Republic of Mining

(Nevada Mining) Editorial: The Romance of Mining (Elko Daily Free Press – May 1, 2015)

May 1, 2015

(This editorial from 50 years ago is being republished in honor of Newmont Mining Corp.’s celebration of 50 years on the Carlin Trend.)

Historically, Nevada has been a mining state. The great Comstock Lode, which helped to bring this state into the Union, Tonopah’s silver and Goldfield’s gold are part of the romantic heritage which has come down through the years. The great copper mines of Ely and Weed Heights have added to the lustre, to say nothing of the wealth of this state and the nation.

There have been numerous other finds in the state’s history leading to the building of mining towns, some passing into oblivion almost overnight. Mountain City, the great Rio Tinto copper mine, Pioche, Austin, Eureka and such other romantic names as Tuscarora, Cornucopia, the Divide near Tonopah, Gold Aces and many others have passed in review.

As Dr. John Hulse said in his recently written “The Nevada Adventure”, “Nevada was basically unwanted and unloved in those days (before mining). It was a barrier to a promised land, rather than an asset in itself. But this soon changed.”

Yes, it changed with Virginia City and the mining finds which followed throughout the state. James Finney, whose real name may have been James Fennimore, according to Dr. Hulse, was exploring the hills at the head of Gold Canyon in the winter of 1858-1859 when he found a mound, soon to be named Gold Hill.

Creating an Economic Vision around mining – Norway has it right – by Tom Hoefer (Yellowknife Chamber of Commerce – April 30, 2015)

May 1, 2015

https://ykchamber.com/

http://www.miningnorth.com/

Tom Hoefer is the Executive Director of the NWT & Nunavut Chamber of Mines.

A month ago, I wrote an editorial piece for the News/North titled: Are we regulating mineral exploration out of the NWT? The piece raised concerns over the rapid decline in mineral exploration investment in the NWT, and its effects on the economy today and in future. Since mining relies in no small part on successful exploration, declining investment will affect the sustainability of our mining industry. But there is more to this story.

We must all care about this, for in a post devolution world we have the responsibility to manage our own affairs and to establish an economy capable of supporting us. The recent announcement that Canada will increase the NWT’s borrowing limits is the last piece signaling we are “grown up”. We have now started on our own economic journey, and we now carry the responsibility for our own future. No more blaming Ottawa.

In picking a path forward, we must look to what strengths we have, and what we are good at. That is mining. Our mining industry has proven itself through thick and thin to be the most significant private sector contributor to our economy for over 60 years. It has contributed major infrastructure including all of our hydropower plants, our railway, has helped drive highway construction and is a key contributor through tolls to the Deh Cho Bridge.

Iron ore wars get personal as Rio tells Fortescue to get its house in order – by Michael Smith (Australian Financial Review – April 30, 2015)

May 1, 2015

http://www.afr.com/

Fortescue Metals founder Andrew Forrest has not been shy about telling Rio Tinto and BHP Billiton how to run their iron ore operations. Rio Tinto’s iron ore boss Andrew Harding is now offering Forrest some advice of his own: get your own house in order and leave us alone.

“The response to that is to fix your own business – not give business advice to others, and definitely not create an environment in Australia where this long-term strategy, which is good for the country, and good for the company, is cast into question,” Harding said in an interview with The Australian Financial Review.

The comments highlight the growing tension between the nation’s three big iron ore producers as the debate about how to manage supply and demand in a low-price environment spills over into the political arena.

It is not the first time Harding has defended the strategy to run the company’s mines at full capacity. But the campaign on both sides is intensifying and becoming more personal.

Harding has made it clear Rio Tinto is not going to blink. He doesn’t believe BHP Billiton has either, despite some contrary interpretations of last week’s decision to defer infrastructure spending at Port Hedland.

For De Beers, There’s a Diamond in the Mining Waste – by John W. Miller (Wall Street Journal – April 29, 2015)

May 1, 2015

http://www.wsj.com/

More miners are processing former waste rock as new deposits become harder to find

KIMBERLEY, South Africa—Every day De Beers sends trucks of waste rock through this celebrated mining town, part of its effort to squeeze the remaining diamonds out of the deposit that started the company in 1888.

De Beers, a unit of Anglo American PLC, is still the world’s biggest diamond miner, with operations in Namibia, Botswana, Canada and South Africa. The company stopped mining in Kimberley nine years ago, but as new deposits of the scarce mineral grows even harder to find, exploiting waste pits now represents a lucrative niche—and one that more miners are trying to tap.

Mining companies say processing tailings, as former waste rock is known, is increasingly becoming an economic imperative.

As miners have already plumbed some of the world’s richest deposits, grades of most metals and minerals have declined. That means processing already-mined tailings can be a more attractive proposition than traditional mining.

“Over the past century, the average copper grade has fallen to 1% from 4%, and production has gone up 16-fold,” says Ruban Yogarajah, a spokesman for BHP Billiton, the world’s biggest mining company. “So every year, it gets harder and harder.”

NEWS RELEASE: Noront Completes Acquisition of Securities of KWG Resources Inc.

May 1, 2015

TORONTO, ON–(Marketwired – April 30, 2015) – Noront Resources Ltd. (TSX VENTURE: NOT) (“Noront”) has completed the indirect acquisition of 111,733,215 common shares (each a “Purchased Share”) of KWG Resources Inc. (“KWG”) (TSX VENTURE: KWG) from Cliffs Greene B.V. (“Cliffs Greene”) in connection with the previously-announced broader transaction pursuant to which Noront acquired certain other assets from affiliates of Cliffs Greene. The Purchased Shares of KWG are held by Noront’s wholly-owned subsidiary Noront Muketei Minerals Ltd.

As a result, Noront beneficially owns approximately 13.8% of the issued and outstanding common shares of KWG as at the date of acquisition.

The Purchased Shares were acquired for investment purposes. Noront may increase or decrease its beneficial ownership in KWG in the future, depending on, among other factors, market conditions and other factors relevant to Noront’s investment decisions. Other than the Purchased Shares, Noront has no current intention to increase its beneficial ownership of, or control or direction over, additional securities of KWG.
About Noront Resources

Noront Resources Ltd. is focused on development of the high-grade Eagle’s Nest nickel, copper, platinum and palladium deposit and the high-grade Black Thor and Blackbird chromite deposits, all of which are located in the James Bay Lowlands of Ontario in an emerging metals camp known as the Ring of Fire. www.norontresources.com

Sherritt’s CEO optimistic about future nickel prices – Business Network News (The Street – April 29, 2015)

April 30, 2015

http://www.bnn.ca/ David Pathe, Chief Executive Officer of Sherritt International, joins BNN’s “The Street” to discuss the mining industry, nickel, and relations with Cuba. He says that he sees a shift from excess nickel supply to surplus demand over the next several years, which will help the company’s bottom line. Despite lower production costs, Sherritt …

UPDATE 2- Vale posts $3.2 bln loss on iron ore’s relentless fall – by Stephen Eisenhammer (Reuters U.S. – April 30, 2015)

April 30, 2015

http://www.reuters.com/

(Reuters) – Brazil’s Vale SA , the world’s No. 1 producer of iron ore, on Thursday posted its third straight quarterly loss under pressure from falling prices of the commodity as demand growth from China slows.

The miner reported a net loss of $3.2 billion in the first quarter, compared with a net profit of $2.4 billion in the same period last year. The result compares with a forecast net loss of $2.4 billion according to a Reuters poll.

The first-quarter loss was wider than that in the third and fourth quarters of last year. Vale has been hit by a tumble in the price of the main steel-making ingredient .IO62-CNI=SI, which is near its lowest in a decade having fallen 47 percent in the past 12 months.

Prices have fallen due to huge new capacity from Brazil and Australia that is beginning to flood the market, just as growth slows of Chinese demand for steel.

As well as weaker iron ore prices, Vale said the depreciation of the Brazilian real against the dollar had cost the company $3.02 billion in the quarter.

Industry welcomes extended industrial electricity rate – by Jonathan Migneault (Northern Ontario Business – April 29, 2015)

April 30, 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 Ontario government has announced it plans on making the Northern Industrial Electricity Rate (NIER) Program permanent.

Sudbury MPP Glenn Thibeault made the announcement in Sudbury while Northern Development and Mines Minister Michael Gravelle held a press conference on the issue in Thunder Bay on April 17.

“Many of the major industries have been talking to me about the importance of this program,” Thibeault said.

Ontario is committing to an ongoing program, beyond March 2016, with continued investment of up to $120 million per year. The government will also undertake a review on the efficiency and effectiveness of the program and options for a sustainable approach.

The Northern Industrial Electricity Rate Program was introduced as a three-year program in 2010, and was extended in 2012, for qualifying Northern industrial customers. It aims to offset higher energy costs in the North due to climate and distance to markets.

Inquest: Jury urged to look at all mines with rec’s – by Carol Mulligan (Sudbury Star – April 30, 2015)

April 30, 2015

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

The project manager of the Mining Health, Safety and Prevention Review urged a coroner’s jury to consider making recommendations that will improve safety throughout all Ontario mines, not just at Vale’s Stobie Mine or at Sudbury mining operations.

Wayne DeL’Orme was the last witness to testify at the inquest into the deaths of Jordan Fram and Jason Chenier on June 8, 2011. Chenier, 35, was a supervisor for Vale and Fram, 26, was a miner. They were killed by a run of tons of muck that had been hung up in the No. 7 ore pass, let go and swamped the 3,000 level near the pass where they were working.

DeL’Orme told the three-woman, one-man jury Thursday that the role of the mining review was to look at all aspects of health and safety in underground mines and recommend ways to improve conditions.

It was prompted by a call for a full-blown mining inquiry after the deaths of the men at Stobie. A group called MINES (Mining Inquiry Needs Everyone’s Support) lobbied for a review, led by Wendy Fram, the mother of Jordan Fram. Thousands of postcards were sent to Labour minister demanding an inquiry.

Brazil’s Vale Considers Cutting Iron-Ore Output – by Paul Kiernan (Wall Street Journal – April 30, 2015)

April 30, 2015

http://www.wsj.com/

Company remains committed to capacity growth, but may freeze some higher-cost production

RIO DE JANEIRO—The world’s largest iron-ore producer gave the strongest signals yet Thursday that it could temper output in the face of an oversupplied global market.

Peter Poppinga, head of the ferrous division at Brazil’s Vale SA, said that while the company remains committed to increasing its annual iron-ore capacity to 450 million metric tons in a few years from around 350 million tons now, it may idle up to 30 million tons of higher-cost production. He reiterated that the strategy was “new” and came in addition to an existing plan to buy less ore from third parties.

Vale and fellow iron-ore majors Rio Tinto PLC and BHP Billiton PLC have been criticized by smaller rivals and many analysts in recent months for increasing their output of the steelmaking ingredient despite stagnating demand from China, the world’s main market. Together the three companies account for some 60% of global iron-ore exports, and all have continued to invest in new supply even as prices collapsed in recent months.

The Brazilian company has faced heat for plowing ahead with a particularly costly, $16.4 billion expansion of its Carajás mining complex in the Brazilian Amazon. Company executives on Thursday again brushed aside suggestions that they might stretch out the project’s timeline.

The search for gold: Lake Shore sees sparkle in the Gap – by Jonathan Migneault (Sudbury Northern Life – April 29, 2015)

April 30, 2015

http://www.northernlife.ca/

CEO Tony Makuch kicks off Modern Mining and Technology Week in Sudbury

Timmins-based Lake Shore Gold has come a long way since a rough patch in 2012 and 2013 when a lot of investors thought the gold producer could go bankrupt.

The company’s first quarter of 2015 was its best ever, with a record production of 53,000 ounces of gold, which represented a 19-per-cent increase over the same period in 2014.

Tony Makuch, the president and CEO of Lake Shore Gold, kicked off Modern Mining and Technology Week in Sudbury on April 24 with a keynote about the company’s trials, tribulations and more recent successes.

“No one thought there was any value in these deposits,” Makuch said, referring to the company’s two Timmins mines, Bell Creek and Timmins West.

“You have to believe in the mining industry, and that gold will be discovered,” he added. “I didn’t know what we would find there in Timmins.”

Why Africa’s mining industry can weather the commodity-price storm – by Rolake Akinkugbe (Euromoney.com – April 2015)

April 30, 2015

http://www.euromoney.com/default.aspx

The correction in the global commodity cycle shouldn’t derail investors’ search for new exploration frontiers in sub-Saharan Africa (SSA), given the region’s high-quality mining and metal assets, and still-growing steel demand in China. In any case, efforts to boost local value-added processing should remain on track.

Minds have been refocused on sub-Saharan Africa’s (SSA) mining and metals sector since oil prices began their downward climb in June. Only 18 months earlier, the region’s mining industry had come under heavy scrutiny after a series of labour disputes and worker strikes in South Africa’s mines.

Meanwhile, iron-ore, gold and copper prices have been depressed, raising concerns over export revenues for a number of African mineral producers. Should growth in China, which consumes almost 50% of global metal supplies, stagnate, then Africa’s mining sector could be in for a protracted depression.

However, there is some cause for optimism. Despite global economic uncertainty over the past two years, the budget for non-ferrous metals exploration in SSA has remained relatively robust, helping to underpin continued industry investment.

Yamana CEO giving back special share units after say-on-pay vote – by Janet McFarland (Globe and Mail – April 30, 2015)

April 30, 2015April 30, 2015

http://www.bnn.ca/

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.

Yamana Gold Corp. chief executive officer Peter Marrone is giving back special share units he was granted last June, saying he has heard the message sent by shareholders who voted against the company’s compensation plan in its annual say-on-pay vote.

Yamana reported Wednesday that it lost the say-on-pay vote at its annual meeting in Toronto, making it the third major major company to lose a compensation vote in the past week. Shareholders of Canadian Imperial Bank of Commerce and Barrick Gold Corp. also voted against compensation plans at both companies, complaining about special payments awarded to senior executives in both cases.

Barrick’s new gold discovery – by Kip Keen (April 29, 2015)

April 30, 2015

http://www.mineweb.com/

Barrick looks to have found another multi-million ounce gold deposit.

In the hands of the world’s biggest gold miner, a decent, even pretty big, gold discovery doesn’t make a lot of waves. When you churn out 6 million ounces gold or so a year you don’t get a lot of recognition for the pre-resource stuff especially. Firstly, you can’t put a dollar figure or cash flow analysis to it that carries even a faint promise of being accurate given the vagaries of deposit development – including unclear tonnage and grade, metallurgical questions, infrastructure issues, potential people problems, and permitting, and so on.

The list goes on. And secondly, for a Barrick, with fairly deep gold reserves already, and yet also a high rate of reserve depletion, absolutely speaking, it’s both hard to impress the market and to keep up with reserve replacement even with new discoveries. You’re mostly measured by your best existing and operating mines, not potential greenshoots in the field. Fair enough.

But still. Gold discoveries, especially of multi-million ounce deposits, with early indications they may work as a mine, are pretty damn rare. So it’s hard not to at least give kudos when they’re made. Barrick deserves some this week. A couple days back Barrick reported first drilling results on its Alturas project in Chile. It’s clearly shaping up to be one of the larger gold discoveries in recent years.

Commodity rush: turnaround…or a dead cat? – by Sungula Nkabinde (Moneyweb.com – April 29, 2015)

April 30, 2015

http://www.moneyweb.co.za/

Significant gains over the past few days may cloud judgement over commodity cycle turnaround.

Even though the JSE closed in the red, Tuesday was another good day for resource stocks with many companies boasting significant gains. Kumba Iron Ore was up 8.44%, Assore rose by 9.63%, while the platinum miners Anglo American Platinum and Impala Platinum gaining 7.42% and 7.55% respectively. The gold stocks also performed well, but to a lesser extent. Harmony Gold (4.27%) and AngloGold Ashanti (4.46%), among others, were also in the black.

This was the second run in as many (South African business) days. Kumba also rose by 11% on Friday in response to an increase in iron ore prices. BHP Billiton, though it lost some ground on Tuesday, also climbed by about 3.5% on the day.

So, could this be the beginning of the turnaround in commodity stocks that the industry has so desperately been waiting for? Ryan Wibberley, Investec Asset Management’s head of dealing for emerging and frontier markets, says it’s too early to tell but argues that it could be.

“The majority of general equity portfolios in South Africa, at the moment, are significantly underweight when it comes to resources.