Republic of Mining

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.

SPEECH: Experience proves garlands are not distributed for pessimism – by Sam Walsh, chief executive (Melbourne Mining Club – 1 July 2015, London, U.K.)

July 2, 2015

Sam Walsh is the Chief Executive Officer of London-based Rio Tinto Group, the second largest mining company in the world.

**Check against delivery**

Ladies and gentlemen it’s great to be with you tonight. I think I am the first Melbourne-born boy to address the Melbourne Mining Club here at the historic Lord’s cricket ground.

It’s customary at Rio Tinto to acknowledge Traditional Owners and I would like to pay my respects to the first Australians to play cricket in the United Kingdom in 1868. They were from the Wimmera district of my home state of Victoria.

That match was ten years before a colonial eleven took on WG Grace here at Lord’s in a match completed in just under five hours – which you will be pleased to hear is nowhere near the length of my speech tonight.

It’s been quite a fascinating year so far. A lot of commentary, free expert advice, and even some sledging has come our industry’s way.

With a history stretching back to around the time of those early matches, Rio Tinto people know what it takes to play a long and quality innings. As do many of you in this room.

Tanzania: Alert to End Uranium Mining, Nuclear Weapons – by Deus Ngowi (All Africa.com – July 2, 2015)

July 2, 2015

http://allafrica.com/

Moshi — PEACE and environmental activists from around the world are gathering here in a quest to persuade African governments to slap a ban on uranium mining and nuclear weapons as they are twin threats.

Under the K-Project for Peace, the activists, having gone through scientific studies, have formed an opinion that it is in everybody’s best interest that uranium should remain in the ground, as its extraction is in every way hazardous.

K-Project for Peace started as an appeal by Ms Racheal Chagonja, an environmental and peace activist from Tanzania, when she saw the devastating effects of uranium mining (U-Mining) to the environment, health, and rights of indigenous people in Niger and Mali.

She did not want to see this happen to her country Tanzania, a potential future U-Mining country, and sensed the urgency to halt U-Mining in active sites and stop potential future UMining sites in other African countries Ms Chagonja reached out to like-minded civil society organisations in Africa to join her and the project has since grown from an appeal to an international campaign led by young African activists.

We should face up to history and make sure Canada Day is for all: Editorial (Toronto Star – July 1, 2015)

July 2, 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.

Two years before Canada’s marks a century and a half as a united nation, we need a deep reflection on the place of the country’s First Nations.

Canada Day – even one that falls awkwardly in the middle of the working week – is a great time for waving flags. And for very good reason. We have so much to celebrate: we’re among the freest, healthiest and wealthiest people in the world.

We also have a rising generation of young people who will ensure that Canada’s best days lie ahead. On the opposite page, Carol Goar introduces us to three of the most impressive.

Yet Canada’s 148th birthday should also be a time for reflection on how we can do better. As Ken Dryden writes on our opinion page, Canada Day should be not just a commemoration of what we are, but “an expression of what we can be.”

And this year, two years before we mark a century and a half as a united nation, that should mean first and foremost a deep reflection on the place of the country’s First Nations. In the wake of the report of the Truth and Reconciliation Commission, it’s finally time to face up to that broken relationship.

Miners, mugs, Mr Asia – and bat droppings – by Trevor Sykes (Australian Financial Review – July 2, 2015)

July 2, 2015

http://www.afr.com/

Pierpont’s favourite drinking companions are geologists. Their first qualification is that they’re always thirsty, having spent their formative years chipping at rocks in the arid outback of Australia, where the nearest pub is usually 100 miles or more away.

Their second qualification is that they’re literally a down-to-earth bunch. They are quite skilled scientists, but the science of geology inevitably entails plodding around a lot of harsh landscape, so they rarely become academically out of touch with the real world.

Finally – and best of all – any geologist who’s been in the profession for a few decades has an excellent knowledge of which ore deposits are likely to be profitable and which aren’t: a characteristic which has saved your correspondent from many an investment disaster.

So Pierpont was overjoyed when he heard that John Gaskell had written his memoirs, because John is a boy who has been around. He started life in Wigan but now lives in Australia after a career that has taken him through Malawi, Malaysia, Tennessee and a few other places. As there are rocks all around our planet, most geologists have worked in the backblocks of more than one country, which gives them a good perspective on the world.

UNESCO to send group to Wood Buffalo National Park, says First Nations delegate – by Jodie Sinnema (Edmonton Journal – July 1, 2015)

July 2, 2015

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

Party will look at environment impact of oilsands development

UNESCO has agreed to send a monitoring committee to Wood Buffalo National Park to look at cumulative effects of oil, gas and hydro development on the environment, says a northern Alberta First Nation representative.

During a convention in Bonn, Germany this week, UNESCO — the United Nations Educational, Scientific and Cultural Organization — reviewed concerns raised by the Mikisew Cree Nation about the sprawling national park that straddles the Alberta-Northwest Territories border.

The Mikisew Cree had petitioned to have Wood Buffalo — a World Heritage Site since 1983 — deemed “in danger” because of the Site C hydroelectric dam on the Peace River approved by the British Columbia and federal governments, as well as oilsands development and proposed open-pit mining near the northern Alberta park.

“The Mikisew have reported that First Nations have expressed significant concern about (the hydroelectric dam’s) impacts on their hunting, fishing and agricultural areas,” reads a document posted on UNESCO’s website.

Brace yourselves for more job losses in Alberta’s oil and gas sector, economist says – by David Howell (Edmonton Journal – July 2, 2015)

July 2, 2015

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

EDMONTON – A torrent of layoffs in Alberta’s energy sector appears to have slowed as 2015 hits the halfway mark but more job losses may be around the corner, an economist warns.

“I think we are probably over the hump of the majority of layoffs but I don’t think it’s quite over yet,” Todd Hirsch, chief economist at ATB Financial, said this week.

“Over the summer months we will see, I think, a few more probably big announcements and some more layoffs in that oil and gas sector.”

Thousands of Albertans lost their jobs in the first six months of 2015. The cuts were deepest in the energy sector, as oil producers, drilling contractors and service companies reacted to the sharp decline in oil prices that started last fall.

Prices for benchmark West Texas Intermediate crude oil fell from $107 US per barrel in June 2014 to less than $50 in January, and dipped below $50 a second time in March. Workforce reductions — sometimes called “organization rightsizing” — have been widespread.

Vale Tumbles With Iron Ore Below $60 as Brazilian Stocks Advance – by Denyse Godoy (Bloomberg News – June 30, 2015)

July 2, 2015

http://www.bloomberg.com/

Vale SA, the world’s largest iron-ore miner, sank to a two-month low on concern that global supplies of the steelmaking ingredient are too high. The Ibovespa posted the best first half of any year since 2009.

Shares of Vale extended their 2015 plunge to 19 percent as Australia cut its price estimates for the commodity, saying the nation’s exports will surge. The raw material dropped below $60 a ton, paring this quarter’s gain to 16 percent.

The slump in iron ore sent a gauge of commodity shares in the MSCI Brazil to the only decline among 10 groups Tuesday. While the industry’s stock swings have abated this month, they reached the highest level since 2011 at the end of May amid a roller-coaster ride in the raw material.

“It’s hard to forecast now where the commodity is going,” Pedro Paulo Silveira, the chief economist at brokerage TOV Corretora, said in a phone interview from Sao Paulo. “Vale has fallen a lot because of prospects for iron ore.”

The stock led losses in the Ibovespa, which added 0.1 percent to 53,080.88 at the close of trading in Sao Paulo. Commodity companies account for about a quarter of the stock gauge.

Rio Tinto chief Sam Walsh tells rivals to stop sledging – by by James Chessell (Australian Financial Review – July 2, 2015)

July 2, 2015

http://www.afr.com/

Rio Tinto chief executive Sam Walsh may not have mentioned Fortescue Metals Group or Glencore by name.

But the rival mining companies were clearly on his mind as he delivered the speech at the Melbourne Mining Club’s annual gathering in London on Wednesday.

Addressing a 560-strong crowd packed into a marquee next to Lord’s Cricket Ground, Mr Walsh said 2015 had been characterised by “a lot of commentary, free expert advice, and even some sledging”.

Mr Walsh, who has held the top job at Rio since January 2013, said it was in Australia’s national interest to stick to the principles of open markets at a “challenging” time for many commodities, including iron ore, coal and aluminium.

“Some have called it a crisis of confidence and talked themselves and others into a gloom,” he said.

“It’s been suggested to me there’s a direct correlation between your position on the cost curve and the volume of your opinion. The higher on the curve, the louder you get.”

Platinum: Time for a cartel? – by Adrian Saville (Mineweb.com – July 1, 2015)

July 2, 2015

http://www.mineweb.com/

The chances are slim, and a stabilisation fund might be a better alternative.

An op-ed by Dr Adrian Saville, Professor of Economics at the Gordon Institute of Business Science, and Chief Strategist at Citadel.

In spite of the beleaguered platinum sector effectively being an oligopoly, with three suppliers controlling the bulk of new mine supply, the industry is a price taker, vulnerable to wild swings in the prices of platinum group metals (PGMs).

There are several reasons for this, including an increasingly efficient use of metals – meaning that demand doesn’t grow at the same pace as industrial activity – and a rising contribution from recycled platinum. As a consequence, supply consistently exceeds demand, translating into platinum being a “surplus industry”. Producers are thus weaker than consumers, making them price takers.

To add evidence to the above, new mine supply of platinum has slipped steadily to 5.1 million ounces (Moz) in 2014 from a peak of 6.8Moz in 2006.