Republic of Mining

Don’t expect another commodities supercycle but oil at $60 is better than $30 for your portfolio – by Olev Edur (Financial Post – February 15, 2017)

February 15, 2017

http://business.financialpost.com/

“We’ve had a ten-year supercycle and then a five-year blow-off.” That’s how Drummond Brodeur, senior vice-president and global strategist with Signature Asset Management (a division of CI Investments) in Toronto, succinctly sums up the past 15 years for Canadian markets.

While the panic selling of early 2016 gave way to something of a rebound throughout the rest of the year — a “still alive bounce” — Brodeur offers an even more succinct summary of the outlook for Canadian markets going forward: “Meh.”

“We saw oil go down below US$30 and now it’s back to US$50, but it’s not going back to US$100 any time soon,” Brodeur says. “Maybe US$60, but we won’t see a resumption of the supercycle that occurred between 2001 and 2011. It’s not exciting, but US$60 is a lot better than US$30, and the market should be much more stable going forward.”

Sisson mine owners see share price climb 56% in weeks before Maliseet deal – by Robert Jones (CBC News New Brunswick – February 15, 2017)

February 15, 2017

http://www.cbc.ca/news/canada/new-brunswick/

New Brunswick government says deal was announced as soon as possible after being confirmed by First Nations

Northcliff Resources Ltd., the Vancouver-based firm behind the proposed tungsten–molybdenum open pit mine and processing facility outside Stanley saw its stock price jump 56 per cent between Dec. 15 and Feb. 9, according to Toronto Stock Exchange trading archives.

The price escalation began roughly at the same time the province and Maliseet First Nation communities came to a deal about the mine.

“It was in December, mid–December — around early to mid–December,” said Chief Patricia Bernard of the Madawaska Maliseet First Nation about when she and five other chiefs agreed not to oppose the mine in exchange for a deal with the province on tax sharing on gasoline and tobacco sales. Bernard said documents formalizing the December agreements were then signed on Jan. 31.

China Mulls Resuming Coal Output Curbs for Six Months (Bloomberg News – February 15, 2017)

February 15, 2017

https://www.bloomberg.com/

China may not be done trying to manage coal prices. The world’s biggest producer and consumer is considering reinstating output restrictions to avoid the return of a glut after it eased limits during winter, according to people with knowledge of the plan.

The National Development and Reform Commission may resume curbs that cap output at an equivalent of 276 days of capacity after heating season ends in mid-March, said the people, who asked not to be identified because the information isn’t public.

The NDRC, the nation’s top planner, didn’t respond to a faxed request for comment and nobody answered calls to its press office Wednesday. China sent coal prices and mining shares on a tear last year after President Xi Jinping’s government imposed output restrictions aimed at easing an oversupply and supporting indebted miners.

‘Timing is key’: Supercycle effects still loom over long-term fund returns – by Olev Edur (Financial Post – February 15, 2017)

February 15, 2017

http://business.financialpost.com/

Looking at the latest 15-year fund performance figures, you’d think that Canadian equities are absolutely the best investments in the world, especially the small and mid caps. Resource and precious metal funds, despite ongoing commodity headwinds, don’t look too shabby either.

Those were among the top-performing categories in the Canadian mutual fund universe for the 15-year period ended Dec. 31, 2016, according to data provided by Fundata Canada Inc. Real estate equities (a small category comprising just three funds with 15-year track records) and energy equity funds rounded out the Top 5, even though oil prices now hover around the US$50 per barrel mark. Canadian dividend/income equity funds held sixth place in terms of 15-year performance.

The implications of Table 2 (below), which lists the Top 15 out of 28 total funds that achieved double-digit 15-year returns through 2016, are even more dramatic: The vast majority of these funds were Canadian equities and most were also in the small/mid-cap space.

From Appalachia To Standing Rock, Water Is Life – by Mary Anne Hitt (Huffington Post – February 13, 2017)

February 15, 2017

http://www.huffingtonpost.com/

Mary Anne Hitt is director of the Sierra Club’s Beyond Coal Campaign.

I live in West Virginia, one of the states where residents can now expect more toxic coal pollution in our streams and rivers thanks to a repeal of mining safeguards by the Republican-controlled Congress.

A few short days after that disastrous decision, the White House cancelled an environmental review and then approved the permit for the Dakota Access pipeline, which threatens the drinking water for the Standing Rock Sioux and millions more people downstream.

The Standing Rock Sioux have long opposed the Dakota Access pipeline because of the risk to drinking water, and this week’s decision was one more painful demonstration of how quickly some political leaders will put profits over public health and tribal sovereignty.

Northern Prospectors Association expects challenges in 2017 (Kirkland Lake Northern News – February 15, 2017)

February 15, 2017

http://www.northernnews.ca/

KIRKLAND LAKE – The Northern Prospectors Association recently held its annual general meeting. During the meeting Association President Gino Chitaroni gave a speech which reviewed 2016. Chitaroni stated it was an up and down year for the mining industry.

“Exploration expenditures are once again down in 2016 making this current bear cycle going on to 6 years. Its nothing short of brutal. Yet, there has been one good news story, in another tough year for exploration, and that is the “Cobalt Rush” that has been happening in the Cobalt Mining Camp. This rush has not been seen in the Cobalt Camp since the Silver discovery in Cobalt of 1903 which has resulted in a renaissance of property acquisitions and exploration from Temagami to Elk Lake, in and around the Town of Cobalt spilling over into Quebec, and over to Gowganda-Shining Tree areas right down to the northern outskirts of Sudbury.”

From the political side, Chitaroni had very few good things to say about Premier Wynne “from the possible roll out of Map Staking by MNDM to pushing for changes to streamline the process for plans and permits for exploration; to staving off hostile advances against exploration beit the Cariboo Story of negativity regarding exploration to the Carbon Tax assault on our industry and all business.

Road to the Ring of Fire – by Marilyn Scales (Canadian Mining Journal – February/March 2017)

February 15, 2017

http://www.canadianminingjournal.com/

Noront is eager to begin development at Eagle’s Nest, the first of many mines

Spirits were high in March 2015 when the Ontario government announced at the PDAC it was moving forward with an allweather road into the Ring of Fire. Here we are almost two years later, and what do we have for the more than $750,000 in tax dollars that were spent? The answer: Not much. The province has consulted with various First Nations who would welcome a road. It has yet to announce a plan, route or schedule for construction.

Seeing the politicians make a decision and actually build a road is the one thing Alan Coutts, president and CEO of Noront Resources, says is vital to get the Eagle’s Nest nickel-copper-platinum-palladium development under way. The company discovered the deposit in 2007 and sparked a staking rush that made the Ring of Fire the most written about new camp since Hemlo.

The Ring of Fire lies about 500 km northeast of Thunder Bay, Ont. The area is centred on McFaulds Lake on the edge of the James Bay Lowlands. As many as nine First Nations may be impacted by mineral development, making consultation complex.

Teck profit climbs on higher coal prices; demand cooling – by Susan Taylor (Reuters U.S. – February 15, 2017)

February 15, 2017

http://www.reuters.com/

TORONTO – Canadian miner Teck Resources Ltd reported a better-than-expected quarterly profit on Wednesday, lifted by a surge in the price of coal for steelmaking, but said weaker demand in recent weeks was eroding prices and sales.

Teck, the largest producer of steelmaking, or coking, coal in North America, said customers appear to be drawing down inventories following a fourth-quarter buying binge, sparked by global supply worries that were ultimately unfounded. The Chinese New Year holidays also crimped demand.

Shares of the Vancouver-based company, which also mines copper, gold and silver, were down 4.3 percent at C$31.27 in early trading. Teck forecast steelmaking coal sales of approximately 6 million tonnes in the first quarter, down from 7.3 million tonnes in the fourth quarter.

Proud Canadian mining sector for a strong nation – by Marilyn Scales (Canadian Mining Journal – February/March 2017)

February 15, 2017

http://www.canadianminingjournal.com/

Canada is celebrating the 150th anniversary of Confederation. In 1867 the founding fathers met in Charlottetown built the foundation of a nation truly “strong and free”. They did a very good job, too. We can savour their hard work as we join in various celebrations around the country.

One of the reasons to be proud of Canada is its vast storehouse of natural resources and the men and enterprises that put us among the world’s premier mineral producers – gold, uranium, potash, base metals, diamonds, and the metals of the future. Our mineral legacy has also given rise to some of the world’s best technology for finding, mining and processing those riches.

Let’s take a look at the first person to be caught up in our mineral wealth. While Martin Frobisher searched for the Northwest Passage, he ballasted his ships with shiny yellow rocks. What he thought would be his fortune was pyrite, not gold, and his mistake was not pointed out until he had made another voyage and collected even more rocks. The lesson is: Never send a ship captain to do a geologist’s job.

French king Louis XIV granted what are probably the first mineral concessions on Cape Breton Island to Nicolas Denys who discovered coal there in 1672. For the next 200 years mining was small scale, done to meet local needs.

Iron ore rally fires up Rio Tinto’s commodity merry-go-round – by Clyde Russell (Reuters U.S. – February 15, 2017)

February 15, 2017

http://www.reuters.com/

JOHANNESBURG Reuters) – Mining company super profits appear to be back on the agenda as earnings stand to be turbo-charged by higher-than-expected prices for iron ore and other metals, while volumes are also likely to be strong.

It’s the stuff of dreams for mining company bosses: high prices and strong production that can be sold into a rally.

Iron ore has been the standout so far in 2017, and as the steel-making ingredient surged to its highest level in three year above $90 a ton, so too will profits at the three major producers, Brazil’s Vale and the Anglo-Australian pair of Rio Tinto and BHP Billiton.

Investors have already had a little taste of what may come, with Rio raising its dividend above market expectations when it released results last week.

Tepco invokes ‘Act of God’ clause on Cameco deal, but it seems more like a Hail Mary – by Drew Hasselback (Financial Post – February 15, 2017)

February 15, 2017

http://business.financialpost.com/

Tokyo Electric Power’s move to pull the plug on an agreement with Canadian uranium miner Cameco Corp. is the latest example of a company arguably stretching the traditional use of a force majeure or “Act of God” clause to suspend a contract.

Tokyo Electric Power Co. Holdings Inc. argues that it has been unable to operate its nuclear power plants in Japan because of government regulations enacted after the 2011 Fukushima nuclear disaster. The accident was caused by an earthquake and resulting tsunami. Centuries of legal tradition should easily place those natural disasters within anyone’s definition of Acts of God.

You probably can’t say that for government-made regulation, though Tepco’s obvious point is there wouldn’t be regulation but for those preceding Acts of God. Maybe it is legally possible to say those natural disasters started a chain reaction of unforeseeable events, including more government regulation. It depends on the wording of the force majeure clause in the contract between Tepco and Cameco.

The public backlash rises as the credibility of high-cost low-carbon policies collapses – by Jack M. Mintz (Financial Post – February 15, 2017)

February 15, 2017

http://business.financialpost.com/

“Offering up unrealistic targets, heavier tax burdens on families
and businesses, and distortionary energy policies that favour
higher-cost but unreliable solar and wind power will undermine
Canada’s economic performance with little impact on
global GHG emissions.”

Despite what you might hear from certain Canadian politicians, governments everywhere are starting to back away from anti-carbon policies as the backlash from voters continues to mount.

We see it in Germany where they’ve begun returning to coal power. We see it in the cancellation of green subsidies in the U.K., Portugal and Spain. And there are even signs of it in Ontario, which suspended plans for $3.8 billion in new renewable contracts.

Something largely lost in the media flurry over President Trump’s executive orders was the Republican Congress’s unravelling of notable fossil fuel regulations. The House passed two resolutions last week: one rescinding “war-on-coal” water-quality standards, and another rescinding a rule requiring energy companies to report payments made to governments to extract oil, gas and minerals.

Australian Big miners to benefit from ‘fundamental shift’ in China’s iron ore appetite – by Peter Ker (Australian Financial Review – February 14, 2017)

February 15, 2017

http://www.afr.com/

Australia’s biggest iron ore miners are set to benefit from a “fundamental shift” in China’s demand for higher grade iron ore, which has sent spot prices rocketing and could keep them high for some time yet.

The benchmark iron ore price reached a 30-month high of $US92.23 per tonne on Tuesday, and the commodity’s strongest start to a year since 2014 is fuelling expectations for rising dividends from mining companies and dramatically improved revenues to the federal and Western Australian government.

The timing of the rally is particularly good for WA Premier Colin Barnett, who will face voters at an election in less than a month and can expect iron ore royalties to deliver billions of dollars of extra revenue into the state’s struggling finances over the next few years.

Nunavut’s Hope Bay mine pours its first gold bar (CBC News North – February 14, 2017)

February 15, 2017

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

Commercial production at Kitikmeot gold mine expected to begin soon

TMAC Resources’ Hope Bay gold mine poured its first gold bar late last Thursday evening, on its way to commercial production. The mine is located 125 kilometres southwest of Cambridge Bay and about 700 kilometres northeast of Yellowknife.

Construction of the processing plant building at the Doris North deposit — the first of several deposits at Hope Bay expected to be mined — finished in September. A modular style of ore processor made by Australian company Gekko Systems called a “python” was shipped to the site and installed.

Ann Wilkinson, vice-president of investor relations for TMAC Resources, says the company is pleased with its performance. “A lot of the people who witnessed the first pour said that they’d never seen a first bar of gold look that clean,” she said.

Environmental justice: The Philippines mining industry – by Dr. Florangel Rosario Braid (Manila Bulletin – February 14, 2017)

February 15, 2017

http://news.mb.com.ph/

Pro-environment activists hailed President Duterte’s support for Environment Secretary Gina Lopez’s order to close 23 mining corporations that had violated environmental laws. The basis of the DENR ruling on the closure of these 23 mining firm(out of a total of 41 firm) was that they were operating in functional watersheds.

They shall not be operating unless they appeal the decision which would become final when the President says it is. Water is important, Lopez says, and the green economy can actually create more jobs.

The 23 firms include One Asia Mining and Development Corp. in Bulacan, the Benguet Corporation, the country’s oldest mining company, the Benguet Corporation’s Nickel Mines, Inc., the Diversified Metals Corporation in Zambales, the Eraman Minerals, three mining companies in Homonhon, six firms in Dinagat Islands, and seven other firms in Surigao del Norte. In addition, five corporations were also suspended.