp. of Saskatchewan Inc. is confident K+S AG shareholders would accept its $8.7-billion (U.S.) bid, but is open to raising the offer if its German rival could reveal more value not currently seen by the Canadian company, according to a source close to the deal.

K+S has rejected Potash Corp.’s offer of €41 ($45 U.S.) a share, saying it is too low and grossly undervalues its Legacy potash project in Saskatchewan. K+S has said it believes Legacy alone is worth €21 a share, which has led some analysts to speculate that K+S is looking for an offer of about €50 a share.

The source characterized that amount as inconceivable and said there was no chance that such an offer would materialize given the average takeover premium in Germany is 32 per cent and Potash Corp. is offering a 57-per-cent premium to K+S’s share price over the past year.

Read more

NEWS RELEASE: Denison and Fission Announce Transaction to Create Leading Diversified Uranium Company

TORONTO, ONTARIO–(Marketwired – July 6, 2015) – Denison Mines Corp. (TSX:DML)(NYSE MKT:DNN) (“Denison”) and Fission Uranium Corp. (TSX:FCU)(OTCQX:FCUUF)(FRANKFURT:2FU) (“Fission”) are pleased to announce the execution of a Binding Letter Agreement (the “Binding Agreement”) to combine their respective businesses (the “Transaction”). The Transaction creates a leading Canadian focused diversified uranium company – combining high quality assets and the management teams of two highly respected companies. Headlining the asset portfolio of the combined company will be two world class uranium exploration and development projects: Fission’s 100% owned Patterson Lake South Project, and Denison’s 60% owned Wheeler River Project, both located in the prolific Athabasca Basin, in Northern Saskatchewan, Canada.

Subject to the terms set out in the Binding Agreement, Fission common shareholders will receive 1.26 common shares of Denison for each common share of Fission held plus $0.0001 per share in cash. Upon completion of the Transaction, the combined company, to be named “Denison Energy Corp.”, will be approximately 50% owned by each of Denison’s and Fission’s existing shareholders on a fully-diluted in-the-money basis.

The market capitalization of Denison and Fission on a combined basis is anticipated to be approximately CAD$900 million. Based on the 30 day volume weighted average price of Denison’s shares on the TSX of CAD$0.99 as at July 3, 2015, the offer implies a price per Fission common share of CAD$1.25 and represents a premium of approximately 18% to the 30 day volume weighted average price of Fission’s shares on the TSX of CAD$1.06 as at July 3, 2015.

Read more