Republic of Mining

Gold royalty firms Franco Nevada, Sandstorm Gold team up for first time as business evolves – by Peter Koven (National Post – August 13, 2014)

August 13, 2014

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

Two mining royalty firms have teamed up in a financing deal for the first time, a signal their business is evolving and more cooperation is likely across this sector in the future.

Franco-Nevada Corp. and Sandstorm Gold Ltd. announced this week that they will jointly provide at least US$100-million to True Gold Mining Inc. for the company’s Karma gold project in Burkina Faso. The transaction has two key elements: a fixed repayment in gold, and a long-term streaming agreement in which the royalty companies will acquire a portion of the gold from Karma.

It is a small deal, but insiders said it provides a glimpse of how this business is rapidly changing as royalty deals start to resemble more conventional project financing.

The major royalty firms (Franco, Silver Wheaton Corp., Royal Gold Inc. and Sandstorm) have become an increasingly crucial source of capital for emerging mining companies over the last several years. They have stepped up and done a large number of transactions as the banks became reluctant to deal with any single-asset miners.

Traditionally, the royalty companies provided capital to miners in exchange for a passive royalty on future production. Over the last decade, they also did more active streaming deals, in which they acquired gold and silver from the projects they invested in.

Beware Hasty, Unwise Policy Decisions After Mount Polley – by Kenneth P. Green (Huffington Post – August 12, 2014)

August 13, 2014

http://www.huffingtonpost.ca/

Kenneth P. Green – Fraser Institute Senior Director, Natural Resource Studies

The pictures coming out of northern British Columbia where the Mount Polley mine tailings pond ruptured on Aug. 4 are painful to see. The fact that the site is remote, and that only a small number of people are likely to be directly affected doesn’t mitigate the visceral pain one feels at seeing images of uprooted trees, and mud-clogged streams and rivers. Humans inherently find healthy ecosystems beautiful and degraded ecosystems painful.

One also has to sympathize with the people near Mount Polley, who have been (temporarily at least) told not to consume water from their local waterways, and who fear damages to salmon and other wildlife, and damages to their livelihoods that partly depend on tourism.

In the aftermath of such incidents, it’s normal to ask what can be done to prevent this from happening again, and indeed, such questions are not only normal, they are at the heart of how we learn as human beings.

But it’s one thing to seek to learn from a disaster and it’s another thing to incite emotional responses to promote hasty, unwise public policy actions. Despite the fact that virtually nothing was known about the cause of the Mount Polley leak, only two days after the spill, the David Suzuki Foundation had set up an automatic petition portal on their website calling on the provincial government to institute a moratorium on new mine approvals, a suggestion that would imperil a substantial part of BC’s economy. This is “ready, fire, aim” policy-making.

COLUMN-Australian coal miners running out of costs to cut – by Clyde Russell (Reuters India – August 13, 2014)

August 13, 2014

http://in.reuters.com/

Aug 13 (Reuters) – Coal miners in Australia have spent the past two years desperately cutting costs in a bid to survive falling prices, but this strategy is running out of steam.

While coal miners have been successful in lowering costs, they still haven’t managed to do it anywhere near as fast as prices have declined, and now the scope for further costs reductions is limited.

It’s likely that mining costs will start to rise again in the next year or two as the current round of cost-cutting has led to under-investment and a focus on extracting the easiest, or cheapest, to mine coal.

While coal miners are by nature a tough bunch, the prevailing sentiment at this week’s Coaltrans Australia conference in Brisbane was that prices need to increase soon or more mines will have to be shut, or placed on care and maintenance.

Data from consultants CRU illustrates the problem for coal miners in Australia, which is the world’s largest exporter of coking coal used in steel-making, and number two in thermal coal used in power plants.

This shows that mining costs have fallen, but only marginally, with site costs in New South Wales state dropping from around $65 a tonne in 2012 to $63 a tonne this year, while those in the other major producing state, Queensland, fell from about $61 to $60.

NEWS RELEASE: Ontario Coalition of Aboriginal People opposed to Goliath Gold Project Wastewater Plans

August 13, 2014

(WABIGOON, ON – August 11, 2014) The Ontario Coalition of Aboriginal People (OCAP) is strongly opposed to the plan of Treasury Metals’ Goliath Gold Project to discharge effluent into Blackwater Creek or pipe it directly to Wabigoon Lake through a submerged diffuser. The recent catastrophic spill of wastewater and tailings waste in British Columbia is a warning to everyone in this region of the importance of protecting Wabigoon Lake.

It has come as a surprise to many people in the Dryden region that Treasury Metals plans to submit their environmental impact study and that they don’t see any red flags concerning the project. These facts contrast strongly with the concerns about the health and environment from Aboriginal Peoples and others living in the region.

“Wabigoon Lake is of great importance to Aboriginal Peoples in this region and the name itself is Ojibwe for ‘flower’. The pristine waters of the lake are a major attraction for recreational boaters and anglers and this generates significant economic benefits. Allowing metal mining corporations to use our lake as a dump for their wastewater and tailings is a pollution risk that we should not be taking,” said Brad Maggrah, OCAP President.

The concerns and issues of Aboriginal Peoples about federal and provincial environmental policies, which allow mining companies to destroy lakes and waters with toxic tailings, have fallen on deaf ears. Aboriginal Peoples have a deep respect and spiritual connection to lands and waters, and the pollution of our freshwater lakes is of great concern.

Oil prices fall to 13-month low despite global conflicts – by Jeffrey Jones (Globe and Mail – August 13, 2014)

August 13, 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.

CALGARY — Ample crude supplies and a weak global economic outlook have pushed world oil prices to a 13-month low despite armed conflicts that have flared up in key producing regions.

Oil markets are “almost eerily calm” even as geopolitical risks abound in the Middle East and in other important energy regions, the International Energy Agency said in the August edition of its much-followed Oil Market Report.

The world is well supplied, after Saudi Arabia ramped up production past 10 million barrels a day, its highest in nearly a year, and its OPEC partner Libya eked out tentative gains. They have made up for losses in Iraq, Iran and Nigeria this summer, the IEA said. Meanwhile, North America’s oil-production renaissance has hummed along unabated.

At the same time, the IEA cut its oil-demand forecast for 2014 by 180,000 barrels a day, after crude deliveries in the Americas and Europe in the last quarter sank by 440,000 barrels a day and the global economy underperformed previous expectations. It trimmed its outlook for all-important Chinese demand growth to 2.9 per cent from 3.3 per cent.

B.C. further rescinds water-use ban near Mount Polley mine spill – by Sunny Dhillon and Andrea Woo (Globe and Mail – August 12, 2014)

August 13, 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.

VANCOUVER — The province of British Columbia has announced that a ban on water use near the Mount Polley mine spill has been further rescinded and that fish appear to have escaped major harm – but any sense of normalcy has been offset by fear the spill could ultimately cost hundreds of area residents their jobs.

On Tuesday, a ban that at one time left up to 300 people without water to drink, bathe in or give to pets and livestock was further rescinded. Acting on positive findings in additional water tests, Interior Health said the do-not-drink order now only remains in effect for the immediate “impact zone” of the spill, where few people live.

Trevor Corneil, a medical health officer with Interior Health, said there is no reason to believe water outside the impact zone was exposed to unsafe levels of contaminants.

Environment Minister Mary Polak said “almost all” contaminants tested in water samples from Polley Lake meet federal and provincial drinking water guidelines, with the exceptions of pH and aluminum, which “slightly exceed” them.

Aboriginal institute trains mining industry workers – by Ian Ross (Northern Ontario Business – August 13, 2014)

August 13, 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.

Seven Generations Education Institute is seeking to create a home grown workforce to position Aboriginal people in northwestern Ontario to take advantage of coming opportunities in the mining sector.

The Aboriginally run Treaty 3 organization, established in 1978, was the recipient of $5.2 million in federal funding last spring to provide training and real world experience to First Nation, Inuit and Métis participants.

The one-time grant funding will be spread out over 15 months. The money, which arrived last April through Ottawa’s Skills and Partnership Fund, is aimed at skill development of new workers coming into the mining sector and placing them in a position to fill vital support roles as development begins to unfold in the region.

“The goal is not to create miners,” said Brenda Cameron, project coordinator of the Mining Workforce Preparation Program for Seven Generations. “It’s to create a trained Aboriginal workforce where people can secure a job somewhere in the mining industry.

“You need people to staff the offices, build the mines, tradespeople, electricians, first responders and line cooks.” Those skills are also transferrable to other sectors as well.

Sudbury mining deal worth $1.25 million – by Staff (Sudbury Star – August 13, 2014)

August 13, 2014

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

Sudbury Platinum Corporation has announced plans to purchase CaNickel Mining Company Limited’s 100% interest in the Aer-Kidd Project in Sudbury for $1.25 million.

“(Sudbury Platinum Corporation’s) interest in the Aer-Kidd Project has grown over a number of years as we continue to develop, pursue and evaluate (nickel, copper and platinum group metals) opportunities in the prolific Sudbury region,” company CEO Scott McLean said in a release.

“The targets that have been recently identified on the Aer-Kidd property are very compelling and have resulted in the company’s decision to purchase CaNickel’s interest.”

The Aer-Kidd property is located 20 km southwest of downtown Sudbury and covers a 1.4-km section of the Worthington Offset Dyke in an area with a rich mining history, dating back to the 1800s.

The property is close to Vale’s Totten Mine and KGHM’s Victoria Mine project. The Aer-Kidd property hosts the former producing Howland Pit, Robinson and Rosen mines, which were small deposits exposed at surface that were mined down to a maximum depth of 300 metres.

SA sitting pretty on potential platinum powerhouse – by Ross Harvey (Business Day Live – August 11, 2014)

August 12, 2014

http://www.bdlive.co.za/

AT THIS week’s mining lekgotla, the future of the currently suppressed platinum industry is likely to be a key agenda item. Whether fuel cell technology takes off is a critical determinant of what this future might look like.

In its latest set of facts and figures, the Chamber of Mines states that “despite the significant role and contribution of the platinum mining sector to the South African economy, the industry is currently in a challenging position”.

It cites the combined effect of slowing global demand, market surpluses and associated declining prices, increasing production costs and the effect of continued labour relations strife as specific challenges.

The chamber also highlights weakness of demand for catalytic converters in Europe. Combined with some substitution of platinum by palladium — a challenge because of palladium’s much lower price — this suppressed demand suggests a break-even marginal return to platinum of $1,600/oz.

In South Africa, about “59% of the industry is either marginal or loss-making” as it is difficult to keep marginal production costs below $1,600/oz. The platinum price is at present around $1,460/oz, with a 200-day moving average of roughly $1,430. As a result, some investment analysts have gone so far as to say that there are no more profits to be made in platinum.

[B.C. tailing dam failure] Mt Polley: Snow White and the Seven Dwarfs – by Jack Caldwell (I Think Mining – August 12, 2014)

August 12, 2014

http://ithinkmining.com/

Jack Caldwell, P.E. has a B.Sc. in Civil Engineering, an M.Sc. (Eng.) in Geotechnical Engineering and a post-graduate law degree. He has over 35 years engineering experience on mining, civil, geotechnical and site remediation projects. He has worked on numerous projects throughout southern Africa, Europe, Canada and the United States.

Here are the stories of the seven dam failures that have occurred since the beginning of 2012. Six are failures of tailings facilities. The seventh is a rockfill dam. The following are extracts from technical papers that I wrote well before the Mt Polley failure. Details of the first three are available at this link: Tailings Facility Failures in 2012. Details of the remaining four are in a paper that I will present at the Tailings and Mine Waste 2014 conference in Colorado in October of this year.

There is no common thread, except possibly a failure by those responsible to understand the beast, the Wicked Stepmother, they were dealing with. If you see other common threads, then please comment.

GULLBRIDGE MINE, NEWFOUNDLAND, CANADA

The old Gullbridge mine tailings facility in Newfoundland is the responsibility of local government. Observations indicate potential problems. A respected consulting firm, Stantec, issues a report on the safety of the facility and concludes they cannot tell what is going on because of poor construction records, copious vegetation, and a lack of geotechnical data. They recommend a full investigation. But the local authorities delay, preferring to spend money on inexpensive reports in preference to expensive physical action, do nothing. The dam fails and tailings spill into the downgradient wetland. Now they are fixing the failure.

Kirkland Lake explosives manufacturer aims for bigger market share – by Ian Ross (Northern Ontario Business – August 12, 2014)

August 12, 2014

Maintaining the status quo doesn’t cut it with Nordex Explosives president and CEO Jim Taylor. “You’ve got to always be looking for something new. Whether it’s new clients, new ideas, or a new something, you’ve got to keep moving forward.”

That philosophy and a well-rounded product line have propelled the Kirkland Lake explosives maker’s expansion into Western Canada.

The 44-year-old, publicly-traded firm is a manufacturer and distributor of emulsion and ANFO (ammonium nitrate/fuel oil) products for the mining, quarry and construction industries.

Within the last year, it’s also become the exclusive Canadian manufacturer and supplier of the Buttbuster perimeter control products made by Johnex Explosives of Australia.

It’s led to the installation of an exclusive production line at the Kirkland Lake facility on Adams Mine Road late last year, and the hiring of 18 new employees to run it, with enough capacity to possibly go North America-wide.

Ring of Fire funding a must with or without feds – by Jeff Labine (Timmins Daily Press – August 12, 2014)

August 12, 2014

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – The Minister of Northern Development and Mines believes stable federal funding for infrastructure is needed to ensure the province’s economic growth. But the province will still spend upwards of $1 billion on infrastructure for the Ring of Fire with, or without, federal backing.

Premier Kathleen Wynne recently urged the Conservative federal government to increase funding for infrastructure to 2% of the GDP annually or roughly $12 billion a year. That’s about four times the amount that the province currently gets from Ottawa.

Wynne called out the federal government while attending a special inter-provincial summit on infrastructure in Toronto last week.

Infrastructure has been a major focus for the recently formed majority government as the province plans to spend $13 billion on infrastructure this year alone. By 2015, the province plans to invest $2.5 billion for highway rehabilitation and expansion.

The long-term plan is to invest $130 billion in infrastructure throughout the province over the next decade while also promising to eliminate the $12 billion deficit in the next three years.

Michael Gravelle, the Minister of Northern Development and Mines, said the federal government needs to recognize that it plays an important role when it comes to Ontario’s infrastructure needs.

Metal production expands 17.11% – by Czeriza Valencia (The Philippine Star – August 13, 2014)

August 12, 2014

http://www.philstar.com/

MANILA, Philippines – Philippine metallic production rose by 17.11 percent in terms of value in the first quarter of the year on increased revenues from gold production, the Mines and Geosciences Bureau (MGB) said yesterday.

The aggregate value of metal production for the first three months of the year is placed at P21.98 billion, up by P3.21 billion from P18.77 billion recorded in the same period last year.

Gold production accounted for 38.56 percent of the total production value during the period with aggregate earnings of P8.48 billion, up 17 percent from P7.27 billion in the comparative period.

Higher gold production during the first quarter was due to “substantial” increase in production in the following projects: Didipio gold project of Oceana Gold Philippines Inc. in Nueva Vizcaya, Toledo copper project of Carmen Copper Corporation in Cebu, and Padcal copper-gold project of Philex Mining Corporation in Benguet.

Revenues from direct shipping nickel ore and nickel sulfides comprised 34.80 percent of the total metal production value for the period at P7.65 billion.

Achtung, Ontario! Renewables are a money pit – by Brady Yauch (National Post – August 12, 2014)

August 12, 2014

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

Germany, the model for Ontario’s wind and solar developments, now regrets its spending spree

Germany – the country on which Ontario modelled its approach to renewable energy development – has a $412-billion lesson for Ontario. That’s the amount the country has spent on subsidies in support of solar and wind energy, among other renewables, over the past 20 years, all in the push to wean the country off fossil fuel and nuclear generation.

On the surface – and according to many news sites – the program has been a success, and not just because of the 378,000 people renewables now employ.

By the end of 2012 (the most recent year for data), wind and solar provided about 13% of all German electricity consumption. Adding in hydro and biomass, renewables provided more than 23%. And in May, headline writers around the world proudly trumpeted that renewable energy provided 75% of the country’s total electricity consumption.

But scratch a bit below the surface and an entirely different picture emerges – one with households being pushed into “energy poverty” as renewable subsidies lead to soaring power bills, handouts to the country’s big businesses and exporters so they can avoid paying for those subsidies and a systematic bankrupting of traditional utilities. As for that one day in May when headlines celebrated that 75% of power generation came from renewables, well, it was a Sunday when demand for power is at its lowest level.

Mount Polley dam breach not an environmental disaster: Mines Minister Bill Bennett – by Gordon Hoekstra (Vancouver Sun – August 12, 2014)

August 12, 2014

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

But First Nations, residents and environmentalists have ongoing concerns

B.C. Mines Minister Bill Bennett says the Mount Polley tailings dam collapse is not an environmental disaster, equating it to the “thousands” of avalanches that happen annually in B.C. Bennett, pointing to initial positive water readings, asserted his contention will be proven in the next several weeks.

Central B.C. First Nations, some area residents and Williams Lake mayor Kerry Cook have described the collapse of the dam as an “environmental disaster.”

The Aug. 4 collapse of a 300-metre section of the gravel and earth dam spewed 10 million cubic metres of water and 4.5 million cubic metres of finely ground up rock containing potentially toxic metals into Hazeltine Creek, Polley Lake and Quesnel Lake.

While the water readings in Quesnel Lake and Quesnel River have been positive, some residents, First Nations and environmentalists have raised concerns over the long-term effects of the sludge that poured into Hazeltine Creek and Quesnel Lake. It will also take longer to determine the environmental effects of the spill, including on salmon, they say.

Bennett acknowledged the dam collapse may be a mining industry, a geotechnical and a political disaster. But he said that has to be separated from the environmental effects.