Republic of Mining

Golden Opportunity: Geopolitical uncertainty has given a boost to gold markets and Canadian miners – by Sandra Rubin (Lexpert Business of Law – September 22, 2017)

September 22, 2017

http://www.lexpert.ca/

Exploration work and financings are back on the table, and foreign investors are taking notice.

EXCEPT FOR THE ODD moment here and there, the Midas Touch has been missing in action from the gold market for the past five years. But guess what? After watching prices slide sideways or slip downward along with most other mining stocks during the long dry spell — when raising money for gold companies is described by Frank Mariage of Fasken Martineau DuMoulin LLP as “an extreme sport” — investor appetite for gold is quietly rebounding.

There are a few different reasons for the renewed demand, but one that keeps coming up is the US dollar. Seen as the global reserve currency and a safe haven since World War II, that view has slowly been eroding. In recent months, geopolitical tensions have ratcheted up while US consumer spending has come in below expectations — suggesting the American economy is not as strong as the market had been pricing in.

Gold and the US dollar move in opposite directions. So any pressure on the US dollar makes gold more expensive for Americans but cheaper for foreign investors to buy — an attractive combination for investors looking to hedge their US-denominated investments.

Psychology of mine safety – by Karen McKinley (Northern Ontario Business – September 22, 2017)

September 22, 2017

https://www.northernontariobusiness.com/

Director of mining, Ontario Operations, Vale Canada Limited delivers controversial presentation on reality of zero harm policies in mining industry

His presentation started with a disclaimer that his views may not represent those of Vale Canada Limited, even joking he may not work for them after what he had to say about zero harm policies in the mining industry.

Alistair Ross, director of mining, Ontario Operations, delivered a comprehensive presentation at the first general membership meeting of 2017 of the Canadian Institute of Mining on Sept. 21 to a packed house at Dynamic Earth in Sudbury.

It focused on the policies that are meant to eliminate injuries and deaths in mining workplaces actually end up becoming harmful policies by adding too much structure and setting impossible goals.

New Roads to Riches – by Sheldon Gordon (Lexpert Business of Law – September 22, 2017)

September 22, 2017

http://www.lexpert.ca/

In a depressed market for commodities, mining companies will have to rely on government funding, P3s and the ambition of local communities to get their projects off the ground.

THE CANADIAN MINING INDUSTRY’S success depends on its capacity to move its output to markets efficiently, at competitive prices and via modern infrastructure such as railways, roads and ports. Power generation is also critical. Mines in northern Canada face a special challenge because of the lack of electrical grid capacity.

The slump in world commodity prices from their peaks of 2011 has put a damper on the mining sector in general and on mining infrastructure procurement in particular. There is cautious optimism regarding mining plays in 2017, but nothing like the exuberance that would be triggered by a sustained rally in precious and base metals.

“I think prices need to go up a little bit more and hold for a little bit longer,” says Erik Goldsilver, a partner at Borden Ladner Gervais LLP in Toronto. “The increase in prices we’ve seen over the past six to 12 months is positive, but there’s still some room to grow.”

How Merkel’s Green Energy Policy Has Fueled Demand for Coal – by Brian Parkin and Weixin Zha (Bloomberg News – September 21, 2017)

September 22, 2017

https://www.bloomberg.com/

Germany still gets 40 percent of its electricity from coal-fired plants.

By 2030, the eastern German town of Poedelwitz will likely be razed to get at the rich veins of coal beneath its half-timbered houses. The reason: Chancellor Angela Merkel’s effort to steer Germany toward greener energy, which has unexpectedly meant booming demand for dirty coal.

While Merkel aims to wean the country from nuclear power and boost renewable energy, the shift has been slow—Germany’s 140-plus coal-fired plants last year supplied 40 percent of the country’s electricity—and Poedelwitz is flanked by open-pit lignite mines that feed a 2 gigawatt power plant a few miles away.

“This is unparalleled destruction of the environment,” says Jens Hausner, a farmer who has seen 17 of his 20 hectares consumed by digging equipment that looks like something out of a Mad Max movie. In a bit more than a decade, the hulking machines are expected to claw through the town’s 13th-century church and 40 or so remaining homes.

Paris is dead. The global warming deniers have won – by Lawrence Solomon (Financial Post – September 22, 2017)

September 22, 2017

http://business.financialpost.com/

Paris came to New York this week, with leaders of countries signing the 2015 Paris Climate Agreement coming to the United Nations to chide, nudge or beseech Donald Trump in hopes he would reverse his decision to scrap the agreement.

The U.K.’s Theresa May, France’s Emmanuel Macron and Justin Trudeau, among others, could have saved their breath. Since his pullout in June, Trump has repeatedly reaffirmed the wisdom of pulling out of the “bad deal” for the U.S. that was Paris. All the evidence that has since come down only bolsters his case.

Shortly after Trump announced the pullout, stats from the Global Coal Plant Tracker portal confirmed that coal is on a tear, with 1600 plants planned or under construction in 62 countries. The champion of this coal-building binge is China, which boasts 11 of the world’s 20 largest coal-plant developers, and which is building 700 of the 1600 new plants, many in foreign countries, including high-population countries such as Egypt and Pakistan that until now have burned little or no coal.

McEwen will be ‘aggressive’ in Timmins gold camp – by Staff (Northern Ontario Business – September 22, 2017)

September 22, 2017

https://www.northernontariobusiness.com/

New owner of Black Fox Mine promises to max out its potential

Mining magnate Rob McEwen has big plans for the Black Fox Mine complex, his company’s latest acquisition in the Timmins mining district. McEwen Mining announced the closing of a US$46.6 million bought deal offering on Sept. 22.

The money is earmarked for the purchase of Black Fox from Primero Mining and for general working purposes. The $35-million deal announced in August is expected to be finalized during the first week of October.

“The opportunity to buy Black Fox came together quickly and the timeframe to close was short, which meant that our financing options were limited to a bought deal or the issuance of debt,” said McEwen in a company news release.

Trump’s Breathtaking Hypocrisy on Coal Mining – by Vivian E. Thomson (Scientific American – September 22, 2017)

September 22, 2017

https://blogs.scientificamerican.com/

Pres. Donald Trump’s contempt for climate change science is well known. Now we see that his administration has put on hold a study of the connections between mountaintop coal mining and the health of nearby communities—research that was requested by West Virginia health authorities and is being conducted by the National Academy of Sciences, Engineering and Medicine. This action demonstrates the president’s disregard for the health of coal miners, their families and their friends.

I have a bit of experience in this area, as a former air pollution regulator. From 2002 to 2010, while a full-time faculty member at the University of Virginia, I was a member of the Virginia State Air Pollution Control Board. Virginia is a longtime coal state, and the board confronted several controversial issues concerning coal-related air pollution. Among them, in 2009, was a case of dust pollution in southwestern Virginia.

In a country hollow in the Appalachian town of Roda, Va., coal trucks were driving along a narrow, steep-sided road leading to and from the area’s surface mines, which have scarred the landscape in every direction. Streams of trucks were raising clouds of dirt in their wakes, as coal dust in their beds and mud caked on the trucks flew into the air. Residents counted 10 trucks per hour, 20 hours a day, on weekdays.

Nunavut, mining company, link arms to improve Kivalliq quality of life – by Beth Brown (Nunatsiaq News – September 21, 2017)

September 22, 2017

http://www.nunatsiaqonline.ca/

GN and AEM name 10 priority areas, but mention no budget to pay for it

Agnico Eagle Mines Ltd. wants to do more than just dig for gold in Nunavut. The multinational corporation, which operates mine sites in Nunavut’s Kivalliq region, signed a memorandum of understanding with the Government of Nunavut Sept. 20, pledging to collaborate with the territory on 10 high-profile “priority areas.”

Those areas are: health, education, training, economic development, infrastructure, housing, heritage resources, wildlife, public safety, and climate change. “None of those are directly mining related,” Agnico Eagle president Ammar Al-Joundi said during a media event at the Nunavut Legislative Assembly in Iqaluit.

But, they are areas that are “absolutely essential” to good mining in the long run, he said, calling the MOU and investment in Nunavummiut all part of the company’s business strategy. The MOU came with no budget or specific funding source. But a spokesperson for the mining company, Dale Coffin, said later that a working group will be struck to further the memorandum’s goals and that any related costs would be borne by Agnico Eagle or the GN.

Iron Ore Routed in Woeful Week as Questions Stack Up on China – by Jasmine Ng (Bloomberg News – September 22, 2017)

September 22, 2017

https://www.bloomberg.com/

Iron ore’s rounding off a woeful week on another soft note as persistent concern about demand in China fuses with expectations of rising supply and falling steel futures to hurt prices. A risk-off mood among investors as North Korean tensions simmered compounded the damage.

The benchmark spot price has tumbled 12 percent this week, the worst performance since May 2016. In China, futures on the Dalian Commodity Exchange have slumped into a bear market and capped a fourth week of declines, the longest in five months, while Singapore’s SGX AsiaClear contracts are chalking up a weekly loss of almost 10 percent.

Iron ore is in retreat as investors fret about the impact on steel production in China of environmental checks even before winter curbs kick in, which may further hurt demand. This year, steel output has been running at a record pace in the top supplier, aiding iron ore.

Eldorado backs down on threat to halt Greek investment, for now – by Angeliki Koutantou (Reuters Canada – September 21, 2017)

September 22, 2017

https://ca.reuters.com/

ATHENS (Reuters) – Eldorado Gold (ELD.TO) EGO.N on Thursday postponed a decision to freeze its investment in Greece, saying that talks with the country’s leftist-led government, which granted it key permits last week, were “constructive”.

The Canadian miner last week threatened to halt new investment in its Olympias, Skouries and the Stratoni mines in the northern Greek region of Halkidiki from Sept. 22 unless the Greek government granted it permits and showed a willingness to engage in talks.

Eldorado also said it would only reassess its decision to freeze its investment if it got a permit for a flotation plant in Skouries. Since then Athens has issued permits to allow Eldorado’s Olympias project to become fully operational and has also launched an arbitration process to settle a long-running dispute over a metallurgical plant in Madem Lakkos.

Yukon placer miners don’t dig the idea of higher gold royalty rates – by Nancy Thomson (CBC News North – September 21, 2017)

September 22, 2017

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

‘The impression that a placer miner has a room full of gold that they can roll in — just doesn’t exist’

The Klondike Placer Miners’ Association (KPMA) says modernizing the royalty rates for placer gold won’t help the Yukon government avoid budget deficits. About 35 placer miners presented their opinions to the territory’s financial advisory panel at a meeting this week in Dawson City.

The independent panel issued a draft report earlier this month, spelling out ways the government might balance its books in the future. One recommendation is to review taxation on mining with a possible increase on the royalty rate on placer gold operations.

But placer miners say their industry makes a valuable contribution to local economies — and should not be taxed further. KPMA president Mike McDougall says although miners pay only about 37 and a half cents tax per ounce of gold — a royalty rate that hasn’t changed in a century — they also pay business and personal income tax.

AUDIO: A mine was once here: reclamation underway at Hemlo in northern Ontario – by Jeff Walters (CBC News Thunder Bay – September 21, 2017)

September 22, 2017

http://www.cbc.ca/news/canada/thunder-bay/

Could take 50 years for site to blend into surrounding forest

It is considered to be one of the best gold mine camps in Canada, and the reclamation underway at the Hemlo Gold Camp near Marathon, Ont., could also make it one of the best mining cleanups in the country. The Hemlo camp was home to three mines, operating side by side, for nearly three decades. Now, the Golden Giant and David Bell Mines are empty fields.

The Gold Giant Mine operated until 2014, while the David Bell Mine ceased production in 2010. The Williams Mine, the furthest west of the three operations, at this point, could run its open pit and underground workings until 2031.

“To see [them] close down is definitely a hard thing to see, but we wanted to make sure it was done responsibly,” said Jeremy Dart, Barrick’s environmental superintendent. “A lot of the employees and people that worked here had some excellent training and skills they were able to take to other mining operations, or other career sets.”

Investors betting on electric cars send millions into lithium ETF – by Evelyn Cheng (CNBC.com – September 21, 2017)

September 21, 2017

https://www.cnbc.com/

Investors are betting on a surge in electric car sales after indications that China, the world’s largest market for the vehicles, may soon wind down production and sales of cars using fossil fuel.

From the time China’s state-run Xinhua newspaper reported the news on Sept. 11 through Tuesday’s close, investors poured about $143 million into the Global X Lithium & Battery Tech exchange-traded fund (LIT), according to ETF.com. Tuesday alone drew $49.8 million in inflows, nearly 10 percent of the now $651 million fund.

That kind of interest in an ETF, especially one so narrowly focused, is “extremely rare,” said Todd Rosenbluth, director of ETF and mutual fund research at CFRA. “A really strong 2017 has triggered strong investor interest at a time when a lot of money is going into well diversified and cheap ETFs.”

Tanzania orders wall built around tanzanite mines to end illegal trade – by Fumbuka Ng’wanakilala (Reuters U.S. – September 20, 2017)

September 21, 2017

https://www.reuters.com/

DAR ES SALAAM (Reuters) – Tanzania’s president ordered the military on Wednesday to build walls around its tanzanite mines and directed the central bank to buy the precious stone to boost reserves – the latest twist in a spat with mining firms over alleged tax evasion.

President John Magufuli’s government accuses mining firms of cheating Tanzania out of its fair share of mineral wealth through tax dodging and smuggling, allegations they deny.

“All tanzanite gemstones will be controlled and will pass through one gate and he (Magufuli) ordered the (central) Bank of Tanzania to take part in the tanzanite buying trade,” a statement from the presidency said.

McEwen Mining – Regaining the Long-Lost Gold Mojo – by Christopher Ecclestone (InvestorIntel.com – September 20, 2017)

September 21, 2017

https://investorintel.com/

Back at the end of last decade (yes, that long ago) we found ourselves confounded when investors rhapsodized to us about the virtues of a company that then carried the portentous and momentous title, US Gold. The attraction of this stock was supposedly that it was run by Rob McEwen, a Canadian mining entrepreneur that we were reliably informed could walk on water. Despite the claims we were never able to see this stunt performed.

What we did see was our beloved Minera Andes taken over followed by an unseemly and rancorous shoving match with Hochschild Mining over the San Jose mine, a long and turgid legal dispute with TNR Gold over its back-in rights over part of the Los Azules project and a bunch of Nevada gold “assets” that supposedly had Closeology going for them.

With a billion dollar market cap and a pack of swivel-eyed loons as its most ardent supporters the stock had Short written all over it in letters as large as the Hollywood sign. The stock dutifully (and thankfully) drove off a cliff and we closed the theoretical position in our Model Portfolio and went off as happy campers. As for the embedded investors there was a long and painful wait as the chart below shows.