Republic of Mining

In destabilising economic war over Ukraine, gold the winner – by Lawrence Williams (Mineweb.com – April 25, 2014)

April 25, 2014

http://www.mineweb.com/

U.S. data and the escalating Ukraine crisis have seen gold Yo-Yo down and back up again.

LONDON (MINEWEB) – Some very volatile trading in gold and silver yesterday. The former dived to its lowest price since February to around the $1,270 mark before almost immediately rebounding sharply to a little below $1,300 before settling above $1,290, a position it held overnight.

Silver, living up to its more volatile general role at one stage dipped down below $19.00, its weakest level since its December lows before it too revived sharply jumping back to close the day at around the $19.60 level before settling back to around $19.55 where it was sitting this morning as Europe opened.

Analysts put the price movements to factors such as U.S. economic data, but in this writer’s view the downturn was largely due to a loss in confidence by traders in the prospects for short term precious metals price growth following gold and silver’s lacklustre performance as it drifted downwards – but then the recovery came on the back of the deteriorating situation on the ground in the Ukraine. Ukrainian forces started to move in to quell the demonstrations and government building occupations in the Donetsk region in the east of the country.

DST, NRF launch holistic collaborative mining research centre at University of Johannesburg – by Natalie Greve (MiningWeekly.com – April 24, 2014)

April 25, 2014

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

JOHANNESBURG (miningweekly.com) – Advancing South Africa’s ambitions of evolving from a resource-based economy to a knowledge-based economy, the Department of Science and Technology (DST) and the National Research Foundation (NRF) on Thursday launched a specialised academic institute that will focus on holistic research into the country’s profusion of mineral resources and look to stimulate the creation of a cohort of skilled South African economic geologists.

The Centre of Excellence (CoE) for Integrated Minerals and Energy Resource Analysis (Cimera) would be hosted by the University of Johannesburg (UJ) and would see the collaboration of South African economic geology research units the Palaeoproterozoic Mineralisation Centre, at UJ, and the Economic Geology Research Institute, at the University of the Witwatersrand (Wits).

This was the fifth DST-NRF CoE to be launched this month, following the official opening of four other research units focusing on food security, scientometrics and science, technology and innovation policy, mathematical and statistical sciences, and human development respectively.

Barrick chair Peter Munk blasts Newmont’s company culture as miners struggle to reach deal – by Peter Koven (National Post – April 25, 2014)

April 25, 2014

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

TORONTO – Barrick Gold Corp. chairman Peter Munk levelled a pointed criticism of Newmont Mining Corp. on Thursday, saying he has struggled to strike a merger with his U.S. rival because the company is extremely bureaucratic and not shareholder-friendly.

Mr. Munk, 86, hoped to reach a deal to buy Newmont before he officially retires at Barrick’s annual meeting next month. But Toronto-based Barrick has been frustrated over years of negotiations by what he calls “cultural differences.”

He said that Newmont is an extremely conservative and risk-averse company, which makes negotiations very difficult. As one example, he pointed out that Newmont shut reporters out of its annual meeting this week after news of the talks leaked. He said Barrick would never consider doing that.

“That’s the cultural difference. That’s the kind of people they are, and that’s why it’s so difficult to make a deal,” he said in an interview. “They are not shareholder-friendly.” Even though they operate next to each other in Nevada, Barrick and Newmont are like oil and water.

Barrick Gold Corp shareholders file class action suit over Pascua-Lama mine – by Drew Hasselback (National Post – April 25, 2014)

April 25, 2014

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

Barrick Gold Corp. has been named in a proposed shareholders class action lawsuit that seeks $6-billion in damages because the company allegedly failed to make timely disclosure of problems at its Pascua-Lama mine in South America.

“Barrick misrepresented the progress and feasibility for development and production at the Pascua-Lama mine, repeatedly through the class period,” the plaintiffs allege in a notice of action filed Thursday in the Ontario Superior Court of Justice in Toronto.

Lawsuits in Ontario usually begin with the filing of a legal document called a statement of claim. Filing a notice of action officially launches the case, but also gives plaintiffs more time to follow up with more detailed allegations in the statement of claim.

The document filed Thursday contains allegations that have not been proven in court. “The company is aware that a notice of action has been filed in the Ontario Superior Court of Justice. Barrick disputes the allegations, and will defend itself against any lawsuit vigorously,” the company said in an emailed statement late Thursday.

Plaintiffs have filed similar securities class actions against Barrick over Pascua-Lama in the U.S. federal courts. The company has denied the allegations in the U.S. claims.

How Keystone XL soured the ‘special relationship’ between Stephen Harper and Barack Obama – by Edward Greenspon, Andrew Mayeda, Rebecca Penty and Theophilos Argitis (National Post/Bloomberg News – April 25, 2014)

April 25, 2014

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

On Thursday, Nov. 10, 2011, Canadian Prime Minister Stephen Harper, seated in his Ottawa office across from Parliament Hill, took an urgent call from U.S. President Barack Obama. Mr. Harper’s advisors were listening intently around a muted speakerphone in an adjoining room.

The U.S. State Department, Mr. Obama said, would be making an announcement later that day putting the Keystone XL pipeline project on hold. There was no choice, according to the president. Nebraska wanted the route changed to protect a key aquifer under millions of hectares of prime farmland. This would necessitate a new environmental assessment. He assured Mr. Harper the call wasn’t a game changer; neither a yes nor a no, just a delay.

Mr. Harper was far from assured — he was irritated. The project had already undergone three years of study and was, so the Canadians believed, on the cusp of approval. Delay, he told Mr. Obama, served no one’s interest.

By the time Mr. Harper hung up, according to people with knowledge of the episode, he had sized up the potential economic calamity for Canada and its oil ambitions. Western Canada’s land-locked Alberta oil sands hold roughly 168 billion recoverable barrels of heavy crude known as bitumen. The U.S. gobbles up almost all Canada’s oil exports.

[Ontario] Tories would pursue ‘quick win’ to kick start Ring of Fire: Fedeli – by Darren MacDonald (Sudbury Northern Life – April 24, 2014)

April 25, 2014

http://www.northernlife.ca/

Says work on east-west road could begin in the fall

A Progressive Conservative government would back an industry plan that could see work begin on an east-west road into the Ring of Fire as early as this fall, Nipissing MPP Vic Fedeli said Thursday.

“We believe there’s a quick win here, and that’s the Noront Resources solution,” Fedeli said during a visit to Greater Sudbury.

Noront is working to develop its Eagle Nest and Blackbird deposits, a mix of nickel, copper, platinum and palladium, as well as its chromite deposit in the remote site in northwestern Ontario. It proposes building a permanent road from the Webequie First Nation through Pickle Lake to Saugeen, connecting it to existing road and rail infrastructure.

‘Exciting years’ for Lake Shore Gold – by Ron Grech (Timmins Daily Press – April 25, 2014)

April 25, 2014

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Dan Gagnon held a captive audience of local business owners as he talked about the prospects of Lake Shore Gold’s “continuous improvement and growth” filtering down to the community.

“I think we’ve had an exciting couple of years, definitely a breakthrough year for us in 2013,” said Gagnon, who is Lake Shore Gold’s senior vice-president of operations. “We saw a steady increase in production. We started generating free cash flow, so we’re now a business that can fund its own projects … We’ve basically gone from 85,000 ounces a year in 2012, to 135,000 in 2013, to 160,000 to 180,000 (anticipated this year).”

Gagnon was the keynote speaker at a Timmins Chamber of Commerce luncheon held Thursday at the Schumacher Lions Den.

Asked if there were opportunities for small local businesses to prosper from the growth in operations at Lake Shore Gold, Gagnon replied, “Definitely. In 2012, for example, we spent $130 million locally. That was 60% of our spending which was basically local with all the suppliers that you see off Algonquin Boulevard. There is a big push for us to support the local, then the Northern and then Ontario.”

Fears looming hydro hike will hurt industry – by Ron Grech (Timmins Daily Press – April 25, 2014)

April 25, 2014

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – It was denied at the time by Xstrata Copper. Yet many in the community continue to blame Ontario’s higher energy costs for the company’s decision that ultimately led to the Timmins smelter closing in 2010.

The fact there is a substantial hydro rate increase on horizon doesn’t bode well particularly in communities in Timmins that depend on resource-based industries which are traditionally high-energy users.

“For our industries, mining and forestry, because they are energy intensive, it’s a job killer,” said MPP Gilles Bisson (NDP – Timmins-James Bay), on the prospect of a rise in hydro rates. Phil Barton, a small business owner in Timmins and president of the city’s chamber of commerce, came close to echoing that view.

“I personally think one of the reasons we lost the met site was due to high energy costs and it is certainly detrimental to many of the other big users of power,” said Barton. “If they have to raise their costs because of energy, perhaps it makes them less competitive in the global marketplace. And that has a ripple effect throughout our whole region, probably more so than in many other regions.”

Peter Munk to leave Barrick Gold having seen its highs and lows – by James Wilson (Financial Times – April 24, 2014)

April 24, 2014

http://www.ft.com/home/us

Peter Munk started Barrick Gold with $40m of his own money in 1982, knowing not much about mining.

Now 86, and after more than 30 years in the gold business, Mr Munk still talks about Barrick having been the entrepreneurial “young upstart” for much of its life – but it became a company worth $50bn, a Canadian national champion built by a Hungarian-born refugee and the largest producer of gold in history.

Yet the past two years have been tough on Mr Munk, Barrick and the rest of the gold industry, particularly 2013, when Barrick posted $11.5bn of writedowns, cut its dividend and had to raise $3bn in equity to try to cut its debt.

“I would not have chosen this particular year as my final one as chairman, but I don’t get to write the script,” a chastened Mr Munk wrote in the company’s annual report. Barrick is now worth about $21bn.

Mr Munk also acknowledged the damage wrought by Barrick’s acquisition of Equinox Minerals in 2011. The unexpected diversification into copper came at an inflated price, for cash, and sparked doubts last year over Barrick’s debt levels and liquidity.

ONTARIO GOVERNMENT NEWS RELEASE: Ontario and Matawa Member First Nations Celebrate Historic Framework for Negotiations on the Ring of Fire

April 24, 2014

Premier Joins First Nations Chiefs to Formalize Regional Framework

April 24, 2014 1:00 p.m. Office of the Premier

Premier Kathleen Wynne and the Matawa member First Nations Chiefs were in Thunder Bay today, where they joined Matawa community members, to officially celebrate the recent signing of a landmark regional framework agreement to develop the Ring of Fire.

The Regional Framework Agreement is a first step in the historic, community-based negotiation process that will bring together the nine First Nations and the Province of Ontario to discuss and negotiate an approach for development in the First Nations’ traditional territories. The process will help ensure that First Nations participate in, and benefit from, Ring of Fire developments.

The agreement ensures that First Nations and Ontario can work together on resource development opportunities. That includes: long-term, regional environmental monitoring; enhanced participation in environmental assessment processes; resource revenue sharing; social and economic supports; and regional and community infrastructure.

In attendance at the ceremony were Chief Sonny Gagnon of Aroland First Nation, Chief Fred Sackaney of Constance Lake First Nation, Chief Elizabeth Atlookan of Eabametoong First Nation, Chief Celia Echum of Ginoogaming First Nation, Chief Allen Towegishig of Long Lake #58 First Nation, Chief Elijah K. Moonias of Marten Falls First Nation, Chief Peter Moonias of Neskantaga First Nation, Chief Johnny Yellowhead of Nibinamik First Nation and Chief Cornelius Wabasse of Webequie First Nation.

Barrick invites Newmont to restart merger talks – by Rachelle Younglai (Globe and Mail – April 24, 2014)

April 24, 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. has formally asked Newmont Mining Corp. to resume merger talks after their negotiations hit an impasse late last week, according to a person familiar with the situation.

The North American-based gold miners had come close to agreeing on an all-stock deal, but their discussions broke down over which assets to spin out from the combined company, other sources have said.

The companies had aimed to make an announcement before their annual shareholder meetings this month. Colorado-based Newmont held its meeting in Delaware Wednesday morning, and Toronto-headquartered Barrick’s meeting is scheduled for April 30.

Barrick e-mailed the request to restart talks to Newmont, outlining the terms of their friendly proposal as well as issues that still must be resolved, according to the source familiar with what transpired.

China’s war on smog will put the reins on global coal demand – by Jeff Rubin (Globe and Mail – April 24, 2014)

January 15, 2015April 24, 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.

China’s pollution epidemic has finally spurred the country’s leadership to declare a war on smog. It’s about time. Chinese citizens are angry about what’s going into their lungs, while a recent government report says pollution has left 16 per cent of the country’s land unfit for use.

Much of that pollution can be traced back to the billowing smoke stacks attached to China’s fleet of coal-fired power plants. If Beijing is indeed sincere about taking the fight to pollution, then these ageing plants will be on the front line. Global coal producers are already sitting up and taking notice.

China relies on coal for roughly three-quarters of its power generation. Its coal-fired power plants combust nearly as much coal as the rest of the world put together. Coal prices, for their part, are already tumbling in part due to a slowdown in China’s economic growth. Spot prices at Newcastle, Australia, the world’s largest thermal coal exporting terminal, have plunged from a monthly average high of $142 a tonne in January 2011 to $78 a tonne last month.

BHP still sees [Pilbara] greenfields – by Andrew Burrell (The Australian – April 23, 2014)

April 24, 2014

http://www.theaustralian.com.au/business

BHP Billiton iron ore boss Jimmy Wilson has dismissed suggestions that the era of multi-billion-dollar greenfields iron projects in the Pilbara has come to an end, even as the mining giant focuses on extracting efficiencies rather than building new mines.

Mr Wilson also refused to be drawn into forecasting the iron ore price amid fears it could tumble in response to patchy Chinese economic data. He said few ¬people had any idea about the outlook for Australia’s most valuable export commodity.

Speaking at the opening of BHP’s $US3.6 billion ($3.9bn) Jimblebar mine near the town of Newman, Mr Wilson said he and his team had “impressed ourselves” by boosting production forecasts from its West Australian operations from 207 million ¬tonnes per annum to 217mtpa for this financial year.

The improved outlook had been achieved through operational improvements, productivity gains and technological innovation rather than any major capital spending. But Mr Wilson rejected suggestions that Jimblebar, along with Gina Rinehart’s $10bn Roy Hill project, could be the last greenfields mines of the Pilbara iron ore boom.

He said the reluctance by miners to allocate billions of dollars towards new mines was driven by the fact that Chinese raw steel production had slumped from a growth rate of 24 per cent almost a decade ago to as low as 3.4 per cent in coming years.

Editorial: Diamonds a lodestar in Canadian mining firmament – by John Cumming (Northern Miner – April 23, 2014)

April 24, 2014

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists. jcumming@northernminer.com

While much of the global mining industry has been limping along under sagging commodities prices and looming oversupply, one of the brightest spots has been the Canadian diamond-mining industry, which has weathered its wild, rocky youth and settled into its role as a reliable discoverer, developer and miner of top-quality diamonds.

It remains one of the most difficult, long-shot tasks in mining: finding and developing an economic diamond deposit. And it takes a special kind of investor to embrace diamond miners’ extreme risk–reward ratios and extra-long time horizons. But taking a look across Canada, we see all kinds of positive developments in the next generation of diamond companies and their assets.

This month Dominion Diamond — formerly Harry Winston Diamond — is heading into its second year as owner and operator of the prized Ekati open-pit and underground diamond mine in the Northwest Territories, picked up for US$553 million from BHP Billiton on April 10, 2013.

On a 100% basis, Ekati is home to 18.8 million carats in reserves in four pipes, plus an eye-popping 127 million carats in the measured and indicated category and 19 million carats in the inferred category, all in eight pipes.