Republic of Mining

BP reaches $18.7 billion settlement over deadly 2010 spill – by Tery Wade and Kristen Hays (Reuters U.S. – July 2, 2015)

July 3, 2015

http://www.reuters.com/

HOUSTON – BP Plc will pay up to $18.7 billion in penalties to the U.S. government and five states to resolve nearly all claims from its deadly Gulf of Mexico oil spill five years ago in the largest corporate settlement in U.S. history.

The agreement adds to the $43.8 billion that BP had previously set aside for criminal and civil penalties and cleanup costs. The company said its total pre-tax charge for the spill now stands at $53.8 billion. (link.reuters.com/duz94w)

BP shares jumped more than 5 percent in New York trading as investors said the British company, often mentioned as a potential acquisition target, could now turn the page on one of the darkest chapters in its century-long history.

Under the agreement with the U.S. Department of Justice and the states, BP will pay at least $12.8 billion for Clean Water Act fines and natural resource damages, plus $4.9 billion to states. The payouts will be staggered over as many as 18 years. The preliminary settlement, subject to all sorts of variables, avoids a substantial amount of further litigation.

NEWS RELEASE: McEwen Mining Addresses New York Stock Exchange Listing Requirements

July 3, 2015

TORONTO, ONTARIO–(Marketwired – July 2, 2015) – McEwen Mining Inc. (NYSE:MUX) (TSX:MUX) announced today that it has fallen below the New York Stock Exchange (“NYSE”) continued listing requirement related to the price of its common stock. The NYSE requires that the average closing price of a listed company’s common stock be above US$1.00 per share, calculated over a period of 30 consecutive trading days. The Company was advised by the NYSE on July 1, 2015 that the average price of our common stock for the previous 30 trading days was below US$1.00 per share

Under the NYSE’s rules, McEwen Mining has a period of six months from July 1, 2015, the date of the Company’s acknowledgement, to bring its share price and 30 day average closing share price back above US$1.00. During this period, McEwen Mining’s common stock will continue to trade on the NYSE, subject to all other continued listing requirements. The Company’s listing on the Toronto Stock Exchange (“TSX”) is unaffected by any actions of the NYSE.

“We do not believe that McEwen Mining’s current share price is reflective of the true value of the Company’s assets. Our share price has been under pressure as a result of the decline in gold and silver prices and a general reduction in financing options that have affected many companies in the mining space. The Company values its NYSE listing and will evaluate measures to bring our share price into compliance with listing requirements.” said Rob McEwen, Chairman and Chief Owner.

Barrick Gold makes big changes to become a smaller company – by Joe Castaldo (Canadian Business Magazine – July 3, 2015)

July 3, 2015

http://www.canadianbusiness.com/

Long-suffering shareholders see potential as the company focuses on shedding debt and getting back to gold

It’s quiet at the headquarters of Barrick Gold in Toronto. On a Wednesday afternoon in May, all that can be heard is the soft hum of the ventilation system. A few years ago, around 500 people filled the office, overseeing mining operations that spanned the globe. Today, there are just 140 employees responsible for a much smaller geographical footprint. And that footprint might shrink over the coming year.

For long-suffering Barrick shareholders, this is welcome news. “We’re taking Barrick back to the way it was 15 years ago,” says Kelvin Dushnisky, the company’s co-president. Back then, Barrick was not a bloated organization that had lost investor confidence, nor was it facing a mountainous $13-billion debt in a depressed gold market. Since 2012, Barrick’s share price has fallen by roughly 70%.

While gold prices are a long way from where they were at the height of the 2000s commodities boom—a reality that’s hurt many miners—Barrick’s wounds are mostly self-inflicted. In 2011, founder and chairman Peter Munk pushed the company to spend billions on an underperforming copper mine in Zambia. Barrick also botched the development of what was to be a monster gold mine on the border of Chile and Argentina called Pascua-Lama. These two headaches have cost Barrick about $15.9 billion over the past few years, according to an analyst at Macquarie Group.

REFILE-Iron ore price fall a sign China’s economic might waning – by James Regan and Ruby Lian (Reuters U.S. – July 3, 2015)

July 3, 2015

http://www.reuters.com/

SYDNEY/SHANGHAI, July 3 (Reuters) – Iron ore prices dropped to the lowest in more than two months on Friday, sending shivers through the mining industry and heightening worries that Chinese economic activity is slowing just as ore piles up at its ports.

China uses more than a billion tonnes of iron ore a year to make steel – 14 times the consumption of the United States – but Beijing’s efforts to shift the economy to consumer-led growth means steel consumption is peaking faster than expected.

“It’s clear China can no longer consume all the iron ore that’s out there, so something’s got to give,” said James Wilson, a sector analyst for Morgans Financial in Perth.

Shares in Australia’s biggest mining houses, including Rio Tinto , BHP Billiton and Fortescue Metals Group led the Australian bourse lower after the price of the raw material fell by 5 percent.

B.C. privacy report finds no significant Mount Polley risks prior to disaster – by Dirk Meissner (CANADIAN PRESS/Vancouver Sun – July 2, 2015)

July 3, 2015

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

VICTORIA – The British Columbia government needs to “open the gates” on information that is in the public interest, says a new report into last summer’s Mount Polley mine disaster.

The report by Information and Privacy Commissioner Elizabeth Denham said that while the government didn’t violate its legal obligations to report on conditions at the central B.C. mine before the August 2014 tailings-pond breach, it now needs to release more information because of her interpretation of the Freedom of Information and Protection of Privacy Act.

She said her office previously interpreted Section 25(1)(b) of the act to permit only the release of information considered to be urgent, but it will now interpret the section to permit the release of information that a reasonable observer would consider in the public’s interest.

“In the past the duties or obligations to disclose information that’s clearly in the public interest was interpreted very narrowly by my predecessors. I think wrongly,” Denham said in a Thursday interview.

Mongolia premier pledges to end Tavan Tolgoi coal mine impasse – by James Kynge and James Wilson (Financial Times – July 2, 2015)

July 3, 2015

http://www.ft.com/intl/markets/emerging-markets

London – Mongolia will “in the very near future” end an impasse over investment in a $5bn coal mine and push forward “Steppe Road” infrastructure plans with Russia and China, the prime minister has said as he seeks to shore up investor support for his country’s flagging economy.

Saikhanbileg Chimed also indicated that Mongolia planned to launch another sovereign bond as the country seeks to get “back to business” following two years of slowing growth in gross domestic product, plummeting foreign direct investment and rating agency downgrades of its junk-rated “Chinggis” bonds.

Official approval for investors to start work on the Tavan Tolgoi (TT) coking coal mine in the Gobi desert should follow soon after a review of the investor agreement in parliament this month, Mr Saikhanbileg told the Financial Times in an interview. Investors in the project include China’s Shenhua Energy and Japan’s Sumitomo Corp.
“TT will be unlocked in the very near future,” he said.

Plan Nord: Québec’s First Nations on the Fence – by Nellie Peyton (World Policy Blog – July 2, 2015)

July 3, 2015

http://www.worldpolicy.org/

When Québec Premier Philippe Couillard presented his ambitious development plan for the province’s northern territory to a room full of potential New York investors last week, he was emphatic in declaring his concern and regard for the aboriginal communities in the region.

“The First Nations want development, but not just any kind of development,” Couillard said at a press conference following the event. He explained that the kind they want will contribute to the social development of their communities, provide decent jobs for their youth, and respect their traditional way of life. He also said that his government has been communicating with the First Nations “from the very beginning” of the project, to make sure that they are on board with the major changes that will soon be coming to their homelands.

“Plan Nord” is Québec’s new $50 billion development plan, focused on natural resources extraction in an area about twice the size of Texas. The region is home to over 120,000 people, of whom one third are aboriginals. Couillard’s concern for indigenous interests is well-intentioned as Québec begins to roll out its 20-year plan. But he is downplaying many of the conflicts that the project poses for aboriginal communities, and his stated aim of including them from the beginning has already hit rocky ground.

“We’ve always had difficulty engaging with the province,” said Ghislain Picard, Chief of the Assembly of First Nations in Québec and Labrador.

Supply of quality copper concentrate shrinks, sows seeds of price support – by Melanie Burton and Yuka Obayashi (Reuters U.S. – July 3, 2015)

July 3, 2015

http://www.reuters.com/

MELBOURNE/TOKYO, July 3 (Reuters) – Supply of high quality copper concentrate shrank more than expected in the first half of this year due to output delays in top miner Chile, squeezing the pipeline for metal producers and likely supporting prices later in 2015, traders said.

Production from two of four mines in Chile that churn out clean, standard concentrate was stalled in the first half as the country was hit by floods, while the world’s top mine, Escondida, has not tendered surplus concentrate for months, the traders and mining sources said.

Smelters blend clean concentrates with supply from mines that suffer from impurities such as arsenic, which have become more common as miners dig deeper into the earth’s crust.

“The concentrate element is tightening up which will eventually flow through to a tighter refined market,” said analyst Colin Hamilton at Macquarie in London

Benchmark LME copper has shed 8 percent this year as China demand slows, plumbing six-year lows in January. It traded at $5,800 a tonne on Friday.

Potash Corp. wants face time with K+S to save takeover deal – by David Stringer, Andrew Noël and Sheenagh Matthews (Bloomberg News/BNN – July 3, 2015)

July 3, 2015

http://www.bnn.ca/

http://www.bloomberg.com/

Potash Corp. of Saskatchewan Inc. said it wants to meet with management of K+S AG as soon as possible to address concerns that led the German fertilizer producer to reject its 7.8 billion-euro ($8.7 billion U.S.) takeover offer.

“We are seeking to meet with K+S management at the earliest possible opportunity so that we can jointly discuss our commitments and further specify the details that would form the basis of a successful combination,” Potash Corp. Chief Executive Officer Jochen Tilk said in a statement on Friday.

Potash Corp. (POT.TO) seeks to reassure K+S that it wouldn’t be unraveled after the deal, saying the offer isn’t predicated on closing mines, curtailing production, selling the German company’s salt business or cutting jobs. It repeated the merits of its offer of 41 euros a share, after K+S CEO Norbert Steiner indicated in a earlier statement that a proposal of at least 50 euros a share would be more appropriate.

The exploration Elephant in the room – by Kip Keen (Mineweb.com – July 3, 2015)

July 3, 2015

http://www.mineweb.com/

Analysis: We consider a recent report on the issue of exploration by the Boston Consulting Group.

The Boston Consulting Group – one of the so-called Big Three consulting firms – takes on mineral exploration in a recent report. It calls it “Tackling the Crisis in Mineral Exploration” and, as you might guess, it deals with the elephant in the room, which is the lack of elephants in the room. That is: big, important discoveries.

In recent years, despite a massive increase in exploration spending, discoveries have dried up – ground well covered by researchers and analysts. Indeed, the Boston Consulting Group relies heavily on one of the better sources tracking the sector – Mines Consulting run by Richard Schodde – to set the scene.

Schodde shows that over the past decade the rate of deposit discovery has barely budged (even estimating for un-reported discoveries) despite a tenfold increase in exploration spending. What the Boston Consulting Group adds to the issue is a journalistic style endeavour in interviewing six of the industries better-known explorers.

These include Graham Brown, Douglas Kirwin, Jim Lalor, Sig Muessig, Andy Wallace and Dan Wood. This makes for an interesting, and at times, insightful read on industry issues, no doubt there.

Wallbridge Mining reports promising find near Capreol – by Staff (Sudbury Star – July 3, 2015)

July 3, 2015

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

Wallbridge Mining Company says it has uncovered what it is calling massive sulfide nickel-copper and platinum group metals mineralization on one of its Sudbury properties.

“The Parkin properties have high quality near-surface exploration targets and also have significant potential at depth evident from the presence of a surface resource and a past producing mine, as well as significant mineralization intersections at depth in the Milnet 1500 Zone,” Marz Kord, president and CEO of Wallbridge, said in a release.

“We are working to attract new partner financing to advance the Parkin properties and in the meantime we add value by further exploration on the properties.” The Parkin properties are located north of Capreol.

Wallbridg said the properties (Parkin, Milnet, CBA Parkin, and Parkin East) cover a 9.4-km strike length of the Parkin Offset dyke, which hosts nickel, copper, and platinum group metals mineralization, including:

Iron ore drop, Vale start could make Fortescue Metals a marginal producer – by Amanda Saunders (Australian Financial Review – July 3, 2015)

July 3, 2015

http://www.afr.com/

Even as Fortescue Metals Group races to hammer down production costs, the leaner miner faces the prospect of becoming the marginal producer of the large iron ore players, once Brazil’s Vale brings its new mega expansion project online, analysts say.

Iron ore crashed spectacularly overnight on Thursday – falling 6 per cent to $US55.63 a tonne – its biggest one-day decline in a year. It snatched back much of the modest recovery made since hitting a record low of $US47 a tonne in early April.

UBS mining analyst Glyn Lawcock told AFR Weekend that “the concern the market has is that the all-in cash delivered price that FMG needs to be cash-neutral is ultimately going to be the dictator of where the long-term price settles”.

Fortescue could become the highest-cost of the large producers – Vale, Rio Tinto and BHP Billiton, and newcomers Roy Hill and Anglo American, he said.

“As more low-cost supply comes on, and high-cost supply is pushed out, ultimately the risk is that Fortescue becomes the most significant size marginal player.

Pricey mining delays [in United States] – by Shane Lasley (North of 60 Mining News – July 5, 2015)

July 3, 2015

http://www.petroleumnews.com/miningnewsnorth/index.shtml

SNL investigates costs of notoriously long mine-permitting process in U.S.

Permitting delays are becoming the bane of companies endeavoring to develop mines in the United States, a country that is otherwise considered a stable and richly endowed mining jurisdiction. SNL Metals & Mining has published a report that shows a notoriously lengthy process is resulting in U. S. mines losing up to half their value before receiving final approvals for development.

“The longer the wait, the more the value of the investment is reduced, even to the extent that the project ultimately becomes an unviable investment,” the mining research firm penned in its report: “Permitting, economic value and mining in the United States.”

The National Mining Association, which commissioned the investigation, hopes the findings will supply U. S. lawmakers with the impetus to approve critical minerals legislation aimed at facilitating a timely permitting process.

“For years, we have witnessed U. S. mines’ struggle to move forward due to an inefficient permitting system plagued by duplication, uncertainty and delays.” National Mining Association President and CEO Hal Quinn said.

Arizona Copper Mine Stirs Debate Pitting Profits vs Religion (New York Times – July 2, 2015)

July 2, 2015

http://www.nytimes.com/

ASSOCIATED PRESS – SUPERIOR, Ariz. — Outside of an aging mining town in the mountains east of Phoenix, a copper company has burrowed a shaft 1.3 miles into the high desert landscape in what is believed to be the deepest such mine in the U.S.

Resolution Copper Mining says the mine will usher in a new era of prosperity for Arizona, bringing in the equivalent of roughly a $1 billion worth of revenue annually for about 60 years in a state still trying to emerge from the housing bust.

The mine also will use approximately 18,000 acre feet of water annually, enough to supply about 40,000 homes. And it will claim nearly 5-square miles on the edge of nearby Superior to store mining waste that can be toxic.

The plan has angered conservationists, residents and Native American tribes who argue the mine will cause irreparable harm to land coveted for its beauty, biodiversity and sanctity.

Tribes say the project could destroy part of a historic ridge where dozens of Apache warriors leapt to their deaths to avoid surrendering to U.S. Calvary during western expansion.

NEWS RELEASE: ALAMOS AND AURICO METALS ANNOUNCE COMPLETION OF MERGER

July 2, 2015

TORONTO, ONTARIO–(Marketwired – July 2, 2015) – Alamos Gold Inc. (“Alamos”) (TSX:AGI)(NYSE:AGI) and AuRico Metals Inc. (“AuRico Metals”) (TSX:AMI) are pleased to announce the completion of the previously announced arrangement (“Arrangement”) involving Alamos Gold Inc. (a predecessor to Alamos) (“Former Alamos”) (TSX:AGI)(NYSE:AGI) and AuRico Gold Inc. (a predecessor to Alamos) (“Former AuRico”) (TSX:AUQ)(NYSE:AUQ).

Pursuant to the Arrangement, Former Alamos and Former AuRico amalgamated to form Alamos, and certain assets of Former AuRico, including the Kemess project, certain royalties and cash, were transferred to AuRico Metals. Approximately 95.1% of the common shares of AuRico Metals (“AuRico Metals Shares”) were distributed to Former Alamos and Former AuRico shareholders. Following completion of the Arrangement, Alamos holds an equity interest of approximately 4.9% in AuRico Metals.

Under the terms of the Arrangement, each Former Alamos share held was ultimately exchanged for 1 Class A common share of Alamos (“Class A Shares”), US$0.0001 in cash, and 0.4397 AuRico Metals Shares, and each Former AuRico share held was ultimately exchanged for 0.5046 Class A Shares and 0.2219 AuRico Metals Shares. Upon closing, Alamos has approximately 255,505,000 Class A Shares outstanding with Former Alamos and Former AuRico shareholders each owning approximately 50% and AuRico Metals has approximately 118,120,000 shares outstanding with Former Alamos and Former AuRico shareholders each owning approximately 50% of the shares not held by Alamos.