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Will Cliffs Natural Resources Inc (CLF) Go Bankrupt? – by Troy Kuhn (Bidnessetc.com – December 19, 2014)

http://www.bidnessetc.com/

Cliffs Naturals Resources Inc stock has plunged over the last year, and its weak balance sheet points to a grim future

Cliffs Natural Resources Inc (NYSE:CLF) has had a miserable year.

The company has lost around three-quarters of its market capitalization, and Credit Suisse recently downgraded the iron miner’s price target to $1. Cliffs stock has been targeted by investors and traders as a prime candidate for a short sell, as falling iron-ore prices continue to take a toll on the miner’s earnings.

Cliffs generates 83.7% of its revenue from iron-ore sales, and iron-ore assets represent 85.8% of its overall assets. Cliffs has been in trouble for a couple of years now.

Casablanca Capital LLC recently won a proxy fight against Cliffs, which forced several changes to the miner’s board. Cliffs’ CEO and chairman Lourenco Goncalves took over the company’s management after the proxy fight.

Casablanca was of the view Cliffs should sell off its Bloom Lake mine, along with its US coal operations and Australian mines. In August, Mr. Goncalves announced a share repurchase program of $200 million, and sold a minority holding in a graphite mining company.

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‘There will be some blood’: Will Canada’s oilpatch be able to withstand the price onslaught? – by Yadullah Hussain (National Post – December 19, 2014)

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

There will be bloodletting and pain as the impact of low oil prices reverberates through the Canadian oilpatch, but the industry is entering the downturn from a position of strength, according to analysts.

“There will be some blood on the streets, but if companies can keep their cash to debt ratios down below three times or in some cases four times at least they are not facing a bankruptcy-type position,” said Jeremy Kaliel, executive director, institutional equity research at CIBC World Markets Inc.

The dramatic decline in oil prices has caught the industry off guard, leaving companies scrambling to cut capital expenditures and dividends and redrawing their 2015 plans.

The U.S. oil and gas industry is already feeling the heat as much of the shale boom was fuelled by a diet of cheap debt that looked affordable at US$100 per barrel. With U.S. crude now edging towards US$55, investors have fled.

“Some of these companies have up to 75% of their market cap wiped out,” said Rick Chamberlain, managing director at Houston-based Berkeley Research Group. “The ones that leveraged didn’t make the right financial decisions.”

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Canada needs to defend its own security interests in the Pacific, instead of relying on Americans – by Matthew Fisher (National Post – December 19, 2014)

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

The great ditherer, U.S. President Barack Obama, has finally begun his vaunted Asian pivot.

More top-of-the-line American fighter jets are to be based in the western Arctic, Hawaii and Asia. Submarines and surface warships, including an aircraft carrier, are being permanently repositioned right now from the Atlantic to the Pacific.

Australia, Japan, South Korea and half a dozen other Australasian countries have been spooked by Beijing’s territorial claims to just about all of the South China Sea and much of the East China Sea, and by its determination to project power and national prestige into the Pacific by building a vast fleet of new warships, including an aircraft carrier and scores of diesel-electric and nuclear submarines that can be armed with long-range cruise missiles.

The Harper government has not been shy about telling Canadians that they are citizens of a Pacific nation. Yet its response to China’s military priorities, which much of the world considers to be the overriding security dilemma of the 21st century, has been virtually non-existent aside from slightly enhancing the country’s slim contribution to U.S.-led military games in the Pacific.

Security there is not being discussed at any level by the government or by the opposition, although it is a subject of considerable and growing concern to Canada’s admirals and generals. Nor has Canada purchased anything for the military because of security tensions over its western horizon.

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Natural Resources Minister Greg Rickford says Ring of Fire oversight body needs overhaul – by Peter Koven (National Post – December 19, 2014)

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

TORONTO – The Ontario government wants Ottawa to pony up $1 billion for the massive “Ring of Fire” mineral belt, but the federal natural resources minister is warning that key structural challenges still need to be overcome.

Foremost among these is the fact Ontario has stacked the four board seats of the Ring of Fire’s development corporation with nothing but provincial bureaucrats. They are responsible for overseeing infrastructure development in the region.

“We’ve got a problem with that,” Greg Rickford said in an interview. “That’s not a responsible way to deal with taxpayers’ money.”

The Ring of Fire, named after the famous Johnny Cash song, is a vast but very remote mineral belt located in Ontario’s James Bay Lowlands. The region is thought to hold about $60-billion worth of metals, but the federal and provincial governments need to overcome enormous infrastructure challenges to draw investment from the mining sector, especially in an environment of falling commodity prices.

Queen’s Park committed $1 billion to building infrastructure, and has waged a very public campaign asking Ottawa to match it through the federal Building Canada infrastructure fund.

“Your commitment to providing matching federal funding is key to strengthening investor confidence for development of the [Ring],” Ontario mining minister Michael Gravelle said last week in a letter to Mr. Rickford.

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Sherritt International stock soars on U.S.-Cuba deal, but still business as usual for Canadian firms in Cuba – by Peter Koven (National Post – December 18, 2014)

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

TORONTO – In the short-term, the diplomatic breakthrough between the United States and Cuba changes very little for Sherritt International Corp. and the dozens of other Canadian companies active in Cuba. But a potential lifting of the U.S. embargo would have a transformative impact on them.

Sherritt’s stock jumped more than 26% on Wednesday as the two countries re-established diplomatic ties. The reaction was not surprising, as the Toronto-based miner has always had a “Cuban discount” baked into its stock. Sherritt is the biggest foreign investor in the Communist state by a huge margin. Its shares closed at $2.87, up 60¢ in Toronto.

“There’s always been this uncertainty around political risk in Cuba as a result of the Cuba-America relationship,” chief executive David Pathe said in an interview. “And if this can help alleviate that, we think it’s a positive development for Cuba and for us.”

Nonetheless, it is largely irrelevant to the company’s business interests. The U.S embargo, which remains in place, prevents Sherritt from having any business dealings with companies inside the U.S., including banks. And the U.S. Helms-Burton Act prevents some of Sherritt’s directors and officers from entering the country.

Many experts see Wednesday’s news as the first step towards scrapping those policies.

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Nickel boss: ‘Economic benefits of CETA outweigh the criticism’ (EurActiv Germany – December 18, 2014)

http://www.euractiv.com/

The free trade agreement between the EU and Canada (CETA) will provide European companies with long-term access to essential raw materials, Nickel Institute President Tim Aiken says, hoping to create more pro-business EU laws with CETA. EurActiv Germany reports.

Tim Aiken is President of the Nickel Institute, the global association of the world’s primary nickel producers. Aiken took part in the EurActiv Workshop “Europe+Canada”.

He spoke with EurActiv Germany’s Dario Sarmadi.

The CETA Free Trade Agreement between EU and Canada has been criticised especially in Germany and France because of the Institutional State Dispute Settlement clause. Do you think the clause should be removed?

The protection of investors is an important building block of the CETA Agreement, which provides both Canadian companies in Europe and European companies in Canada with a safeguard for their investments. Currently, it represents a hurdle for the debate within Europe. However I am convinced that the hurdle will be overcome given that the economic benefits of the CETA agreement for industry and consumers outweigh the criticism.

What opportunities does the CETA agreement offer to the raw materials industry?

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Vale Loses Bid to Toss Rio Tinto Suit Over Guinea Mining – by Patricia Hurtado (Bloomberg News – December 17, 2014)

http://www.bloomberg.com/

Vale SA lost a bid to dismiss Rio Tinto Plc (RIO)’s suit alleging it conspired with Israeli billionaire Beny Steinmetz and his BSG Resources Ltd. to steal rights to the world’s biggest untapped iron-ore deposit by bribing officials in Guinea.

Rio Tinto accused Vale of passing confidential information it obtained during discussions the two companies had about Vale buying a stake in the Guinea property to Steinmetz and BSGR. Steinmetz, BSGR and Vale used that information to advance their own bid for the mining rights, Rio Tinto said in a complaint filed last year in federal court in New York.

U.S. District Judge Richard Berman in Manhattan today rejected Vale’s argument that the suit should have been brought in the U.K. because the two companies had agreed to take any dispute to an English court.

The judge cited “legitimate reasons” for keeping the case in the U.S., including Rio de Janeiro-based Vale’s alleged conduct in furtherance of the racketeering conspiracy, such as meetings between the company and London-based Rio Tinto that occurred in New York.

Berman also pointed to an existing federal investigation by Manhattan U.S. Attorney Preet Bharara relating to whether there was a scheme to siphon off Guinea’s mineral wealth.

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Northwestern Ont. transmission line may threaten caribou habitat (CBC News Thunder Bay – December 16, 2014)

http://www.cbc.ca/news/canada/thunder-bay

A new report says caribou in Ontario’s boreal forest are facing increasing man-made threats — and specifically points out a proposed transmission line running between Dryden, Ignace and Pickle Lake.

Anna Baggio of the Canadian Parks and Wilderness Society’s Wildlands League said the route would disturb prime caribou habitat.

“Let’s not place permanent infrastructure in these really hammered southern caribou ranges,” she said. “And if you have to build some of this infrastructure — if it’s an absolute imperative — then at least situate it along an existing highway.”

Baggio said the province needs to do a better job of living up to its commitment to protect woodland caribou. “If we can protect woodland caribou habitat, then we can protect the habitat of a whole other suite of species,” she said.

“If we don’t do a good job on Boreal caribou, it’s sort of like a canary in the coal mine for us … It shows us that our practices and our intentions in the Boreal forest are not where they need to be.”

Baggio said the notion of ploughing “a transmission line through some of the best remaining intact caribou habitat … is perplexing.

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Education Report Shows Failures in Federal Education Program – by James Murray (Netnewsledger.com – November 30, 2014)

http://www.netnewsledger.com/

THUNDER BAY – It is a stark indication of the failure of the federal government, and a grim look to the future for Canada’s First Nations young people.

More shocking, is the quiet admission by the Canadian Government that with the grades many of the youth attending schools on Canada’s First Nation reserves, the majority of students are not getting the grades that would allow them to succeed at college or university.

It is the federal government’s dirty little secret.

Timmins James Bay Member of Charlie Angus shares, “We learned the shocking news of the failures of literacy and numeracy in First Nation schools. In the Ontario region, students who participated in provincial standardized testing in 2013-2014 ended up with an average literacy score of 21 per cent for boys and 32 per cent for girls. The numeracy rate was a mere 18 per cent for boys and 20 per cent for girls”.

The results of First Nation student’s on-reserve who participated in provincial standardized testing show that Ontario has a long ways to go to catch up. The literacy rates for elementary school students in Ontario are a very low twenty-one per cent for boys and thirty-two per cent for girls.

That is well below the provincial average for off-reserve schools. It is shockingly low.

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Despite rulemaking ban, US DOI will continue sage grouse fight – by Dorothy Kosich (Mineweb.com – December 18, 2014)

http://www.mineweb.com/

New Consolidated and Further Continuing Appropriations Act gives U.S. miners some breathing room from ESA and “Waters of the U.S.” designations.

RENO (MINEWEB) – After President Obama signed a $1.1 trillion omnibus bill into law, Interior Secretary Sally Jewell Wednesday attacked the rider that prohibits the U.S. Fish & Wildlife Service from writing and issuing rules related to the sage grouse, which could stymie new mining development and expansion of current mining operations in 11 Western states.

The rider for the Consolidated and Further Continuing Appropriations Act of 2015 imposes a one-year ban on new Endangered Species Act protection for the sage grouse. The rider was introduced by Rep. Mark Amodei, R-Nevada, and former president of the Nevada Mining Association, which includes a number of major U.S. gold mines within its membership.

Jewell declared, “It is disappointing that some members of Congress are more interested in political posturing than finding solutions to conserve the sagebrush landscape and the western way of life. Rather than helping the communities they profess to benefit, these members will only create uncertainty, encourage conflict and undermine the unprecedented progress that is happening through the West.”

“The consequence of this rider is that it prevents the Service from finalizing a rule that would provide certainty to landowners, giving them assurance that they can continue economic activities compatible with the conservation of the species, such as properly managed livestock and ranging activities,” said Jewell’s statement.

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Activist launches boardroom battle over fees to mining financier – by Jacquie McNish (Globe and Mail – December 17, 2014)

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.

Globe-trotting junior mining financier Stan Bharti has been targeted by a shareholder activist in a boardroom battle that could test the limits of compensation at money-losing companies.

Mr. Bharti, through his private, family-owned Toronto company Forbes & Manhattan, manages a large portfolio of publicly listed resource startups with mostly undeveloped properties in such remote corners as Kurdistan, Ethiopia and Mongolia. Mr. Bharti and a close-knit group of executives and directors have pocketed millions of dollars in consulting fees, bonuses and other payments at a time when a number of companies managed by Forbes & Manhattan have suffered declining financial health and stock performance.

His roster of advisers and directors includes retired Canadian major-general Lewis MacKenzie, former federal cabinet minister Pierre Pettigrew and Canada’s former ambassador to Iran, Ken Taylor. Mr. Bharti’s most prominent adviser, CNN talk show host Larry King, described himself in a Forbes & Manhattan promotional video as a global ambassador. “I provide the contacts, Stan does the close,” he said. which “equals success.”

In recent years, Mr. Bharti and his family have hosted lavish investor conferences at exclusive resorts, in Mexico and Brazil, featuring vodka-cooling ice sculptures and high-profile businessmen such as Eike Batista and Jim Rogers.

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NEWS RELEASE: Barrick to Suspend Operations at Lumwana Following Passage of New Mining Royalty

TORONTO, ONTARIO–(Marketwired – Dec. 18, 2014) – Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) today announced that the company will initiate procedures to suspend operations at the Lumwana copper mine in Zambia following the passage of legislation that raises the royalty rate on the country’s open pit mining operations from six percent to 20 percent.

The new taxation regime, which is expected to go into effect on January 1, 2015, eliminates corporate income tax, but imposes a 20 percent gross royalty on revenue without any consideration of profitability.

“The introduction of this royalty has left us with no choice but to initiate the process of suspending operations at Lumwana. Despite the progress we have made to reduce costs and improve efficiency at the mine, the economics of an operation such as Lumwana cannot support a 20 percent gross royalty, particularly in the current copper price environment,” said Co-President Kelvin Dushnisky .

“We sincerely regret the impact this will have on our people, as well as the communities and the businesses that depend on Lumwana, and we remain hopeful that the government will consider an alternative solution that will allow the mine to continue operating,” said Co-President Jim Gowans .

In the meantime, the company will initiate procedures to transition Lumwana to care and maintenance. Major workforce reductions are planned to commence in March, following the legally required notice period.

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UPDATE 1-Miner Sherritt says U.S. exports possible if Cuba embargo lifts – by Narottam Medhora (Reuters U.S. – December 17, 2014)

http://www.reuters.com/

Dec 17 (Reuters) – The United States move to normalize relations with Cuba could pave the way for Sherritt International Corp to export nickel and cobalt to one of the biggest markets in the world, the miner’s Chief Executive David Pathe told Reuters.

Sherritt shares jumped as much as 36 percent on Wednesday after President Barack Obama moved to thaw a five-decade freeze in relations between the two countries and said he would speak to the U.S. Congress about lifting the U.S. embargo on Cuba.
Toronto-based Sherritt is the largest independent natural resources company in Cuba and operates the Moa nickel mine in the eastern part of the Caribbean island state.

Due to the Cuban origin of its nickel and cobalt, the company is currently unable export to the United States, even though the metals are refined in western Canada.

“If the embargo were to be lifted, we could export some of that nickel and cobalt into the U.S. market, which is obviously one of the biggest markets in the world,” CEO Pathe said in an interview.

“It would also give us access to U.S. suppliers for mining equipment and supplies and services for our oil and gas industries.”

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Venezuela restarts nickel output at asset taken over from Anglo – by Silvia Antonioli (Reuters U.K. December 17, 2014)

https://uk.finance.yahoo.com/

LONDON, Dec (Shanghai: 600875.SS – news) 17 (Reuters) – Venezuela has restarted production from the Loma de Niquel ferronickel asset it took from mining giant Anglo American (LSE: AAL.L – news) in 2012 after cancelling its licenses, data from an industry body showed this week.

Information on Venezuela is patchy but the International Nickel Study Group (INSG) numbers indicated that the country produced 2,700 tonnes of nickel in the first 10 months of this year, after producing nothing in 2013.

Loma de Niquel is Venezuela’s sole nickel producing asset. At full capacity it would produce almost 1 percent of the world’s nickel output.

Diversified miner Anglo had a 91.4 percent stake in Loma de Niquel until 2012, when the Venezuelan government under late president Hugo Chavez cancelled 13 of its concessions and refused to renew three others, forcing the company to abandon its operations in the country.

Nickel production from Venezuela fell from 8,100 tonnes in 2012 to nothing in 2013. In 2011 it had produced over 14,000 tonnes.

The data shows that production resumed at a rate of 200 tonnes per month in January and increased to 300 tonnes per month from April.

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Funds available for grassroots exploration projects – by Ian Ross (Northern Ontario Business – December 17, 2014)

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. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

It’s a grim market reality for mineral explorationists trying to raise capital for their projects. But there’s one tool available to help prospectors at the grassroots levels with their costs in working their claims.

The Ontario Exploration Corporation (OEC) is a for-profit entity overseen by the Ontario Prospectors Association that allows successful applicants to access as much as $85,000 to fuel their work.

The OEC was established in 2002 to invest in mining lands that may produce prospects with high economic potential. The three-phase program delivers financial assistance in exchange for a royalty on the lands, up to 1.5 per cent net smelter return, which prospectors can buy back up to 11 years after receiving the funds.

The net smelter return (NSR) refers to revenues expected from the mill feed, taking into consideration mill recoveries, transport costs of the concentrate to the smelter, treatment and refining charges, and other deductions at the smelter.

That hitch isn’t always popular in the prospecting community, said Garry Clark, executive director of the Ontario Prospectors Association (OPA), who admits the program is underutilized.

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