Republic of Mining

Illegal mining forces Harmony to halt mine – by David McKay (MiningMX.com – October 31, 2014)

November 3, 2014

http://www.miningmx.com/

[miningmx.com] – HARMONY Gold is to shut its Kusasalethu mine on the west Rand for two weeks and send employees on leave in a bid to combat the threat to safety posed by illegal mining on its premises.

The action, aimed primarily at protecting employees at the mine which has suffered three underground fires this month, also has the affect of denting Harmony’s chances of clawing itself back to profitability.

Harmony said on October 14 that gold production in the first quarter of its 2015 financial year would be about 6% higher. It booked a full-year R1.27bn net loss (2013: – R2.35bn) in August amid falling gold recovery grades.

An underground fire broke out at Kusasalethu on October 30, and although all employees were evacuated safely, Harmony CEO, Graham Briggs, said the risk of another fire harming employees was too great a risk to bear.

“The risk of yet another underground fire is a risk that we are not prepared to take and therefore we are reverting to this temporary mine closure”, said Briggs. During the closure of the mine, Harmony would attempt to remove the illegal miners.

BHP offers little hope of revisiting giant copper mine expansion – by James Regan (Reuters U.K. – October 31, 2014)

November 3, 2014

http://uk.reuters.com/

SYDNEY – (Reuters) – Expansion by BHP Billiton’s giant Olympic Dam mine in Australia, once considered among its prized growth assets, is off the agenda due to low metals prices and productivity inefficiencies, the company said on Friday.

BHP shelved plans for a multi-billion-dollar expansion of the copper, gold and uranium mine in 2012 after a year-long study, citing a need to reign in spending as the Australian mining boom started to fade.

Since then business leaders and politicians, including Australian Prime Minister Tony Abbott, have implored BHP to reconsider its decision, hoping to alleviate job losses caused by the exit of car manufacturing in Australia.

But BHP has stood firm and on Friday reiterated its mothballing of expansion plans for Olympic Dam.

“Our immediate challenge is how we self-fund the required investment by being prudent and creative with our capital and engaging our workforce to not only reduce costs but also accelerate the initiatives that will reduce our costs,” Darryl Cuzzubbo, Olympic Dam assetpresident, said in a business speech emailed to Reuters.

Ring of Fire region needs protection – by Anna Baggio (Globe and Mail – October 31, 2014)

November 3, 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.

Re The Ring of Fire failure to ignite (Oct. 22): Reporter Rachelle Younglai deftly digs into the Ring of Fire and goes beyond the rhetoric. What’s missing, however, is the ecological context.

The Ring of Fire is located in the heart of an irreplaceable environmental treasure. This wilderness of trees, wetlands, lakes and rivers is part of the planet’s largest intact forest – the Boreal Forest. First Nations call these lands their ancestral home and have inherent rights to the land.

The region supports hundreds of plant, mammal and fish species, most in decline elsewhere, and is the continent’s main nesting area for nearly 200 migratory birds. For some species, it’s the last refuge. As one of the world’s largest storehouses of carbon, it helps keep climate change in check.

NEWS RELEASE: Duluth Metals Agrees to Acquisition by Antofagasta PLC

November 3, 2014

TORONTO, Ontario, November 3, 2014 – Duluth Metals Limited (“Duluth”, “Duluth Metals”) (TSX: DM) (TSX:DM.U) today announces that it has entered into a binding agreement (the “Acquisition Agreement”) with Antofagasta PLC (“Antofagasta”) pursuant to which Antofagasta has agreed, subject to the terms of the Acquisition Agreement, to acquire through a wholly owned subsidiary, all of the outstanding common shares of Duluth Metals by way of a friendly take-over bid or a plan of arrangement at a price of CDN$0.45 per share in cash (the “Offer”).

The Offer represents a 284% premium to the 20-day volume weighted average price of Duluth Metals’ common shares on the TSX as at October 31, 2014.

Kelly Osborne, President and CEO of Duluth commented: “We are pleased to reach an agreement with our partner Antofagasta and enter into this acquisition transaction. During a difficult period for the mining industry, Duluth has been able to negotiate a significant premium to the current market share price.”

Antofagasta has also entered into a lockup agreement with all of Duluth’s directors and officers and with Wallbridge Mining Company Limited who collectively own approximately 10.9% of Duluth’s currently outstanding common shares (136,767,985 common shares). In addition, Antofagasta, through its subsidiary, owns approximately 10.4% of Duluth’s common shares

The Acquisition Agreement contains customary deal support provisions, including non-solicitation, superior proposal and right-to-match provisions in favour of Antofagasta and the payment to Antofagasta of a termination fee of CDN$3.5 million if the acquisition is not completed in certain specified circumstances.

Halloween horror for gold price – by Frik Els (Mining.com – October 31, 2014)

November 3, 2014

http://www.mining.com/

The gold price was battered on Friday by a quadruple shot – the end US economic stimulus, a record-setting surge in equities, further falls in the crude oil price and a rampant dollar.

In lunchtime trade on the Comex division of the New York Mercantile Exchange gold for December delivery was changing hands for $1,167.30 an ounce, down more than $30 or 2.6% on the day.

In morning trade gold gapped down over 3% from yesterday’s close to a low of $1,160.50, the lowest since July 2010. Selling was particularly heavy with more than 2.5 million ounces traded by 13:00 EST.

Bullion bank Societe Generale SA’s head of commodities research Michael Haigh said the chances are increasing that gold will drop to $1,000 an ounce according to Bloomberg.

Haigh, who correctly forecast gold’s precipitous fall in 2013, singled out the shocking decline in the price of oil to below $80 a barrel and its effect on inflation as “adding more ammunition to the downward pressure on gold.”

Mount Polley mine reopening is an issue of credibility – by Justine Hunter (Globe and Mail – November 3, 2014)

November 3, 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.

VICTORIA — It is not too soon, in Williams Lake, to talk about reopening the Mount Polley mine.Not three months has passed since the tailings pond dam failed, releasing millions of cubic metres of waste into central British Columbia waterways.

The province and the company are still working on a cleanup plan that will take years to fully implement. It will be months, at least, before any clear explanation for the dam failure is made public.

But Williams Lake city council, mindful of the uncertain future for hundreds of mine workers, is drafting a letter to Premier Christy Clark – expected to be approved this week – to urge her to get the gold-copper mine back to full operation.

The mine is 55 kilometres from Williams Lake, and many of its workers and suppliers reside in the community. The province has launched three investigations into the ecological disaster, and has cautioned against rushing to judgment on just what happened and why.

“It is going to be really important that none of us form conclusions until we get to the end of those investigations,” Environment Minister Mary Polak said last month.

Join Manitoba: Northwest Ontario would prosper by linking with our neighbour – by Karl Lehto (Thunder Bay Chronicle-Journal – November 1, 2014)

November 3, 2014

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

1. We have three powerful cabinet ministers in Northwestern Ontario representing both federal and provincial governments — Greg Rickford, Mike Gravelle, and Bill Mauro — yet we are still floundering with indecision and with poorly planned decisions made for us in our capitals.

2. Ontario has a mysterious and stubborn resistance to interprovincial trade and co-operation, particularly with power from Manitoba and Quebec, yet the reasons are never explained to us.

3. We have a big problem: Toronto is just too far away and almost totally focused on southern Ontario with its millions of people and associated problems. Queen’s Park is broke, broken and struggling.

4. We have another big problem in the Northwest which affects each and every one of us. Cheap, clean and safe power is the critical economic engine that drives us all. Cost is presently spiralling totally out of control.

In 11 years irrational energy planning has tripled our power rates and we are billions of dollars worse off today. Manitoba has offered a great alternative which we ignore.

5. Historically, we in the Northwest have been treated as a hinterland with a bone occasionally thrown at us to keep us in line.

Noront says it needs the province to approve its permits if any work can get done in the Ring of Fire – by Jamie Smith (tbnewswatch.com – October 31, 2014)

November 1, 2014

http://www.tbnewswatch.com/

THUNDER BAY — The provincial government needs to respond if a potential project in the Ring of Fire will see any work this winter.

Nortont’s vice-president of Aboriginal Affairs Glenn Nolan said if the company doesn’t get its permits soon, a whole season of work to get its Eagle’s Nest project off the ground will be lost. New exploration, laying the groundwork for the project’s East West road from Pickle Lake and other work can only begin if the company gets permits so it can put together a plan and start purchasing equipment and use the short winter road season to start moving it.

Timelines and the whole project itself will be ambiguous if the province doesn’t respond soon Nolan said during a Thunder Bay Chamber of Commerce lunch Friday afternoon where Northern Development and Mines Minister Michael Gravelle laid out his government’s vision for the North.

“You’re looking at a whole generation of lost opportunity,” Nolan said. Nolan said the company and province have different timelines. But Noront needs some guarantees to assure investors that the Eagle’s Nest will be developed.

“We need the government to really look at the applications that we put forward so these permits are granted,” Nolan said.

Canadian gold stocks crushed amid bad earnings, bad prices – by Peter Koven (National Post – October 31, 2014)

October 31, 2014

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

Canadian gold miners picked the wrong week to report a bad batch of earnings and run into political turmoil.

With the Federal Reserve announcing an end to quantitative easing, investor sentiment for the precious metal is at its lowest point in months. So when a few of the large miners reported disappointing results, they got absolutely no sympathy from the market.

Shares of Goldcorp Inc. (down 13%), Yamana Gold Inc. (down 16%) and Agnico-Eagle Mines Ltd. (down 12%) were all hammered after reporting poor third quarter earnings. Their competitors also got dragged down in the rout as gold prices dropped back below US$1,200 an ounce.

In this sort of market, it is no surprise that investors did not look kindly at political risk either. Shares of Iamgold Corp. and SEMAFO Inc., which both operate in Burkina Faso, fell sharply as protests intensified against President Blaise Compaoré, who is eager to extend his protracted 27-year term.

While the gold stocks may rebound quickly from Thursday’s beatdown, the day provided a stark reminder that the sector does not make much money at current prices. And the companies with higher debt or operating costs could face liquidity concerns if prices stay at these levels for the long haul.

Coal mining comeback? – by Melissa Villeneuve(Lethbridge Herald – October 30, 2014)

October 31, 2014

http://lethbridgeherald.com/

The Crowsnest Pass has a rich history in the coal-mining industry. While there hasn’t been a working coal mine in southern Alberta for decades, an Australian company, Riversdale Resources, hopes to revive that.

Riversdale Resources has acquired property at Grassy Mountain and plans to build an open-pit mine producing two to four million tonnes of high-quality coking coal per year over 28 years. The company plans to export it to the Asian steel-making industry.

Managing director Steve Mallyon said there isn’t a lot of new coal supply coming online, and they found the quality of the coal in the Crowsnest Pass region is suitable for high-quality steel-making.

“Grassy itself has very good-quality coking coal, a significant reserve there we inherited plus we added to. We have rail and infrastructure on the doorstep, but also being a town that services the coal industry already, there are a lot of people in that area that have a connection to the coal industry.”

The first coal mine in the Crowsnest Pass opened in 1900, and many of the surrounding communities were mining towns. Mallyon said there are many benefits in coming to a community rich with mining experience. Many who live in the area work across the border at Teck in Sparwood, B.C.

Energy East is worth the fight – by Claudia Cattaneo (National Post – October 31, 2014)

October 31, 2014

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

TransCanada Corp.’s twin-cities news conference Thursday to announce the filing of its Energy East application to the National Energy Board was pipeline theatre at its finest.

After 18 months of planning, the company presented to the world a 30,000-page document — filling 68 binders in 11 official-looking boxes — to provide evidence in support of the $12-billion project.

The Calgary-based company pulled out all the stops: There were panels of top executives in both Toronto and Quebec City to explain the benefits, representatives of business, trade unions, and municipalities present to demonstrate the depth and breadth of support, simultaneous French/English translation and no question left unanswered — about whether the project threatens beluga whales, whether it contributes to climate change or whether the company deserves to be trusted given some recent incidents in its system.

“At over 30,000 pages, the document is one of the most extensive regulatory applications ever developed in our history,” Russ Girling, president and CEO of TransCanada told media in Toronto. “The final result is a body of work that I believe achieves what we set out to do many months ago, and that is to listen — we listened to communities, businesses, governments, landowners and other stakeholders across this country.”

Barrick faces new setback over Zambia mine – by Rachelle Younglai (Globe and Mail – October 31, 2014)

October 31, 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.

Barrick Gold Corp. may idle its Zambian copper mine if the African government imposes a higher royalty, a potential blow to the Canadian company, which has worked hard to turn its fortunes around.

The world’s largest gold producer was in discussions with the government about reducing the proposed 20-per-cent rate when the Zambian president died this week, adding more uncertainty to the negotiations.

“At the end of the day if we are in a position where through a new tax regime the project doesn’t make money, then certainly we would have to consider suspending for a period of time,” Kelvin Dushnisky, Barrick’s co-president, said in an interview. “The copper remains in the ground. It’s not going anywhere. It wouldn’t make sense for us to run the mine just for the purpose of paying royalties and taxes.”

It’s another sign that the challenges are not over for Barrick, which like the rest of the gold industry continues to grapple with the fallout from weaker gold prices and expensive acquisitions gone wrong.

“The gold producers are stuck between a rock and a hard place,” said Pawel Rajszel, analyst with Veritas Investment Research. “There’s just not much the gold producers can do, except hope for a higher gold price.”

[Ian Ball] Out of McEwen’s shadow – by Kip Keen (Mineweb.com – October 31, 2014)

October 31, 2014

http://www.mineweb.com/

Ian Ball, former president of McEwen Mining, opens up. We talk opportunity next to Canada’s largest gold mine through Abitibi Royalties.

HALIFAX, NS (MINEWEB) – Ian Ball made a surprising career choice earlier this year. He left the relative comfort of McEwen Mining – groomed by Rob McEwen, the company’s chairman, controlling shareholder and also the former head of Goldcorp, to the position of president – to join a much smaller junior explorer called Abitibi Royalties. He’d been at McEwen for over a decade.

Or maybe it wasn’t so surprising.

In leaving, Ball, the right hand man of McEwen – who is no conservative in his approach to company building and discovery – showed he too is a risk taker, not just a career seeker.

Ball, now President of Abitibi, says in leaving McEwen he looks to create something according to his own vision, “the best gold company in the world,” he says at one point in a recent interview.

In describing his approach to building companies, and the reason why he wanted to join Abitibi Royalties, he turns to analogies meant to inspire awe, examples that struck him earlier this year and last in the tech sector.

Toronto mining company Sherritt to sell head office – by Lisa Wright (Toronto Star – October 30, 2014)

October 31, 2014

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.

Toronto-based mining company Sherritt International Inc. says it’s cutting the size of its head office workforce by 25 per cent and preparing to sell its Toronto office building.

Amid tumbling commodity prices, Sherritt International Inc. has begun a major restructuring that includes cutting its workforce by 10 per cent and the sale of its head office in Toronto, which will affect one-quarter of its staff.

The downsizing and real estate sales, including the Yonge St.-Summerhill Ave. headquarters and the technology division offices in Fort Saskatchewan, are expected to save the miner $10 million annually, said chief executive David Pathe Wednesday after releasing its third-quarter earnings.

The financial results included a net loss of $51.3 million from continuing operations in the three months ended Sept. 30 compared with a profit of $1.1 million a year earlier, before Sherritt sold its coal operations in Western Canada.

“It feels like the bottom of a bear market. And what are the signposts? Layoffs are one,” said veteran mining industry analyst Barry Allan of Mackie Research Capital Corp.

Friedland’s Plan for $1.6 Billion Platinum Mine at Impasse – by Franz Wild (Bloomberg News – October 31, 2014)

October 31, 2014

http://www.bloomberg.com/

Construction of the biggest platinum mine planned since 1993 is being delayed because of an impasse between billionaire Robert Friedland’s Ivanhoe Mines Ltd. (IVN) and South Africa’s mines ministry over the extent to which local communities will benefit.

South Africa’s Department of Mineral Resources delayed authorization to start building the $1.6 billion Platreef mine by 12 weeks to a target date of Nov. 26, saying some elements of the company’s plan to benefit the surrounding community were “sketchy” and did “not offer much,” according to an Oct. 2 letter sent to Ivanhoe and seen by Bloomberg. The department said its demands were “not exhaustive” and it may request “further clarification” before it gives the go-ahead.

Ivanhoe Chief Executive Officer Lars-Eric Johansson said in an Oct. 9 response to the mineral resources department, a copy of which Bloomberg has obtained, that “We believe that each and every formal request by your department to date has been accommodated.”

The department’s demands come amid opposition by some groups from one of South Africa’s poorest communities in northern Limpopo province over how Ivanplats, the Vancouver-based company’s local unit, brokered a deal to sell community members a stake in the project to meet government requirements.

South African mines minister Ngoako Ramatlhodi has asked to meet Friedland to resolve issues, the department said Oct. 30 in an e-mailed response to questions.