Republic of Mining

PRECIOUS-Gold hits 3-1/2 week high as Yemen air strikes rattle markets – by Jan Harvey (Reuters U.S. – March 26, 2015)

March 26, 2015

http://www.reuters.com/

LONDON, March 26 (Reuters) – Gold rallied to a 3-1/2 week high on Thursday and silver rose nearly 3 percent as escalating tensions in the Middle East knocked stocks and the dollar and drove investors into assets seen as lower risk, like bullion and German bonds.

European stocks tumbled 1.3 percent, the dollar fell and oil prices leapt 6 percent after Saudi Arabia and its Gulf Arab allies launched air strikes in Yemen to counter Iran-allied forces besieging the southern city of Aden.

Spot gold hit a peak of $1,219.40 an ounce and was up 1.2 percent at $1,210.30 at 1028 GMT, while U.S. gold futures for April delivery were up $12.70 an ounce at $1,209.70.

That extended a rally in gold to a seventh session, its longest winning streak since 2012. Soft U.S. data earlier this week boosted expectations the Federal Reserve would keep interest rates low for the time being, lifting gold.

“Overnight we have seen risk aversion because of what’s going on in the Middle East, and the dollar is weak, because data has been weaker,” ABN Amro analyst Georgette Boele said. “The combination of dollar weakness and risk aversion is normally one where gold should do well.”

Matawa First Nation chiefs voice objection to Noront’s Ring of Fire purchase – by Leith Dunick (tbnewswatch.com – March 26, 2015)

March 26, 2015

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

Chief-elect Wayne Moonias says it feels like Noront Resources and the Ontario government have put a collective gun to the heads of Northern Ontario First Nations.

Moonias, who will take the reins of Neskantag First Nation on April 1, was reacting to news earlier this week that Noront Resources Inc. was maneuvering to purchase 103 Ring of Fire claims from subsidiaries of Cliffs Natural Resources, meanwhile setting a March 31 deadline to reveal the terms of reference for its environmental assessment process for claims the company had already staked.

Moonias added Matawa First Nation chiefs, who gathered Wednesday in Thunder Bay to unanimously speak out against the sale, believe the company is operating beyond a framework agreement his people signed last year with Ontario and that First Nations should have a say in the transaction.

“We’re trying to ensure that our rights are respected and protected,” Moonias said. “This is a critical time in our communities. Those days are gone when the government and industry came in and took all the resources in our community.”

The Ring of Fire, a multibillion-dollar mother-lode of chromite and other minerals, will never be developed if true partnerships aren’t formed, the chiefs said. That means First Nations must be involved every step of the way, said Aroland First Nation Chief Sonny Gagnon.

Mining private equity: It’s Davis or bust? – by Frik Els (Mining.com – March 25, 2015)

March 26, 2015

http://www.mining.com/

The number of mergers and acquisitions in the mining and metals industry declined to the lowest in a decade last year. Big deals were few and far between and the 11 deals worth more than a billion were miners buying mines. Overall 80% of deals in terms of value were made by industry insiders.

After years of talk, the private equity billions destined for the sector remain mostly on the sidelines (or are seeking greener pastures). The deals that have been pushed through from outsiders (or ex-insiders to be more precise) have been small, highly targeted and often go unnoticed (it’s called private equity for a reason).

All eyes are on Mick Davis and his $5.6 billion X2 fund to open the floodgates (or at least set the ball rolling). But the ex-Billiton CFO has so far failed to pull the trigger despite the likes of Anglo-American, BHP Billiton and Vale putting assets up for sale.

With X2 Davis, who is a cricket fanatic, appears to be taking a five-day test approach (which often ends without a result), rather than going for a quick Twenty20 win.

Still, the caution seems somewhat uncharacteristic. Davis built Xstrata over less than a decade through a series of billion dollar transactions into a company with 70,000 employees in 20 countries. Xstrata’s market value peaked in 2008 at $85 billion.

Creative destruction, eh! Why there’s no reason to fear the demise of Canadian companies – by Joe Martin (National Post – March 26, 2015)

March 26, 2015

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

Don’t worry about the demise of Canadian companies. Others will replace them and become world beaters in their fields

Some observers are concerned by the destructive nature of capitalism in Canada that has seen the demise of Nortel, the near demise of BlackBerry, and the flight of automakers to Mexico. The list goes on and on. Most educated observers are aware of the problems, fewer are aware of the creative processes that continue to breathe life into the Canadian economy.

A recent Economist article noted “A lack of larger firms means fewer jobs, and a less resilient economy.” So what has happened in the Canadian corporate sector in the past 30-plus years in terms of larger employers?

In 1980 the 10 largest non-financial corporate employers had nearly 650,000 employees. In 2013, the most recent year for which there is comparable data, the top 10 employers had over 1.1 million employees, an increase of 72% at a time when the Canadian population grew at a rate of 43%. Not all of these jobs are in Canada because Canadian businesses have become more globally oriented, but then not all the jobs were in Canada in 1980.

Eight of the 10 companies on the list in 2013 were nowhere near the top 33 years ago. Let us first look briefly at the two largest: Onex, a Canadian private equity (PE) firm and Walmart Canada, the Canadian subsidiary of the American retail colossus, and then at Magna and Alimentation Couche-Tard.

Corporate Brochure: Vale leading with innovation and out of the box thinking (Endeaver Magazine – January 2015)

March 26, 2015

http://www.littlegatepublishing.com/category/business-profiles/

Headquartered in Brazil, Vale is a global mining company that has set themselves a mission to transform natural resources into prosperity and sustainable development. Standing as the second largest producer of nickel, they are also the leaders in the production of iron-ore and present in over thirty countries across the world. The company’s footprint is as indelible as the minerals they mine and with their recent construction of the Valemax ships, their footprint is set to deepen and extend even further.

“Our operations span five continents,” Claudio Alves, Global Director Sales and Marketing says, “And are diversified across several sectors including metals, coal, fertilisers, logistics, shipping, energy and mining.”

“The industry is one of the most important in the world,” he says, “And it is up to Vale to establish parameters to determine how we conduct ourselves ethically and sustainably.”As the head of marketing and sales, Claudio is a key figure in a highly competitive and at times, controversial industry.

With much being said about the ethics of sourcing and mining limited minerals from the earth, what is seldom mentioned is that ores and the refinement of them provides vital materials for a number of indispensable items such as mobile phones, computers and even large-scale airplanes. Manufacturers of these valuable assets rely on companies like Vale to provide them with high quality ore, which Vale takes great care to source ethically and sustainably.

Ring of Fire still emerging – Editorial (Thunder Bay Chronicle-Journal – March 26, 2015)

March 26, 2015

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

When the bottom fell out of iron-ore giant Cliffs Natural Resources last year and the company’s big plans for Northern Ontario began to unravel, a competitor remarked that development in the Ring of Fire would still happen one day, “not just on Cliffs’ timetable.”

The remark was unfair because, up until the fall of 2013, Cliffs was the real deal: It had spent $500 million in pre-development work on its RoF properties, and was very close to operating the remote region’s first mine.

Few will forget Cliffs’ thoughtful RoF point-man, Bill Boor, especially his candour and willingness to field questions from all comers.

But many got carried away by the idea that Cleveland-based Cliffs, an established company that floated the prospect of 1,000-plus jobs, could pull it off, even as metal prices dropped.

Earlier this week, Noront Resources announced the move that many expected — the potential purchase of Cliffs’ RoF properties. The US$20 million deal, which includes the big Black Thor chromite deposit, is expected to close next month.

In announcing the plan, Noront president Alan Coutts wisely cautioned against any expectations that his company would be able to quickly pick up where Cliffs left off.

Matawa Chiefs Oppose Noront Ring of Fire Plans – by Staff (Netnewsledger.com – March 25, 2015)

March 25, 2015

http://www.netnewsledger.com/

THUNDER BAY ON – BUSINESS – Matawa First Nation Chiefs re-affirmed their commitment to a community based processes for Ring of Fire Development, including creating environmental protections and economic opportunities which are driven by their community members, not just industry plans.

The recent purchase announcement by Noront goes against the Matawa First Nations Unity Declaration signed in Webequie First Nation July 13, 2011.

The Chiefs have repeatedly signalled that genuine partnership in development will be the only way forward in the Ring of Fire, and Noront seems intent on driving its agenda, rather than working together.

The Matawa Chiefs are examining legal and political options on both the purchase agreement and the rumored advancing of the Environmental Assessment process beyond the draft Terms of Reference phase. These moves are seen as a barrier to future opportunities with the First Nations as well as threatening Aboriginal and Treaty Rights. The Chiefs were informed of the deal at the same time as the public, and while negotiating the next steps on an enhanced environmental assessment.

Chief Peter Moonias outlined the key reasons why the Chiefs are frustrated with Noront, “the Cliffs chromite is on our lands, we have jurisdiction here as well as Aboriginal Title and Treaty rights in the lands that hold the Cliffs chromite.

DEALTALK-Brazil’s Vale likely to sell rail, ships before mining assets – by Stephen Eisenhammer and Guillermo Parra-Bernal (Reuters U.S. – March 25, 2015)

March 25, 2015

http://www.reuters.com/

(Reuters) – Brazil’s Vale SA may find it easier to dispose of giant ships and part of its stake in a rail logistics business before selling mining assets, as the world’s top iron ore producer looks to raise cash amid a price rout, according to four sources with knowledge of the situation.

Struggling with a slump in iron ore prices, Vale presented a list to investors in December of nine possible options to raise cash. Of the options, only a coal joint venture with Japanese trading house Mitsui & Co Ltd has been announced so far.

A number of the other eight options seem increasingly challenging as the risk associated with both Brazil and mining-related investments continue to mount, said three of the sources, who sought anonymity to speak freely about the matter.

At this point, selling a group of giant ore carriers known as Valemaxes, and disposing of a part, or all, of a 43.8 percent stake in rail freight firm MRS Logística SA seem the best options for Vale, those sources said. Vale declined to comment.

“The infrastructure and logistics play could help Vale unlock value more quickly than the mining assets, which markets are not pricing fairly,” the first source said, adding that “the cash impact of the former options is not great, creating a dilemma for the company.”

NEWS RELEASE: MATAWA CHIEFS OPPOSE NORONT’S PURCHASE OF CLIFFS ASSETS, AND LACK OF ENGAGEMENT ON ENVIRONMENTAL ASSESSMENT

March 25, 2015

THUNDER BAY ON – MARCH 25, 2015: Matawa First Nation Chiefs re-affirmed their commitment to a community based processes for Ring of Fire Development, including creating environmental protections and economic opportunities which are driven by their community members, not just industry plans.

The recent purchase announcement by Noront goes against the Matawa First Nations Unity Declaration signed in Webequie First Nation June 2011. The Chiefs have repeatedly signalled that genuine partnership in development will be the only way forward in the Ring of Fire, and Noront seems intent on driving its agenda, rather than working together.

The Matawa Chiefs are examining legal and political options on both the purchase agreement and the rumored advancing of the Environmental Assessment process beyond the draft Terms of Reference phase. These moves are seen as a barrier to future opportunities with the First Nations as well as threatening Aboriginal and Treaty Rights. The Chiefs were informed of the deal at the same time as being told that the province has set an April 1 deadline for a decision on the next step in Noront’s environmental assessment for a proposed nickel mine in the Ring of Fire.

The Matawa Chiefs are well-aware that private investors are most interested in a stable and secure investment, and that none of the proposed projects will receive financing for development without the support of the First Nations. Media is invited to come speak with the nine MAtawa Chiefs at 4:00pm at the Matawa First Nation offices in Thunder Bay.

Police clash with opponents of $1.4 bln copper mine in Peru – by Mitra Taj and Marco Aquino (Reuters India – March 25, 2015)

March 25, 2015

http://in.reuters.com/

(Reuters) – Police in Peru fired tear gas and rubber bullets on Tuesday at opponents of Southern Copper’s $1.4 billion proposed Tia Maria mine in protests that threatened to further delay the project.

The company said early last month that it expected to receive a building permit by the end of March following the government’s key approval of its environmental plan last year. Peru had rejected Southern Copper’s first environmental plan amid a wave of protests that turned deadly in 2011.

Protesters on Tuesday called for the government to nix the project because they say it will pollute agricultural valleys, said rice farmer and activist Juan Carrasco, 58. “We’re going to keep protesting tomorrow and everyday until Tia Maria leaves,” Carrasco said.

Three protesters were wounded and two arrested in the clashes in Peru’s southern region of Arequipa, said local police chief Enrique Blanco. TV images showed police firing tear gas at a crowd on a highway and protesters running into nearby fields.

Blanco said between 600 and 700 protesters, mostly women, took part in the march on Tuesday – the second day of protests. Carrasco said there were at least 3,000.

Why Teck Resources should buy HudBay Minerals: Analyst (March 24, 2015)

March 25, 2015

http://www.bnn.ca/

– by Michael Chu, Producer, BNN

With rumblings in the market that Teck Resources Ltd. (TCKb.TO -2.33%) could be on the prowl for acquisitions–especially on the copper front–could HudBay Minerals Inc. (HBM.TO -0.95%) be square in the sights for the Vancouver-based base metals giant?

Analysts at National Bank Financial outline the perfect storm of events that could bring Teck and HudBay Minerals together.

“The combined company would provide; near-term growth, long-life diversified operations, and carry less financial risk. In our opinion, the possible combination of these two companies is intriguing and would result in an improved outlook for Teck Resources,” wrote Shane Nagle, metals and mining analyst at National Bank Financial in a note to clients.

Column: Noront the new king of the Ring – by Stan Sudol (Sudbury star – March 25, 2015)

March 25, 2015March 24, 2015

(L to R) Noront Team at PDAC Awards Ceremony: Glenn Nolan, Vice President, Aboriginal Affairs; Alan Coutts, P.Geo, President and CEO; Kaitlyn Ferris, Manager, Corporate Responsibility; Paul Semple, P.Eng, Chief Operating Officer; Gregory Rieveley, CPA, CA, Chief Financial Officer. (Photo by Stan Sudol)

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

Just when I was ready to title my next Ring of Fire column, “Lost and sinking in the political muskeg of the James Bay lowlands,” a corporate bolt of lightning struck Monday, when Noront Resources, with the backing of Franco Nevada Corporation, announced the acquisition of Cliffs’ chromite properties.

This is a game changer in the Ring of Fire! A Canadian company is putting cold hard cash on the table – during one of the most severe mining busts in decades – in the long-term financial belief of the economic potential of the Ring of Fire.

Franco Nevada is lending Noront U.S. $22.5 million for five years at 7% interest in return for a 3% royalty for Cliffs’ Black Thor chomite deposit and a 2% royalty for all of Noront’s other Ring of Fire properties, with the exception of their Eagle’s Nest nickel/copper/PGM mine. The stock markets seemed to be pleased with this announcement, as Noront shares closed at 48.5 cents on Tuesday, the same as Monday, up almost 37% from their closing price the previous week.

Without a doubt, this is the mining deal of the century — and/or an extraordinary fire sale.

Nevsun Resources Ltd describes reported attack on Eritrea mine as ‘act of vandalism’ – by Claire Brownell and Peter Koven (National Post – March 24, 2015)

March 24, 2015

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

Nevsun Resources Ltd. is describing an attack on its Bisha mine in Eritrea as an “ act of vandalism,” an account that contrasts starkly with African media reports saying the mine was bombed by Ethiopan fighter jets.

In a statement released Sunday, Nevsun said vandals caused minor damage to the base of a tailings thickener at the mine during the night shift on Friday, releasing water into the plant area.

But the Ethiopian news site Tigrai Online said it had confirmed a report that the Ethiopian air force bombed the mine on Friday. Sudanese newspaper Al-Sahafa was the first to report that the attack was a military operation from Ethiopia.

“The Bisha gold mine which is about 150 km from the city of Asmara is on fire and a huge fire and smoke can be seen from far away,” the reports claimed.

But Haywood Securities analyst Stefan Ioannou said he believes Nevsun’s account over the online news report. He noted that the company’s shares opened just 3% lower than Friday’s closing price of $4.55 on the Toronto Stock Exchange, suggesting most investors weren’t taking reports of an air strike very seriously either.

Brad Wall’s good potash play – by Jack M. Mintz (National Post – March 24, 2015)

March 24, 2015

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

Premier Brad Wall of Saskatchewan is now under fire for his 2015 Budget that promises a potash tax review as well as a curb on some investment incentives for the potash industry. Some are calling his bold move a “Stelmach” moment, comparing the ever-popular Saskatchewan Party’s premier to Premier Ed’s royalty review for the Alberta’s oil and gas industry in 2007-8.

‎Saskatchewan’s royalty review is far from being a comparable situation to Alberta’s. Brad Wall inherited a clumsy complicated potash royalty system devised by the NDP in 2001-2 while the Alberta royalty system was relatively well designed before Stelmach started stirring the pot.

If anything, the Stelmach government was making the system worse with proposals that increased rather than reduced distortions. Moreover, Stelmach’s play was a revenue grab while Wall has finally taken a step to clean up a messy system with the promise not to raise revenues under the review. If there is any criticism to be laid, it’s that Wall should have acted sooner.

Wall now has a unique opportunity to not only reform potash taxation but also to ensure a politically stable tax system that has the right balance between competitiveness and public revenues. The major flaws in the current Saskatchewan system are threefold.

First, the system is unfair with differential treatment of potash companies depending on whether they existed before or after 2001-2. Companies after 2002 are taxed on their volumes differently than companies operating before this time.

Cliffs Natural Resources-Noront Resources deal puts new Sudbury smelter in limbo (CBC News Sudbury – March 24, 2015)

March 24, 2015

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

Smelter plant hinged on yet to be negotiated power rates, tax dollars to access Ring of Fire

A proposal for a new smelter in Sudbury has been pushed further into limbo after Cliffs Natural Resources announced a deal to sell off its Ring of Fire assets.

The Cleveland-based company said Monday it had entered into a definitive agreement with Noront Resources to purchase its chromite deposits and associated claims for $20 million.

Then Sudbury MPP Rick Bartolucci announced in 2012 that Cliffs would be building a smelter in Capreol, north of Sudbury, to process the chromite it mined in the far north — along with hundreds of jobs. The company even started taking job applications.

However, the new plant hinged on yet to be negotiated power rates, as well as tax dollars, to access the remote Ring of Fire. Neither issue has been settled since. With the sale of Cliffs’ chromite assets and associated claims to Noront Resources, the ball is effectively in Noront’s park.

However, CEO Al Coutts said the company is focusing on mining at this point — not smelting.