Republic of Mining

NEWS RELEASE: KWG Reports Progress of Claims Hearings

May 28, 2015

TORONTO, ONTARIO–(Marketwired – May 28, 2015) – KWG Resources Inc. (CSE:KWG)(FRANKFURT:KW6) reports that its subsidiary Canada Chrome Corporation (“KWG/CCC”) has filed the materials required to perfect its appeal at the Ontario Court of Appeal. A hearing date will be scheduled by the Court’s Registrar.

The respondent 2274659 Ontario Inc. and the intervenor the Minister of Northern Development and Mines will have until June 29, 2015 to file responding materials if they elect to do so. 2274659 Ontario Inc. was formerly a subsidiary of Cliffs Natural Resources Inc. (“Cliffs”) and is now wholly-owned by Noront Resources Ltd. (“Noront”).

The Contest with Cliffs for access to the Ring of Fire:

At a hearing before the Mining and Lands Commissioner (“MLC”) in early 2013, Cliffs sought an order to dispense with the consent of KWG/CCC for the granting of an easement for Cliffs to build a road on top of mining claims staked by KWG/CCC along a 340 kilometer corridor of high ground. KWG/CCC had spent some $15 million to explore the claims and assess their profiles and aggregates to provide a means of egress for the Big Daddy chromite deposit in which KWG/CCC has a 30% joint venture interest with Cliffs then holding the 70% interest. The MLC declined to grant the order sought by Cliffs and Cliffs then appealed the MLC decision to the Divisional Court of the Ontario Superior Court.

COLUMN-“Cautious optimism” abounds in Asia commodities – by Clyde Russell (Reuters Africa – May 28, 2015)

May 28, 2015

http://af.reuters.com/

SINGAPORE, May 28 (Reuters) – There appears to be an outbreak of “cautious optimism” in the Asian commodities sector.

It was easy to lose track of the number of times the phrase popped up in presentations and conversations at four major commodities conferences in the region in the past two weeks.

However, defining what people meant by being cautiously optimistic was somewhat more challenging, although the common thread was a view that the worst is over for commodity prices, and the sector is once again worth looking at from an investment perspective.

Of course, it’s easy to dismiss participants at the SGX Iron Ore Forum and the Asia Mining Congress in Singapore, the Asia Oil & Gas Conference in Kuala Lumpur and the LME Week Asia in Hong Kong as talking their books, or at least to their hopes.

But what will be key is how the expectations of better times ahead translates into action. From a pricing perspective, there was widespread acknowledgement that the likelihood of strong rallies was very low, rather what producers, traders, buyers and investors are forecasting is a gradual grind higher as rising demand eats away the supply overhang created by over-investment in mines.

NEWS RELEASE: Teck Responds to Steelmaking Coal Market Conditions

May 28, 2015

May 28, 2015 – Vancouver, B.C. – Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) (“Teck”) announced today it will be implementing temporary shutdowns in the third quarter at its six Canadian steelmaking coal operations in order to align production and inventories with changing coal market conditions.

Each of Teck’s steelmaking coal operations will be temporarily shut down for approximately three weeks in the quarter. Shutdowns will be staggered over the summer months among the operations. Teck will continue to meet all contracted and committed coal sales for its entire suite of products.

Third quarter production will be reduced by approximately 1.5 million tonnes (Mt) to 5.7 Mt, a reduction of 22% for the quarter, with expected sales in the range of 6.0 – 6.5 Mt. Annual coal production is now estimated at 25 – 26 Mt. Additional coal production adjustments will be considered over the course of 2015 as market conditions continue to evolve.

Guidance for unit operating and distribution costs for the year is unchanged. Capitalized stripping is expected to be about $65 million lower than original guidance reflecting lower coal production and reduced stripping costs this year due to lower diesel costs and productivity improvements since the start of the year.

Vale may sell potash assets in Saskatchewan – by Rachelle Younglai and Niall McGee (Globe and Mail – May 28, 2015)

May 28, 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.

As Brazil’s Vale SA figures out what to do with its fertilizer business, the mining giant is thought to be testing the waters on a potential sale, according to people familiar with the matter.

In addition to potash mines in South America, the Brazilian mining company owns a big potash development project and slew of fertilizer concessions in Saskatchewan, the world’s biggest producer of potash – a crop nutrient.

“There has been a lot of chatter that Vale is possibly considering selling their fertilizer business. If you are preparing your assets for sale, you want to increase the value of your portfolio,” said Joel Jackson, an analyst with Bank of Montreal.

Vale, the world’s biggest iron ore supplier and a major producer of other metals, is under pressure to sell assets amid a nearly $20-billion (U.S.) expansion of its iron ore complex in Brazil. People familiar with the matter said it has been trying to gauge how much its fertilizer business could fetch.

Mining investment crucial amid downturn, industry warns – by Lisa Wright (Toronto Star – May 28, 2015)

May 28, 2015

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

‘Unlike the Maple Leafs, mining always bounces back,’ says Mining Association of Canada president

Mining is more resilient than the Toronto Maple Leafs, but Canada risks being shut out as a top global player as the commodity slump drags on, warns the president of the Mining Association of Canada. “It’s been tough,” Pierre Gratton told the Economic Club of Canada Wednesday.

He emphasized that the last six months have been “generally dismal” for miners and commodity prices, particularly iron ore and coal, and their near-term prospects aren’t great either, he said.

Mineral exploration financing was also “grim” in 2013 as global budgets to discover new projects dropped by 30 per cent, he noted, adding: “This decline is as worrisome as it is dramatic.”

And last year, after an eight-year reign as the top country for global exploration spending, Canada dropped to second place behind Australia.

Change needed to reboot [Ontario] exploration – by Len Gillis (Timmins Daily Press – May 28, 2015)

May 28, 2015

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – A Northern geologist who represents one of the key players in the Ring Of Fire mining project, says Ontario needs a friendlier investment climate to reboot the mining exploration industry.

Without continued exploration and the discovery of new mineral deposits, the mining industry in Ontario will eventually fail according to Moe Lavigne who spoke at the opening of The Big Event on Wednesday.

Lavigne, a Timmins native, is the vice-president of exploration and development for KWG Resources Inc. which has a large stake in the Ring Of Fire.

Lavigne is taking part in an exploration forum at The Big Event and said Wednesday he was pleased to be part of the Timmins mining show, but somewhat disappointed that there were fewer exploration companies on site, compared to past years.

“Exploration or grass roots exploration in Ontario has come to a grinding halt,” Lavigne told the audience.

[Saskatchewan] Expansion project will make K3 world’s largest potash mine – by Bruce Johnstone (Regina Leader-Post – May 27, 2015)

May 27, 2015

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

REGINA — Mosaic Potash’s recently announced $1.7-billion expansion project at its K3 potash mine at Esterhazy will increase production capacity from three million tons to 21 million tons by 2024, according to Lawrence Berthelet, director of capital expansion for Mosaic Potash.

“(This project) will make K3 the largest, most competitive potash mine in the world,” Berthelet said Tuesday at a Saskatchewan Mining Week presentation in Regina.

Following his presentation, Berthelet said “the expanded project will allow us to … expand capacity to give us more miners at the (mine) face and more infrastructure to deliver more tons. It allows us … to maximize the capacity of that K3 facility.’’

Begun in 2009 at a cost $1.5 billion, K3 was designed to be expanded through several stages. In March, Mosaic announced that the expansion project would go ahead, bringing total investment at the K3 site to $3.2 billion.

The expansion project will create more than 300 construction jobs a year — 600 at peak construction — during the eight-year development period.

Details still elusive on Ring of Fire progress – by Staff (Northern Ontario Business – May 27, 2015)

May 27, 2015

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.

The Ring of Fire may appear to be a garden of agony for the mining companies involved, but Ontario’s lead negotiator charged with working out a crucial and historic agreement with affected First Nations assures all that real progress is being made to advance development in the Far North.

Former Supreme Court justice Frank Iacobucci talked at length before a Greater Sudbury Chamber of Commerce lunch crowd on May 26 about Canada’s evolving relationship with Aboriginal people in righting the wrongdoings of the past with a new partnership based on mutual respect.

But he didn’t reveal much about what progress has been made since a much ballyhooed regional framework agreement was signed by Premier Kathleen Wynne and the Matawa chiefs in 2014, except to confirm that a second round of negotiations is coming up. “A lot of work has been going on. We don’t work in the public arena. We work behind the scenes.”

In July 2013, Iacobucci was appointed Ontario’s lead negotiator in discussions with the chiefs of the Matawa First Nations, a tribal council of communities closest to the mineral deposits in the James Bay lowlands. Matawa’s negotiator is former Ontario premier Bob Rae. He reports to Northern Development and Mines Minister Michael Gravelle.

Could SA’s gold mining industry be gone by 2020? – by Patrick Cairns (Mineweb.com – May 27, 2015)

May 27, 2015

http://www.mineweb.com/

Peter Major on how management has lost control of their mines.

The South African mining industry is in trouble. That is not in question. The only debatable point is exactly how much trouble it is in.

The industry on which this country’s modern economy was built has been stuttering since the global financial crisis. What investors and anyone else with an interest in mining’s role in the economy wants to know, is where this is headed.

Are we nearing a point where we will start to see a turnaround? Or is there a chance that things will simply continue to deteriorate?

Speaking at the JSE’s Power Hour in Cape Town, Peter Major, mining specialist at Cadiz Corporate Solutions, warned that one must be wary of thinking that things will always revert to an historically established mean. The mining environment in South Africa has changed so much over the last few decades that “the old rules no longer apply”.

“South Africa is the world’s richest country in terms of mineral resources,” said Major. “We have more resources than Russia and the US combined. This was the greatest mining country in the world for 100 years, but it’s not anymore.”

Industry Warns Copper Boom at Risk – by John Quigley (Bloomberg News – May 26, 2015)

May 27, 2015

http://www.bloomberg.com/

Peru tightened security and closed schools in the country’s south as unions began a 48-hour protest as part of the biggest wave of mining opposition in three years.

A contingent of riot police guarded the main square of Arequipa, the biggest southern city, and shop windows were partially shuttered, Radio Programas reported. Police and army officers patrolled the Tambo Valley, the site of Southern Copper Corp.’s Tia Maria copper project.

Peru’s goal of becoming a copper powerhouse is being threatened by violent protests against Tia Maria in the past two months, according to Carlos Galvez, president of Peru’s National Society of Mining, Petroleum and Energy. The upheaval could reduce mining investment to “very close to zero” by 2018, down from a record $9.7 billion in 2013, unless the government defends new projects, he said in an interview in Lima Tuesday.

Peru, the world’s third-biggest copper producer, is poised to increase output of the metal 73 percent in the next three years on new capacity from Freeport-McMoRan Inc. and MMG Ltd. Investment needed to sustain the expansion is on hold because of protests by local groups opposed to mining, Galvez said.

Inside the war on coal – by Michael Grunwald (Politco.com – May 2015)

May 27, 2015

http://www.politico.com/

How Mike Bloomberg, red-state businesses, and a lot of Midwestern lawyers are changing American energy faster than you think.

The war on coal is not just political rhetoric, or a paranoid fantasy concocted by rapacious polluters. It’s real and it’s relentless. Over the past five years, it has killed a coal-fired power plant every 10 days. It has quietly transformed the U.S. electric grid and the global climate debate.

The industry and its supporters use “war on coal” as shorthand for a ferocious assault by a hostile White House, but the real war on coal is not primarily an Obama war, or even a Washington war. It’s a guerrilla war. The front lines are not at the Environmental Protection Agency or the Supreme Court.

If you want to see how the fossil fuel that once powered most of the country is being battered by enemy forces, you have to watch state and local hearings where utility commissions and other obscure governing bodies debate individual coal plants. You probably won’t find much drama. You’ll definitely find lawyers from the Sierra Club’s Beyond Coal campaign, the boots on the ground in the war on coal.

Beyond Coal is the most extensive, expensive and effective campaign in the Club’s 123-year history, and maybe the history of the environmental movement.

Quebec miners rescued from underground gold mine (CBC News Montreal – May 26, 2015)

May 27, 2015

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

2nd collapse at mine in 4 months, likely caused by seismic activity

After being trapped for nearly 18 hours, nine miners have been rescued and are back on the surface following a collapse at a gold mine in the Abitibi region of Quebec.

The miners became trapped around 3:30 a.m. ET on Tuesday in the Westwood Mine in Preissac, after a collapse that appears to have been caused by seismic activity.

Sylvain Lehoux, the mine’s general manager, said everyone had made it safely to the surface by 9:30 p.m. Union spokesman Marc Thibodeau said the miners were in “good spirits” — but also hungry, as they had no food while underground.

3rd seismic event at mine

The mine’s owners, IAMGOLD Corp., recorded two seismic events, with magnitudes of 1.2 and 1.7 on Monday. The Westwood mine is located over the Cadillac fault.

New project adds some lustre to Quebec’s depressed iron market – by Robert Gibbens (Montreal Gazette – May 26, 2015)

May 27, 2015

http://montrealgazette.com/

Two iron mine closures in 2013 took a heavy toll on the Quebec-Labrador trough, but Tata Steel and partner New Millennium Iron Corp. are ramping up a new export project to hit annual capacity of 6 million tonnes next year.

The DSO (direct shipping ore) project, as it is known, is managed by Tata Steel, which also arranged the financing. It is mining high-grade iron ore (60 per cent average iron content), with the first 2 million tonnes being shipped to market directly and 4 million tonnes being upgraded in a new high-tech processing plant.

The products will move almost 600 kilometres by rail to Sept-Îles on the St. Lawrence north shore for loading into heavy ore carriers and delivery to Tata Steel furnaces in Europe and elsewhere.

The DSO Project, located well northwest of the two mothballed mines, has cost at least $560 million U.S. It has sufficient reserves for an active life of at least 15 years and will provide about 700 direct and indirect jobs. DSO has negotiated a benefits pact with the First Nations.

But Tata Steel, Europe’s second-biggest steelmaker and part of the giant Indian Tata Group conglomerate, is looking at something more ambitious: the Taconite project to develop several major iron deposits straddling the Quebec-Labrador border farther north near Schefferville.

Turn Out the Lights: Australia Calls Commodity Spending Boom End – by David Stringer (Bloomberg News – May 27, 2015)

May 27, 2015

http://www.bloomberg.com/

Australia, an engine room of the decade-long global commodity boom, is forecasting a staggering 90 percent plunge in spending on projects, calling time on its biggest resources bonanza since the 1850s gold rush.

After a collapse in prices from oil to iron ore, the value of Australia’s approved and financed mining and energy projects is forecast fall to about A$15 billion ($12 billion) in 2017, from A$226 billion at the end of April.

Planned iron ore projects worth at least A$10 billion have been canceled since October, according to the Department of Industry and Science. Billionaire Gina Rinehart’s Roy Hill — due to ship later this year — is Australia’s last remaining mining project being developed worth A$5 billion or more.

“The value of committed projects is about to start declining substantially,” Mark Cully, the department’s chief economist, said Wednesday in a statement. “It is clear that this will not be offset by new investments coming through the pipeline.”

Waning demand growth in key markets including China, the biggest commodities consumer, and programs by miners to cut capital expenditure mean there’s a lack of projects toward the end of this decade, the department said in a report.

Kidnappings highlight security risks for miners (Northern Miner – May 26, 2015)

May 27, 2015

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

In the first four months of this year alone, kidnapping incidents have touched Torex Gold Resources (TSX: TGX) and Goldcorp (TSX: G; NYSE: GG) in Mexico’s Guerrero state, and Pan African Minerals’ Tambao manganese mine in Burkina Faso.

The headlines have been alarming for mining companies and for investors, especially since many kidnapping incidents are unreported.

“For every incident that you see in the press, there are numerous that never make it to the light of day,” says Chris Arehart, global product manager for kidnap and ransom and crime insurance at Chubb Insurance Group.

Mining companies are uniquely exposed to kidnapping risks because they often operate in remote areas, in countries with low political stability, and attract attention by bringing in big equipment and hiring a lot of locals.

The risks vary from country to country and even from region to region within countries. But kidnappings are much more common in countries with low political stability, where law enforcement is corrupt, inept, ill-trained or underfunded, and where the judicial system may also be corrupt, and laws not as stringent.