Republic of Mining

Friedland’s Ivanhoe Gets South Africa Platinum Mine Go-Ahead – by Franz Wild (Bloomberg News – November 5, 2014)

November 6, 2014

http://www.bloomberg.com/

Billionaire Robert Friedland’s Ivanhoe Mines Ltd. (IVN) gained the most in 17 months after overcoming local opposition to get final approval to build one of the world’s biggest platinum mines in South Africa.

The country’s Department of Mineral Resources signed off on the license to produce platinum-group and base metals at the $1.6 billion Platreef project in the northern Limpopo province for a renewable 30-year period, the Vancouver-based company said in a statement today.

The authorization “signals the South African government’s determination to grow our country’s economy,” Mines Minister Ngoako Ramatlhodi said, according to the statement. “The Platreef Project will attract foreign capital, create much needed jobs and contribute significantly to socio-economic development in areas surrounding the project.”

The approval means Ivanhoe’s local unit, Ivanplats, will scrap a plan to cut jobs at Platreef, it said. The company had initiated the process because it said it didn’t have a definite date to start mining.

Ivanhoe jumped the most intraday since May last year, climbing 15 percent to trade at 93 Canadian cents by 10:29 a.m. in Toronto.

Local Prosperity

Keystone XL in best position ever to get Washington’s approval – by Claudia Cattaneo (National Post – November 6, 2014)

November 6, 2014

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

Canadian energy stocks got a big boost Wednesday from the Republican sweep in the United States’ mid-term elections, and for good reason: TransCanada Corp.’s proposed Keystone XL pipeline is in the best position it’s ever been to finally get Washington’s approval.

Republicans, who are now in control of both the U.S. Senate and the U.S. House of Representatives, are expected to move quickly to get approval for KXL, either in stand-alone legislation or by attaching the pipeline’s approval to another bill.

“I think Keystone will be one of the first bills we’ll be able to put up in the new Congress,” John Hoeven, the Republican Senator from North Dakota, told Reuters.

“I’ve got a bill right now that’s got about 56 co-sponsors … and with the election results, we’ll have over 60 who clearly support the legislation.”

The pipeline could also be included in other legislative vehicles, such as bills involving the budget, tax reform, the debt ceiling, energy efficiency or infrastructure.

It helps that there is a new mood in Washington for building consensus.

Gold firms plan drastic cuts to stay afloat as bullion sinks – by Silvia Antonioli and Nicole Mordant (Reuters India – November 6, 2014)

November 6, 2014

http://in.reuters.com/

LONDON/VANCOUVER Nov 6 (Reuters) – Struggling gold producers plan increasingly drastic measures such as scrapping dividends, cutting jobs, halting projects and shutting mines to survive the latest price plunge, but not all of them will make it.

Gold tumbled to a more than four-year low of $1,137.40 an ounce this week, rekindling memories of last year’s 28 percent drop to $1,196. That fall put an abrupt end to years of over-spending on expansion projects and forced producers to cut costs.

Gold prices recovered early in 2014, but the slide in the past three months to new lows will force companies to step up their efforts to cope.

According to Citi analysts, about three quarters of gold mining companies burn cash at spot prices just below $1,200 on an all-in cost basis, which includes head office, interest, permitting and exploration costs.

Buenaventura, Medusa and Iamgold are among the highest-cost producers with all-in costs well above $1,300, a Citi note to investors said.

“Everyone has started now to appreciate that the music has stopped and there are only so many chairs,” Mark Bristow, chief executive of gold miner Randgold, said in an interview. He said he was frustrated that not much high-cost production had been shut down so far.

Studies confirm mining as an economic driver – by Len Gillis (Timmins Daily Press – November 6, 2014)

November 6, 2014

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Timmins Chamber of Commerce president Al Thorne said he can only be encouraged by the fact the province has helped to finance a couple of in-depth reports that are favourable to Ontario’s mining industry.

One of those studies outlines the value of the gold mining industry, while the second identifies the economic importance of the mining supply industry.

Timmins is considered a leader in both of those sectors. The first report, recently released by the Ontario Mining Association (OMA), outlines the economic impact for the creation a new gold mine in Northern Ontario. It was authored by Peter Dungan and Steve Murphy of the Rotman School of Management at the University of Toronto.

The second report, produced by the Canadian Association for Mining Equipment and Services (CAMESE) and released last week, looks at the challenges and opportunities for the mining supply and service sector in Ontario.

It also recommends more tracking of the economic impact of the mining supply and service sector to better understand its importance. The reports were released just in time for the Meet The Miner’s event held at Queen’s Park. The event is held annually to keep the government apprised of the contributions and concerns of Ontario’s mining industry.

Mining supply, services sector contribute 41K jobs: Study – by Jonathan Migneault (Sudbury Northern Life – November 05, 2014)

November 6, 2014

http://www.northernlife.ca/

In 2011, Ontario’s mining supply and services sector contributed $3.9 billion to the province’s gross domestic product, and sustained around 68,000 direct and indirect jobs, according to to a new study published by the Canadian Association of Mining Equipment and Services for Export (CAMESE).

CAMESE managing director Jon Baird said the study’s finding are historic, because economic contributions from the mining supply and services sector had never been studied to such a degree.

“Nothing was known, or next to nothing was known about the economic impact of mining supply before this survey,” Baird said. The association partnered with PricewaterhouseCoopers to analyze questionnaires it sent out to 913 supply and service companies across Ontario.

The Pan Ontario mining supply and services sector economic impact study determined 41,000 people in the province are directly employed by mining supply and services companies, while another 27,000 people rely on the sector indirectly, as suppliers or service providers themselves.

Around 78 per cent of the companies that responded to the survey reported doing some business outside of Ontario, while 70 per cent of respondents did business outside of Canada.

Hampton to advise federal NDP on Ring of Fire – by Carol Mulligan (Sudbury Star – November 6, 2014)

November 6, 2014

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

A self-confessed “recovering politician”, who was Ontario New Democratic Party leader for 13 years and represented Kenora-Rainy River for 24 years, has been appointed special advisor to federal NDP Leader Thomas Mulcair for the Ring of Fire.

Howard Hampton has worked the last three years for Fasken Martineau law firm, advising mining and forestry companies in Northern Ontario about how to work with First Nations.

Since 2011, Hampton has been involved in discussions with First Nations, mining companies such as Cliffs Natural Resources and Noront Resources, and engineering firms that conduct environmental assessments and do mine construction.

While Hampton will be contracted to advise the federal NDP, he said he has watched in recent years as the Government of Ontario has “dropped the ball a number of times and made a number of miscues” in trying to develop the chromite deposits 540 kilometres northeast of Thunder Bay.

His take on the federal is that “it is just not engaged” in Ring of Fire discussions, said Hampton, and has been largely absent from them. “Governments are supposed to show some leadership and governments are supposed to bring people together. That hasn’t happened,” he said in a telephone interview.

Some progress on Ring: Chamber – by Carol Mulligan (Sudbury Star – November 6, 2014)

November 6, 2014

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

The Ontario Chamber of Commerce is at work on a report, grading the Government of Ontario on its performance on 13 steps it recommended in February the province take to develop the Ring of Fire.

The goal of the first report, Beneath the Surface: Uncovering the Potential of Ontario’s Ring of Fire, was to raise awareness about the impact mining the Ring of Fire would have on the economies of Ontario and Canada.

Josh Hjartarson, vice-president of policy and government relations for the Ontario chamber, said governments’ priorities are determined by the pressure people put on them, so his group is trying to “generate some virtuous pressure on all levels of government.”

Hjartarson compares the Ontario chamber’s public awareness campaign to what Canadian petroleum producers did to promote the Alberta oil sands. Many observers have compared the importance of the Ring of Fire on a national scale to the oil sands and Churchill Falls generating station.

Petroleum producers successfully turned the “this is just an Alberta play to this is of national importance,” said Hjartarson, “and the Ontario Chamber of Commerce is trying to do that.”

NEWS RELEASE: KWG EXTENDS TIME TO COMMIT TO FURTHER BLACKHORSE PROGRAM

November 6, 2014

Toronto, Canada, November 5, 2014 – KWG Resources Inc. (TSXV: KWG; Frankfurt: KW6), announces that by mutual agreement of the parties, KWG and Bold Ventures Inc. (“Bold”) have extended to December 30, 2014, the deadline by which KWG must provide that it intends to make the $700,000 option payment due February 7, 2015 under the KWG/Bold Option Agreement and expend an aggregate of $8,000,000 on the property by March 31, 2015. KWG has to date incurred $5.8 million of the $8.0 million required expenditure and is proceeding with a prospectus offering of securities to fund the additional work. If the notice is not delivered within the extended time, the Option will be terminated.

“Recent events have dramatically altered the current value of opportunities in the Ring of Fire,” said KWG President Frank Smeenk. “That has exacerbated a difficult exploration and development financing environment for those of us working there. We need some time to discuss these circumstances with all the participants affected by this new reality.”

About KWG: KWG has a 30% interest in the Big Daddy chromite deposit and the right to earn 80% of the Black Horse chromite where resources are being defined. KWG has also acquired patent interests, including a method for the direct reduction of chromite to metalized iron and chrome using natural gas. KWG also owns 100% of Canada Chrome Corporation which has staked claims and conducted a $15 million surveying and soil testing program for the engineering and construction of a railroad to the Ring of Fire from Exton, Ontario.

NEWS RELEASE: Mining Sector: Aligning Certain Market Factors Should Double Mergers and Acquisitions

November 6, 2014

TORONTO and MONTRÉAL, Nov. 5, 2014 /CNW Telbec/ – A new report from international firm Grant Thornton indicates that the mining sector will herald a new era in mergers and acquisitions (M&A) as a near perfect alignment of factors takes place. Following a slow period for transactions, in which last year’s deal volumes failed to breach the $90 billion[1] mark, Grant Thornton’s research and analysis suggests that a fertile environment will lead to a doubling in the value of M&A in the mining sector compared to 2013.

Gathering Momentum, Grant Thornton’s new report, attributes the resurgence of M&A to the confluence of four main factors, identified through feedback from over 250 senior mining executives globally. The first is that with one-in-ten junior mining exploration companies likely to enter administration and a quarter of major mining companies anticipating challenges with financial covenants, the market can expect significant quantities of distressed assets and low valuations.

There is also a ripe environment for matchmaking, with a third of executives at mining companies stating that they are likely to make an acquisition (35% junior mining exploration companies and 32% major companies) and approximately the same amount showing an appetite for selling – believing that their company will either be sold or undergo a partial sale (36% junior mining exploration companies and 27% major companies/other). Furthermore, lower commodity prices are identified by the report as a driver for M&A; pushing companies to band together to generate scale and lower productions costs in order to remain competitive.

Technology slashes power use at Glencore’s huge S African chrome smelter – by Martin Creamer (MiningWeekly.com – November 5, 2014)

November 5, 2014

http://www.miningweekly.com/page/americas-home

STEELPOORT, Limpopo (miningweekly.com) – The Lion ferrochrome smelter owned and operated by the Glencore Merafe Chrome Venture, uses 37% less electricity than conventional ferrochrome processes to produce the equivalent volume of ferrochrome.

In addition, the smelter needs far less coke than conventional smelters as well as using significant amounts of locally produced, lower cost anthracite and char. (Also see attached video).

Had the Lion operation not installed Premus technology, it would have needed an additional 1 776 MWh to produce the same volume of ferrochrome. Instead, all four furnaces collectively utilise some 4 800 MWh a day. (Also see attached video)

The efficient use of energy – significantly enhanced through pelletising to cope with increasing volumes of fine chrome ore, in-house training programmes to overcome skills shortages, the proximity of the Port of Maputo, the use of more cost-effective upper group two (UG2) chromite ore recovered from platinum tailings, as well as radically reduced use of expensive coke – are the key sources of competitive advantage that place both phases of Lion – known as Lion I and Lion II – in a cost-leadership position.

The UG2 ore is sourced from the nearby Mototolo mine, a platinum joint venture between the London-, Hong Kong- and now also Johannesburg-listed Glencore, black economic-empowerment (BEE) partner Kagiso Tiso and Anglo American Platinum.

NEWS RELEASE: Ring of Fire First Nations Demand Respect for their Laws and Treaty

November 5, 2014

The First Nations whose lands and resources will be most affected by the proposed Ring of Fire development met today with Noront Resources and the provincial government to discuss the requirements for Noront’s proposed Eagle Nest Project to proceed.

Marten Falls First Nation, Webequie First Nation and Neskantaga First Nation leadership delivered a strong and united message to Noront and the province. For the Eagle Nest Project to proceed Noront must:

a) respect individual First Nation protocols and informed decision‐making;
b) resolve outstanding capacity funding issues with First Nations;
c) enter into exploration agreements with the affected First Nations; and
d) respect the Regional Framework Agreement between First Nations and Ontario which requires working together with the First Nations on an enhanced environmental assessment for Noront’s Eagle Nest Project.

“The three First Nations agree that there has not been meaningful consultation and engagement on Noront’s permits and proposed development,” said Neskantaga First Nation Chief Peter Moonias. The Noront permits and mining project require our free, prior and informed consent.

Mining sector ripe for increased M&A activity: report (Canadian Manufacturing.com – November 5, 2014)

November 5, 2014

http://www.canadianmanufacturing.com/

TORONTO and MONTRÉAL—Canada’s mining sector will see a new era in mergers and acquisitions (M&A) as a near perfect alignment of factors takes place, according to a study released by advisory firm Grant Thornton.

Following last year’s tepid M&A performance in which deal volumes failed to breach the $90 billion mark, Grant Thornton’s report Gathering Momentum suggests a fertile environment will lead to a doubling in the value of M&A in the mining sector compared to 2013.

The resurgence of M&A is predicted to come from four main factors identified through feedback from 250 senior mining executives:

One-in-ten junior mining exploration companies are likely to enter administration, and a quarter of major mining companies anticipate challenges with financial covenants, resulting in significant numbers of distressed assets and low valuations
Excellent environment for matchmaking, with a third of executives at mining companies looking to make an acquisition (35 per cent of junior mining exploration companies and 32 per cent of major companies)
Approximately the same amount of firms are showing an appetite for selling (36 per cent of junior mining exploration companies and 27 per cent of larger companies)
Lower commodity prices will be a driver for M&A, pushing companies to band together to generate scale and lower productions costs

Iron Drops to Lowest Since 2009 as APEC Curbs Dent Demand – by Jasmine Ng (Bloomberg News – November 5, 2014)

November 5, 2014

http://www.bloomberg.com/

Iron ore declined to the lowest level in more than five years as China ordered some steel mills to reduce production, curbing demand in the world’s biggest user just as increased supplies exacerbate a global surplus.

Ore with 62 percent content delivered to Qingdao fell 2 percent to $76.46 a dry metric ton today, the lowest price since September 2009, according to data from Metal Bulletin Ltd. The drop extends two weeks of losses at the end of October.

The raw material lost 43 percent this year, underperforming all 22 members of the Bloomberg Commodity Index, as producers including BHP Billiton Ltd. expanded supplies and spurred the glut. Some mills in the largest buyer were ordered to suspend output before a summit of world leaders at the Asia Pacific Economic Cooperation forum in Beijing. A recovery in prices may take as long as 18 months, according to Anglo American Plc.

“Steel mills in north China should be working at a reduced rate due to the APEC meeting,” Christian Lelong, an analyst at Goldman Sachs Group Inc. in Sydney, said today before the price was released. “That should be playing a role” in iron ore’s drop, he said by e-mail.

Asia’s biggest economy will host the APEC gathering in the capital from Nov. 7-12, prompting authorities to order factory shutdowns to try to ensure clean air during the event.

Gold’s last pillar of support — Asian buyers — crumbles – by John Shmuel (National Post – November 5, 2014)

November 5, 2014

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

Gold prices plunged to a more than four-year low Tuesday, as the last pillar of price support — Asian demand — appears to have crumbled.

Prices on the Shanghai Gold Exchange, which usually trade at a premium to gold prices in the west, are trading at a US$1-$2 discount this week. Gold futures on the Comex in New York for December delivery fell 0.2% Tuesday, to close at US$1,167.20 an ounce, marking the fifth straight trading decline and the lowest settlement price since July 28, 2010.

In the past, when the price gap between east and west prices closed, Asian buyers would swoop in and buy the discount. But analysts note this is not happening yet, even as a peak buying season has taken hold in China.

“We’ve not seen any significant physical demand on the back of this (price drop),” said Victor Thianpiriya, analyst at ANZ in Singapore. “That’s a worrying sign for prices as Chinese buying was really the only thing supporting the market on sell-offs last year.”

Gold prices in China typically rise at this time of year and trade at a premium to western prices ahead of the Lunar New Year holiday in February, which sees a large uptick in physical gold buying, particularly jewelry.

B.C.’s mines minister in Alaska to ease concerns over provincial mining – by Dirk Meissner (Canadian Press/Winnipeg Free Press – November 5, 2014)

November 5, 2014

http://www.winnipegfreepress.com/

VICTORIA – British Columbia’s Energy Minister Bill Bennett is in Alaska to soothe concerns about the province’s mining industry, which he says is perceived by many Alaskans as a threat to their environment and salmon fishery.

Bennett will address the annual Alaska Miners Association convention in Anchorage, and meet with state officials, commercial and sport fishing organizations and aboriginal groups during his two-day visit.

“There is this impression in some parts of Alaska that our environmental standards, compliance and enforcement efforts are not as strong as theirs,” Bennett said in an interview. “My purpose in going up there … is to talk to folks about how our process actually works. How do you get a mine permitted in B.C.”

The minister will be accompanied on his trip by Chad Day, the Tahltan Central Council president, along with senior government environment and energy officials.

Bennett said concerns about B.C.’s plans to expand its mining interests in the province’s north have heightened since last summer’s massive tailings pond failure at the Mount Polley mine in the central Interior.