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Saskatchewan Mining

NEWS RELEASE: Golden Band To Suspend Mining Operations at La Ronge

Saskatoon, Saskatchewan, December 9, 2013 – Golden Band Resources Inc. (“Golden Band” or the “Company”) (TSX.V-GBN; OTCQX-GBRIF) reports that its mining operations, including its operations at the Roy Lloyd and Golden Heart mines and the Jolu mill, will be suspended for an indefinite time beginning January 1, 2014.

Further to the Company’s news release dated August 7, 2013 wherein the Company announced recommencement of operations having completed certain upgrades of infrastructure; and despite restructuring operations and significant cost cutting, declining gold prices and lower than anticipated ore grades from both the Roy Lloyd underground mine and the Golden Heart surface mine have hindered the Company’s ability to return to profitability. At the present time, the Company anticipates the shutdown period will be approximately 6 months although there is no assurance when mining operations may resume.

In order to preserve cash, the Company will place the operation into care and maintenance mode and mining and milling operations will be shut down in a systematic manner so that they are available for start-up in as short a time as possible. During the shutdown, the Company will be evaluating all of its options to return the mining operations to profitability. In order to improve our economic performance, the Company intends to engage external consultants with the necessary expertise to develop more effective mining plans. Engineering plans will focus on priority targets, specifically Decade, Komis, Golden Heart and Greywacke.

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[Saskatchewan Premier] Wall plays politics with potash – by Bruce Johnstone (Regina Leader-Post – December 7, 2013)

http://www.leaderpost.com/index.html

So what are we to make of the latest war of words between Premier Brad Wall and Potash Corp. of Saskatchewan? Is PotashCorp CEO Bill Doyle seriously saying that dividends to shareholders are more important than the jobs of more than 1,000 workers, including 440 in Saskatchewan?

Is the premier seriously suggesting that companies, especially Saskatchewan headquartered ones, don’t have the right to manage their business as they see fit? Clearly, Wall is casting himself as the knight in shining armour coming to the rescue of the hundreds of Saskatchewan potash miners given layoff notices this week.

First, Wall expressed concern for the workers facing layoffs just weeks before Christmas, adding that “obviously this is not good news for those employees and their families.” Then he allayed fears of major damage to the Saskatchewan economy or the provincial treasury, noting that potash revenues account for just 3.5 per cent of total government revenues.

For his part, Doyle said that he was equally concerned about the workers, promising to do “everything we can to make sure that these people are well taken care of.” But Doyle also said that PotashCorp’s dividend was “sacrosanct” and won’t be touched.

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Miners’ job hunt major feat – by Janet French (Regina Leader Post – December 7, 2013)

http://www.leaderpost.com/index.html

PotashCorp job cuts a challenge for mine workers

Since high school, Daren Nakoneshny had a plan. The Lanigan native wanted to study a trade, then come home to work in Potash Corp. of Saskatchewan Inc.’s Lanigan mine. His family is there. The benefits and wages were unmatched.

“I achieved my long-term dream to work at PCS, and it was short-lived,” Nakoneshny, 25, said Friday. “It seemed like a pretty good idea at the time.” The electrician bought a house in Lanigan last year, where he lives with wife Caitlin and two young children.

On his Monday night shift, after nearly two years at the company, Nakoneshny knew something was up when he and his colleagues were ordered to a meeting at 6:30 a.m. Tuesday. Rumours swirled.

Nakoneshny called Caitlin several times that night, asking her to look online for potential bad news.

At 6:30 a.m., he and 300 of his colleagues stood in a room at PCS Lanigan, watching a video broadcast of PotashCorp CEO Bill Doyle explaining why many of their jobs were about to evaporate.

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Potash advantage illusory – Editorial (Winnipeg Free Press – December 5, 2013)

http://www.winnipegfreepress.com/

Potash Corp. will lay off 1,045 employees, 18 per cent of its workforce, because of low prices and poor sales of the crop nutrient it produces, the company announced this week. The decision marks a sharp setback for the Saskatchewan government’s attempt to maintain cartel pricing in the potash market by preventing an Australian mining giant from buying the Saskatoon-based company and making it compete in an open market. A well-organized open market would serve Canada better.

Saskatchewan Premier Brad Wall put the bravest face he could on the failure of his policy. The province is enjoying good employment growth despite declines in the resource sector, he said after the massive layoff was announced. That seemed odd, because just three years ago, when BHP Billiton was trying to buy Potash Corp., he was telling the country the company was strategically important to Saskatchewan and could not be allowed to fall into foreign hands. Now, suddenly, Saskatchewan doesn’t need it so much after all.

In October 2010, when Billiton was offering $130 a share for all the outstanding shares of Potash Corp., Premier Wall told the Saskatchewan public it was a bad deal for the province. Billiton was going to take the Saskatchewan company out of the Canpotex producers’ cartel and compete for sales. This would not work and the Saskatchewan industry would suffer, Mr. Wall believed. He urged Prime Minister Stephen Harper and the ruling Conservatives to block the takeover.

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PotashCorp defends job cuts in face criticism from Wall – by Jennifer Graham (The Canadian Press/CTV News – December 6, 2013)

http://saskatoon.ctvnews.ca/

Premier Brad Wall has sent a letter to Potash Corp. of Saskatchewan executives blasting them for cutting jobs while preserving the dividend paid to shareholders.

The Saskatoon-based company said Tuesday that it is laying off 1,045 people to reduce its workforce by about 18 per cent, with the biggest hits in its home province of Saskatchewan.

Wall is upset because PotashCorp CEO Bill Doyle said the fertilizer company’s dividend is “sacrosanct” and won’t be touched.

“This can only mean that the interests of shareholders were protected while the interests of employees here in Saskatchewan and elsewhere were sacrificed,” Wall wrote in the letter dated Dec. 4.

About 440 people will lose their jobs in Saskatchewan. Most of those positions are at PotashCorp’s Lanigan division, where one of two mills is to suspend production by the end of the year, and at its Cory division where production will be reduced. Cuts will also be made at the Saskatoon headquarters.

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Potash Corp. cuts shock Saskatchewan community as hundreds lose jobs – by Jennifer Graham (The Canadian Press – December 4, 2013)

http://ca.news.yahoo.com/

REGINA – There was shock Tuesday in a small town east of Saskatoon after Potash Corp. of Saskatchewan (TSX:POT) cut hundreds of jobs at a mill.

The Saskatoon-based company is slashing its workforce by about 18 per cent, affecting 1,045 people.

The biggest job cuts will be in Saskatchewan, where 440 people will lose their jobs, and most of those will be at the company’s Lanigan division, where one of two mills will suspend production by the end of the year.

“These layoffs were effective immediately. People were sent home this morning,” said Rick Suchy, an electrician at the Lanigan mine and president of Unifor local 922.

“This was the end of their shift. Some guys were supposed to come back tonight. They won’t be coming back tonight. Some guys were phoned at home. They weren’t there. And many people were coming in for the day shift and they were sent home. “It was a really shocking experience.”

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Mining firms to spend $297M in ’13 (Regina Leader-Post – December 4, 2013)

http://www.leaderpost.com/index.html

Mining exploration and development companies are expected to spend about $297 million in Saskatchewan in 2013, down from $324 million in 2012, according to preliminary estimates released by the Saskatchewan Geological Survey.

This year’s expenditure estimate “reflects the difficulty many junior companies continue to have in raising exploration capital,” said the report, which was released at the Saskatchewan Geological Survey’s open house in Saskatoon Tuesday.

Expenditures for mineral exploration and evaluation projects in Saskatchewan in 2013 are also expected to be lower than the $293 million spent in 2011 and the $321 million in 2010.

“Despite the decrease, exploration spending in Saskatchewan continues to be well above historic levels,” the report said. “In the past decade over $2.7 billion has been spent on exploration and evaluation programs, a dramatic increase when compared to the total $674.5 million spent in the 20 years previous.”

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Timmins, Saskatchewan colleges sign agreement – by Staff (Northern Ontario Business – December 3, 2013)

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.

Northern College in Timmins and Northlands College in Saskatchewan have signed an agreement to train students through the mining engineering technician program at the Haileybury School of Mines.

The new agreement is built upon an established relationship between the two colleges. Northlands has delivered the program in the past, offering enrolment once every two years. The new agreement, which will be valid for seven years, will see six consecutive intakes of first-year students.

Earlier this year, an agreement was established with Confederation College to allow graduates of Confederation’s mining techniques program to take the second year of the mining engineering technician program at Confederation.

“The fact that Haileybury School of Mines programming is being delivered by multiple colleges in both Ontario and Saskatchewan is a testament to the quality of our mining programs,” said Fred Gibbons, president of Northern College, in a news release.

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Potash Corp. Rivals Seen Following With Cuts – by Christopher Donville (Bloomberg News – December 4, 2013)

http://www.bloomberg.com/

Potash Corp. of Saskatchewan Inc.’s decision to cut 18 percent of its workforce and reduce capacity probably foreshadows similar actions by North American rivals amid a price war in the $20 billion global potash market.

Potash Corp., the world’s largest fertilizer company by market value, said yesterday it will close a Canadian potash mine, lower output at another and halt a processing mill. Calgary-based Agrium Inc. (AGU) and Mosaic Co. of Plymouth, Minnesota, are likely to follow with job and capacity cuts, said Peter Prattas, an analyst at Cantor Fitzgerald LP, and Mark Gulley, an analyst at BGC Partners LP.

“Something has to give,” Gulley said yesterday in a telephone interview from New York. “They have to be looking at the same issues in terms of price and profit-margin pressure.”

The potash industry has been in turmoil since the end of July when Russia’s OAO Uralkali, which produced more of the crop nutrient last year than any other company, quit a sales accord with its Belarusian competitor. Uralkali’s strategy now is to raise output to gain a bigger market share. That’s spurred some customers to defer purchases in anticipation of lower prices.

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Potash Corporation of Saskatchewan layoffs don’t match rhetoric – by Murray Mandryk (Regina-Leader Post – December 4, 2013)

http://www.leaderpost.com/index.html

Mandryk is the political columnist for the Leader-Post.

Dispatching a “rapid response team” to deal with 440 Potash Corp. of Saskatchewan layoffs while telling us not to panic created a bit of a mixed-messaging mess for Premier Brad Wall on Tuesday.

However, it isn’t the first time that Wall and his Saskatchewan Party government – perhaps facing their biggest economic challenge since BHP Billiton’s attempted takeover of PotashCorp in 2010, or perhaps the potash revenue collapse of 2009 – have been confounded by the contradictions coming out of this particular company.

Nor will it likely be the last time.

This latest saga of potash politics – once again courtesy of Potash Corp – should serve as a reminder to the Sask. Party government that it needs to divorce itself from the specific interests of this company … or for that matter, all the companies that make up the industry.

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Are Potash cuts a coded message to Russians? – by Sean Silcoff (Globe and Mail – December 4, 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.

OTTAWA — There are two ways to read Potash Corp. of Saskatchewan’s announcement on Tuesday that it is cutting 1,050 jobs and tooling down some production. The first is that demand from developing markets has been soft and that the cuts are necessary to reduce costs. Falling corn prices in the U.S. have also hit potash pricing, which typically moves in tandem with the grain.

The second way to read Tuesday’s news is more interesting. The folks from Saskatchewan may be sending their Slavic rivals a message: “Pay attention to what we’ve done today. We want to end this little war we’ve been having, and so should you. Then we can return to normal, and get back to minting fat profits.”

Remember that potash is predominantly mined in two areas of the world with massive subterranean deposits – Saskatchewan and a region spread out over the former Soviet Union. The three miners in Saskatchewan – Potash Corp., Mosaic and Agrium – have sold overseas for years through their jointly owned marketing organization Canpotex while Russian producer OAO Uralkali and Belaruskali, owned by the state of Belarus, had a similar joint venture called Belarusian Potash Co. or BPC.

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NEWS RELEASE: PotashCorp Announces Operating and Workforce Changes

Saskatoon, Saskatchewan – Potash Corporation of Saskatchewan Inc. (PotashCorp) announced today that it is taking the difficult but necessary step to reduce its workforce in Canada, the United States and Trinidad by approximately 18 percent from current levels.

We expect workforce reductions by region as follows:

  • Saskatchewan – approximately 440 people
  • New Brunswick – approximately 130 people
  • Florida – approximately 350 people
  • North Carolina – approximately 85 people
  • Other US locations and Trinidad – approximately 40 people

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Potash Corp. slashes jobs; ‘We can compete,’ CEO says – by Eric Atkins (Globe and Mail – December 3, 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.

Potash Corp. of Saskatchewan Inc. is slashing its work force by 18 per cent amid low prices for its crop nutrients and weak demand in emerging markets.

The agriculture giant said Tuesday it will cut 440 jobs in Saskatchewan, 130 in New Brunswick, 350 in Florida, 85 in North Carolina, and 40 in other U.S. regions and Trinidad.

The company is also ceasing, suspending or cutting production at several operations. Potash Corp. chief executive officer Bill Doyle said the move is an attempt to match output of potash, nitrogen and phosphate with global demand, which has been flat since 2007.

A wide range of jobs – from sales to administration and production – are being eliminated, he said in an interview.

“Despite confidence in the long-term drivers of our business, a significant portion of fertilizer demand comes from developing markets where growth has been less robust than expected,” the Saskatchewan-based company said in a statement.

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Miner Cameco Trains Canadian Aboriginals to Beat Shortage – by Greg Quinn (Bloomberg News – November 27, 2013)

http://www.bloomberg.com/

Phil Morin is in demand. Mining companies are recruiting worldwide to find skilled workers like him they need to develop projects in remote parts of Canada.

The problem, Morin says, is that they’re hunting in the wrong place. They could more easily solve their shortage if they looked closer to home, hiring and training aboriginals like him, the industrial mechanic said.

Cameco Corp. hired Morin 13 years ago to drive a truck between uranium mines and mills in northern Saskatchewan. With company training, he now has certifications for industrial mechanics and electrical work. About half the company’s 3,300 workforce at its Saskatchewan sites are natives, who are also known as First Nations or Indians.

“That opens a lot of doors not only for yourself but your family’s future, your children’s education,” Morin, 41, who is also head of the local union, said in a phone interview. “I would love to see this grow right across Canada and to help with aboriginal people.”

Cameco is implementing its policies of training and hiring aboriginal workers as the country prepares for C$650 billion ($616 billion) of resource development over the next decade.

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BHP talks up Canada potash prospects – by Peter Ker (Sydney Morning Herald – November 22, 2013)

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

BHP Billiton says it has been encouraged by recent work that suggests its push into the Canadian potash sector will be supported by further resources of the commodity close to its proposed Jansen mine.

BHP confirmed a gradual push into the potash sector in August, when it approved $US2.6 billion worth of spending on Jansen over five years, and since then the miner has described potash as having the potential to become a ”pillar” of the company alongside iron ore, coal, petroleum and copper.

Speaking at the company’s annual meeting in Perth on Thursday, BHP Billiton boss Andrew Mackenzie said exploration work had suggested that Jansen could be just the start of a ”basin-wide play” for BHP in the Canadian state of Saskatchewan.
”On its own Jansen is probably not a big enough resource for us to be a business that would rival our other four pillars, we need several Jansens,” he said,

”The news is good, we feel very confident that we now have many more Jansens that future generations of management can consider to think about this as a basin-wide play.”

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