Republic of Mining

Gold Sinks to 5.5-Year Low Amid Rallying Stock Markets, Strong U.S. Dollar – by Jim Wyckoff (Kitco News – November 17, 2015)

November 18, 2015November 17, 2015

http://www.kitco.com/

(Kitco News) – Gold prices dropped to a 5.5-year low Tuesday, pressured in part by rallying U.S. and world stock markets early this week. Traders and investors have reckoned the terror attacks in Paris are not going to influence their trading decisions–at least not at this time.

The “risk-on” mentality in the market place Tuesday was bearish for the safe-haven gold market, as monies flowed into the competing asset class: equities. The other bearish element working against the precious metals recently is the rally in the U.S. dollar index, which on Tuesday hit a seven-month high.

February Comex gold was last down $14.30 at $1,069.80 an ounce. March Comex silver was last down $0.072 at $14.18 an ounce.

Copper price slump could create headwinds for Glencore’s debt plan – by Olivia Kumwenda-Mtambo and Atul Prakash (Reuters U.S. – November 17, 2015)

November 17, 2015

http://www.reuters.com/

JOHANNESBURG/LONDON – Further falls in copper prices might yet undermine the fightback mounted by mining and trading company Glencore after its shares tumbled to record lows this year, analysts said.

London Metal Exchange benchmark copper plunged to $4,590 a tonne on Tuesday, its lowest in more than six years, as fears about slowing demand growth in top consumer China and a higher dollar fueled negative sentiment.

Glencore saw its shares hit a record low at 66.67 pence in September over concerns it was not doing enough to cut its debt to withstand a prolonged fall in copper – its key metal.

Swiss-based Glencore has pledged to cut its net debt from nearly $30 billion to $20 billion by the end of 2016, a plan the company said would allow it withstand copper prices of $4,000 a tonne, as expected by some market players.

Chinese demand needed to alleviate mining pain unlikely to come – by Cole Latimer (Australian Mining – November 17, 2015)

November 17, 2015

http://www.australianmining.com.au/

Bankers are forecasting a rise in Chinese demand as the only way for mining to grow, but those in the industry are not expecting strong growth in the nation, however this is not fazing miners.

The Goldman Sachs Group has outlined ongoing weakness in copper and aluminium markets, and continued pain in iron ore, unless a rise in seen in Chinese metal demands.

It went on to say cost cutting exercises by miners in an attempt to tighten operations won’t help margins in the long term.

“While recent supply cuts in copper and aluminium may appear to bring the markets closer to balance, the cuts in our view are not sufficient to do so,” analysts explained according to Bloomberg.

“It is our view that the supply cuts confirm the bear case for these metals. “Only a major pickup in Chinese demand is likely to be sufficient to balance metals markets.”

Is mining innovation an oxymoron? – by Nathan Stubina (Northern Miner – November 17, 2015)

November 17, 2015

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Newspapers are replete with articles denouncing the dearth of innovation in the mining sector. While we may argue about the causes – the sector’s capital intensive nature, the people who work in mining, etc. — most people will agree that the mining industry appears to be innovating at a much slower pace than other industries.

I believe that most of us are clear on why we need to innovate. The mining industry is facing many difficult challenges: lower grade ores, smaller deposits, increasing power costs, tighter margins, faltering capital markets, political risks, increased social demands, higher taxes, etc.

An example of the type of complex challenges we face: Mining executives frequently ask their engineers what the “carbon footprint” of a new process will look like – a question unheard of 30 years ago.

Nowadays, questions about water and power requirement don’t start with: ‘how much does it cost?’

Bacanora raises US$13.4 million for Mexican lithium project (Northern Miner – November 16, 2015)

November 17, 2015November 17, 2015

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Just a few months after Bacanora Minerals (TSXV: BCN) and Rare Earth Minerals (LSE: REM) signed a deal with Tesla Motors (NASDAQ: TSLA) to supply the car maker with lithium hydroxide from their Sonora lithium project in Mexico, the companies have raised US$13.4 million in a private placement.

The proceeds will be used for a bankable feasibility study of the project, 180 km northeast of Hermosillo, and towards the upgrading and continuous running of a pilot plant in Hermosillo to produce bulk quantities of lithium products to long-term off-take parties.

NEWS RELEASE: Kirkland Lake Gold Creates an Ontario-Focused Intermediate Gold Producer With the Acquisition of St Andrew

November 17, 2015

NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES.

TORONTO, ONTARIO–(Marketwired – Nov. 16, 2015) – Kirkland Lake Gold Inc. (“Kirkland Lake” ) (TSX:KGI) and St Andrew Goldfields Ltd. (“St Andrew”) (TSX:SAS)(OTCQX:STADF) are pleased to announce that they have entered into a binding definitive agreement (the “Agreement”) whereby Kirkland Lake will acquire all of the outstanding common shares of St Andrew pursuant to a plan of arrangement (the “Transaction”) to create a multi-asset, Ontario-focused, intermediate gold producer.

Under the terms of the Agreement, common shareholders of St Andrew will receive 0.0906 of one common share of Kirkland Lake (the “Exchange Ratio”) for each St Andrew common share held. The Exchange Ratio represents the equivalent of C$0.47 per St Andrew common share, based on the closing price of Kirkland Lake on November 16, 2015. The Exchange Ratio implies a 46% premium based on both companies’ 20-day volume-weighted average prices and a 25% premium to St Andrew’s closing price, both as at November 16, 2015 on the Toronto Stock Exchange. The Exchange Ratio implies a total equity value of approximately C$178 million on a fully diluted in-the-money basis.

Iron slides, copper at 6-year low – by Daniel Palmer (Business Spectator/The Australian – November 17, 2015)

November 17, 2015

http://www.theaustralian.com.au/

The price of iron ore has continued its slide toward a 10-year low amid another broad retreat in commodities.

At the end of the latest session, benchmark iron ore for immediate delivery to the port of Tianjin in China was trading at $US47.30 a tonne, down 0.2 per cent from its prior close of $US47.40.

The commodity has rarely seen positive numbers over the past month thanks to ongoing concerns around Chinese demand, the prospect of persistent supply increases, weak crude prices and a US dollar that is rising ahead of a likely rate hike in December.

The former and latter concerns are plaguing the broader commodities space, with base metals and oil all struggling since the US Federal Reserve hinted at a rate move two weeks ago.

Adoption of aluminum in auto industry slower than expected – by Jeff Sanford (Collision Repair Magazine – November 16, 2015)

November 17, 2015

http://www.collisionrepairmag.com/

Toronto, Ontario — November 16, 2015 — Once a quarter the world’s major publicly-traded corporations announce their earnings. Corporate executives appear before the press to offer explanations for exactly why their companies are making or losing money. One story that emerged this past earnings season involves the aluminum sector.

This past earnings season, the CEO of the world’s largest producer of rolled aluminum, Novelis, explained to investors that sluggish business at the company was a result of a slower-than-expected adoption of aluminum by the automotive industry. The big story in the metal sector over the last year has been the shift to wider use of aluminum in the automotive industry.

For decades, high-end vehicles have been made with aluminum. But over the last year the adoption of an aluminum body in the Ford F-150, the best selling car in America, was supposed to mark the beginning of a once-in-history shift from steel to aluminum for more mainstream vehicles.

Tanzania gold miners trapped for 41 days rescued (BBC.com – November 17, 2015)

November 17, 2015

http://www.bbc.com/

Five gold miners have been rescued in western Tanzania after being trapped underground for 41 days, while 12 others are still missing, police say.

The artisanal miners survived by eating roots, soil, frogs and cockroaches and are receiving treatment at hospital.

The group had gone underground to rescue 11 other miners when they became trapped, police said. Many people search for gold in unregulated mines in remote areas of Tanzania in the hope of becoming rich.

This is one of the longest periods that miners have remained trapped underground. In Chile, 33 were rescued after 69 days in 2010 in an operation which gained worldwide attention.

Efforts by local people to rescue the Tanzanian miners were abandoned last month after about a week, as hopes of finding them faded, reports the BBC’s Alice Muthengi from the main city, Dar es Salaam.

Economic Development in Jeopardy? Implications of the Saik’uz First Nation and Stellat’en First Nation v. Rio Tinto Decision – by Ravina Bains (Fraser Institute Research Bulletin – November 17, 2015)

November 17, 2015

https://www.fraserinstitute.org/

Summary

The Saik’uz First Nation and Stellat’en First Nation v. Rio Tinto BC Court of Appeal decision opens the door for future aboriginal title litigation against private parties—litigation that was previously only brought against provincial and federal governments.
Following the BC Court of Appeal decision, First Nations no longer have to prove aboriginal title before bringing damages claims against private parties, such as resource companies. Simply claiming aboriginal title is enough to bring forward litigation against private parties.
In provinces like British Columbia where over 100% of the province is currently under claim, this puts all current and future economic development projects in jeopardy.
Specifically, this judgment could put the Kitimat aluminum smelter and the Kenney Dam, which has been operating for over 60 years with the support of Haisla First Nation, in jeopardy.
Just as the Tsilhqot’in decision resulted in increased litigation against the Crown, this judgement will now result in litigation against private parties regarding aboriginal title, which prior to this case was unprecedented.

BHP Billiton says reviewing two other mining ventures after Brazil dam disaster – by Eric Onstad (Reuters U.S. – November 16, 2015)

November 17, 2015

http://www.reuters.com/

LONDON – Nov 16 BHP Billiton said on Monday it is reviewing two other mining joint ventures, in Peru and Colombia, following a dam disaster at an iron ore mine in Brazil, which it jointly owns with Vale SA.

BHP told analysts and investors it was examining the structures of its Cerrejón coal joint venture in Colombia and its Antamina copper/zinc JV in Peru after the Brazil disaster.

Two dams collapsed on Nov. 5 in southeast Brazil, killing nine people and coating a two-state area with mud and mine waste. The Brazilian mine is owned and operated by Samarco Mineração SA, a joint venture of Anglo-Australian BHP and Brazil’s Vale.

“We will look into, for our own benefit … the arrangements that we have at Samarco which mirror similar arrangements we have at Antamina and Cerrejón,” BHP Chief Executive Andrew Mackenzie told a conference call.

Forget tankers and pipelines, David Black has a plan for a ‘West Coast exit’ for Canada’s oil – by Geoffrey Morgan (National Post – November 17, 2015)

November 17, 2015

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

CALGARY – David Black’s plan to build a $22-billion refinery on the coast of British Columbia has long been derided as a pipe dream. But Black believes that given the recent government moves affecting the Keystone XL and Northern Gateway pipelines his proposed refinery is the best option for Albertan oil exports.

Moreover, Black said in an interview he won’t need a pipeline to build and operate his proposed 550,000 barrel-per-day Kitimat Clean refinery on the north coast of B.C., for which he expects to file applications for federal and provincial regulatory approvals by Christmas.

“You’re going to have to focus on what it takes to get a West Coast exit for your oil, and God knows a West Coast exit is far more lucrative than a southern or an eastern exit,” said Black, the owner of Kitimat Clean Ltd. and the Black Press Group Ltd. newspaper chain.

Major oilsands producers have been unwilling to sign contracts with Kitimat Clean because, Black said, their executives didn’t know if the project would ever be built.

General Magnesium signs deal to process ore – by Ron Grech (Timmins Daily Press – November 16, 2015)

November 17, 2015

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – William Quesnel says it has been a slow 15-year process completing the geological work and getting government approvals in order for him to start up a talc magnesium mine in Whitney Township.

And now like tumbling dominoes, everything seems to be quickly coming into place for the company to begin production next year.

Two weeks ago, Quesnel, chairman and chief executive officer of General Magnesium, announced the signing of a $4.9 billion deal with Hunter Douglas Metals, providing the mine with a buyer for 100% of the magnesium the mine produces over the next 15 years.

This week, Quesnel announced the signing of two more agreements — one with Abbey Gold to process the ore from the Whitney talc magnesite deposit; the other with Haywood Securities, a financing house that will be taking General Magnesium from a privately financed company to one that is publicly sold on the stock market.

Diamonds Are Abundant – by Peter Diamandis (Huffington Post – November 16, 2015)

November 17, 2015

http://www.huffingtonpost.com/

Peter Diamandis is the Chairman/CEO of XPRIZE.

What’s more scarce than perfect diamonds, right? Wrong.

This week, a new company called Diamond Foundry announced that it is able to “grow” hundreds of perfect, “real” diamonds (up to nine carats) in just two weeks in a lab.

Announced “above the line of supercredibility,” with the backing of Leonardo DiCaprio and 10 billionaires, my friend Martin Roscheisen is about to disrupt an industry that has been built on scarcity for centuries.

More details on Diamond Foundry in a second… but in the meantime, this audacious company really begs the question: What is truly scarce?

Steel Is the Poster Child For Oversupplied Commodity Markets, and It’s in Shambles – by Luke Kawa (Bloomberg News – November 16, 2015)

November 17, 2015

http://www.bloomberg.com/

Output has far exceeded demand.

The collapse in oil prices following the shale revolution has stolen the limelight for investors mulling the end of the commodities supercycle.

But the real “poster child for problems in commodities markets is perhaps the global steel industry,” according to Macquarie analysts led by Colin Hamilton, the firm’s global head of commodities research.

The front-month contract for U.S. hot-rolled coil steel futures traded on the New York Mercantile Exchange is down nearly 40 percent year-over-year.

Forecasts for a boom in Chinese consumption helped spur a rise in production that left the segment with a massive glut. The successful realization of economic rebalancing in China, meanwhile, necessarily entails a material slowdown in that nation’s demand for steel.