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Walter Energy idles Canadian mines as expensive acquisition comes back to haunt – by Peter Koven (National Post – April 16, 2014)

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

TORONTO – A Canadian acquisition from three years ago continues to create headaches for U.S. coal miner Walter Energy Inc.

When Walter paid $3.3-billion in cash and stock for Vancouver-based Western Coal Corp., the company thought it was creating a dominant North American coal producer for years to come. The metallurgical coal market was red-hot, and Western provided Walter with one of the best production growth profiles in the industry.

Unfortunately for Walter, the deal has backfired in almost every conceivable way. Coal prices plummeted; the company ran into balance sheet problems; it ended up in a proxy fight with a former Western shareholder; and on Tuesday, Walter announced it will idle all the Canadian operations it bought in the Western transaction.

Walter has been eyeing a closure of its Canadian mines for months. But the tipping point came after a quarterly coal sales contract got settled around US$120 a tonne. The cash costs at Walter’s Canadian and U.K. operations were above US$132 in the quarter ending Dec. 31, meaning Walter would be bleeding cash if it kept these mines running.

“Our CEO said that we’re just as well served to leave the coal in the ground and wait for a time when the market conditions are better,” Walter spokesman Tom Hoffman said.

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SEC conflict mineral rule violates freedom of speech, U.S. court says – by Andrew Zajac (National Post/Bloomberg News – April 16, 2014)

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

A U.S. Securities and Exchange Commission rule requiring companies like Boeing Inc. and Apple Inc. to disclose whether any “conflict minerals” are used in their products violates their free-speech rights, an appeals court in Washington said.

The rule was part of the 2010 Dodd-Frank Act overhauling regulations of securities markets and applies to certain minerals, including gold, tin, tungsten and tantalum, mined in Democratic Republic of the Congo and neighbouring countries. It was intended to help ensure that use of the minerals didn’t benefit armed groups responsible for violence in the region.

The appeals panel decision represents the second time courts have faulted regulators for carrying out a requirement of the 2010 Dodd-Frank Act. SEC Chair Mary Jo White said in October the goals of the Dodd-Frank disclosure mandates were laudable while questioning Congress’s decision to have her agency implement them.

The SEC’s authority to require disclosure of important information to investors shouldn’t be used to “effectuate social policy or political change,” Ms. White said. The requirement to disclose the information will cost thousands of companies as much as US$4-billion to put in effect, according to the SEC.

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Big ore find saved Timmins 50 years ago – by Jeff Labine (Timmins Daily Press – April 15, 2014)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Half a century ago, the Timmins economy faced possible collapse. The Hollinger gold mine, which had been operating since 1910, was on its last legs and there didn’t seem to be any suitable replacement to keep the economy flowing in the city.

Rumours started to spread about a possible ore discovery in the area, but few facts were known at the time. Texas Gulf Sulfur Company had made a discovery of a lifetime in November 1963 but the company kept that fact quiet for months.

The American-based company didn’t make the discovery public until April 16 1964. The Daily Press ran the news that the company had discovered more than 23 million tons of ore.

The Kidd Creek mine would become world-famous for its copper, zinc and silver deposits and also earn the distinction of being the deepest base metal mine in the world reaching depths as far down as 10,000 feet.

But trying to break that story was a difficult task for Gregory Reynolds, a reporter at the time for The Daily Press. He and a fellow reporter dogged miners and the higher-ups at Texas Gulf, trying to find someone who could confirm their suspicions that something big was going to happen.

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Jail mine CEOs: Sudbury forum – by Carol Mulligan (Sudbury Star – April 16, 2014)

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

Jailing one or two chief executive officers of companies where workers were killed on the job is all it would take to bring about the societal change necessary to finish what United Steelworkers started 40 years ago in Elliot Lake, says a union leader.

Enforcing the provisions of the Westray amendments to the Criminal Code of Canada, that hold CEOs and company directors criminally responsible for negligence causing a worker’s death, will demonstrate Canadians won’t accept workplace deaths as the cost of doing business.

Stephen Hunt, District 3 director for United Steelworkers and one of the officials spearheading USW’s “Stop the Killing: Enforce the Law” campaign, spoke to an audience of about 60 people Tuesday at the first day of a forum commemorating the 1974 Elliot Lake Miners’ Strike.

The three-week wildcat strike by more than 1,000 Steelworkers at Denison Mine prompted the provincial government to appoint a royal commission that resulted in the enactment of the Occupational Health and Safety Act.

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Inquest recommendations could have saved men: Fram – by Carol Mulligan (Sudbury Star – April 16, 2014)

 

http://enforcethelaw.ca/?language=en

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

If recommendations from the inquest into the 1995 death of Clifford Bastien at Stobie Mine had been mandatory, Jordan Fram and Jason Chenier would be here today, says Fram’s mother.

Wendy Fram spoke at a conference Tuesday at the Steelworkers’ Hall about a USW campaign called “Stop the Killing: Enforce the Law.” The campaign calls on Canadians to sign a petition urging provincial, territorial and federal governments to enforce the Westray amendments to the Criminal Code of Canada.
The Westray law holds company executives and directors criminally accountable for negligence that is responsible for a worker being killed on the job.

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NEWS RELEASE: Agnico Eagle and Yamana Gold announce a friendly acquisition agreement with Osisko Mining Corporation

(All amounts expressed in U.S. dollars unless otherwise noted)

C$8.15 per share offer provides superior shareholder value

TORONTO, April 16, 2014 /PRNewswire/ – Agnico Eagle Mines Limited (NYSE: AEM, TSX:AEM) (“Agnico Eagle”), Yamana Gold Inc. (TSX:YRI, NYSE: AUY) (“Yamana”) and Osisko Mining Corporation (TSX:OSK; Deutsche Boerse:EWX) (“Osisko”) are pleased to announce that they have entered into an agreement (“the Agreement”) pursuant to which Agnico Eagle and Yamana will jointly acquire 100% of Osisko’s issued and outstanding common shares for total consideration of approximately C$3.9 billion, or C$8.15 per share. The total offer consists of approximately C$1.0 billion in cash, approximately C$2.33 billion in Agnico Eagle and Yamana shares, and shares of a new company (“Spinco”) with an implied value of approximately C$575 million.

The offer represents approximately an 11% premium to the implied value of the current Goldcorp Inc. (“Goldcorp”) hostile bid. Agnico Eagle, Yamana, and Osisko will host a joint conference call today at 10:00 a.m. EDT to discuss the transaction.

Terms of the Agreement

Under the Agreement, Agnico Eagle and Yamana will form a joint acquisition entity (with each company owning 50%) which will acquire by way of a plan of arrangement all of the outstanding common shares of Osisko.

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COMMENT: The Elliot Lake strike and 40 years of safer mines – by Marilyn Scales (Canadian Mining Journal – April 15, 2014)

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

Forty years ago uranium miners in Elliot Lake, ON, staged a wildcat strike to call attention to the need for improved health and safety conditions. Silicosis and lung cancer were occupational hazards. The miners’ determination, and that of their union, led to the Occupational Health and Safety Act

To commemorate 40 years of increasing mine safety, the United Steelworkers (USW) is memorializing the Elliot Lake strike this week, April 15 -17 at the USW Local 6500 Steelworkers Hall and Conference Centre in Sudbury, ON.

Highlight of the tribute is Wednesday’s trip to Elliot Lake where participants will set up a mock picket at the entrance to the former Denison mine. A tour of the Elliot Lake Nuclear and Mining Museum and a re-dedication ceremony at the Miners’ Memorial are also planned.

Other activities in Sudbury include a look at the history of the Elliot Lake miners’ strike, a review of occupational disease, and an update on the current Ontario Mining Health, Safety and Prevention Review.

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More grassroots prospecting investment required in BC – by Henry Lazenby (MiningWeekly.com – April 14, 2014)

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

TORONTO (miningweekly.com) – Investment in the grassroots level of prospecting and early-stage exploration are critically needed in British Columbia to uncover new deposits that, in turn, would encourage more investment in advanced exploration and resource development, the Association for Mineral Exploration British Columbia (AME BC) president and CEO Gavin Dirom said.

He told Mining Weekly Online that despite the province attracting significant investment in advanced-stage exploration and resource development, there is a critical need for more investment in grassroots level prospecting to ensure that the province’s mining output remains on an upward growth trajectory.

MONEY MAKES THE DRILLS GO ROUND

Dirom said that British Columbia had succeeded in recent years in attracting more exploration investment. He said the province had managed to lift investor confidence in the past five years or so, attracting more investment than what it typically did in the past, which was a significant development.

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Vale Lands $2.8 Billion Brazil Funding for Iron Expansions (1) – by James Attwood (Bloomberg News – April 15, 2014)

http://www.bloomberg.com/

Vale SA (VALE5) secured 6.2 billion reais ($2.8 billion) of funding from Brazil’s state development bank for expansions at Carajas, the world’s largest iron-ore complex.

The BNDES loan will help finance Rio de Janeiro-based Vale’s railway network and a new mining and processing unit in Para state with annual capacity of 90 million metric tons, the bank said in a statement distributed by e-mail today.

Chief Executive Officer Murilo Ferreira is seeking to recover ground in the seaborne iron-ore market that it lost to Australian rivals BHP Billiton (BHP) Ltd. and Rio Tinto Group since 2007. Serra Sul, part of Carajas in northern Brazil, is the industry’s most expensive project ever at almost $20 billion.

The expansion and related distribution network will generate about 30,000 jobs at the peak of construction and is scheduled to start operating in 2016, BNDES said. It will be the first major iron-ore venture to fully replace in-mine trucks with conveyor belts, according to the miner.

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News Release: Creating Cleaner Air in Ontario: Province Has Eliminated Coal-Fired Generation

April 15, 2014 5:00 a.m.Ministry of Energy

Ontario is now the first jurisdiction in North America to fully eliminate coal as a source of electricity generation. The Thunder Bay Generating Station, Ontario’s last remaining coal-fired facility, has burned its last supply of coal.

Operated by Ontario Power Generation, Thunder Bay Generating Station was the oldest coal-fired station in the province. The plant is scheduled to be converted to burn advanced biomass, a renewable fuel source. The province has replaced coal generation with a mix of emission-free electricity sources like nuclear, waterpower, wind and solar, along with lower-emission electricity sources like natural gas and biomass.

Ontario has fulfilled its commitment to end coal generation in advance of its target of the end of 2014. A coal-free electricity supply mix has led to a significant reduction in harmful emissions, as well as cleaner air and a healthier environment.

Providing clean, reliable and affordable power is part of the government’s economic plan that is creating jobs for today and tomorrow. The comprehensive plan and its six priorities focus on Ontario’s greatest strengths – its people and strategic partnerships.

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World Gold Council Press Release: NEW REPORT PREDICTS SUSTAINED STRONG GOLD DEMAND IN CHINA IN NEXT FOUR YEARS

http://www.gold.org/

Follow the World Gold Council @GOLDCOUNCIL and download the full report at http://www.gold.org/supply-and-demand/china-report

New York, 15 April 2014 – A major report published today by the World Gold Council “China’s gold market: progress and prospects” suggests that private sector demand for gold in China is set to increase from the current level of 1,132 tonnes(t)[1] per year to at least 1,350t by 2017[2]. Following the record level of Chinese demand in 2013, which saw the country become the world’s largest gold market, the report suggests that while 2014 is likely to see consolidation, the succeeding years are likely to see sustained growth.

The report examines the factors that have driven China’s rise to become the number one producer and consumer of gold since the market began liberalising in the late 1990s. It also highlights why despite this steep growth in demand, the market will continue to expand, irrespective of short term blips in the economy.

The next six years will see China’s middle class grow by over 60%, or 200m people, to a total of 500 million. Comparing this to the total population of the US, which stands at 319m, puts the size of this new market of affluent consumers, with the propensity to buy gold, in perspective.

In addition to these newly emerging middle classes, rising real incomes, a deepening pool of private savings and rapid urbanisation across China suggest that the outlook for gold jewellery and investment demand in the next four years will remain strong.

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HudBay CEO disputes Augusta’s claims of rival bidders – by Rachelle Younglai (Globe and Mail – April 15, 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.

HudBay Minerals Inc. is asking Canadian regulators to get rid of Augusta Resource Corp.’s defense plan so that it can acquire Augusta’s copper project in Arizona.

HudBay already owns a 16 per cent stake in Augusta. But the Toronto-based company is blocked from acquiring more shares because Augusta adopted a shareholder rights plan, also known as a poison pill, when it found out HudBay had accumulated such a large position.

The plan allows non-HudBay shareholders to buy additional shares at a discount, which would make it prohibitively expensive for the Toronto miner to acquire the rest of Augusta. On Monday, HudBay asked the British Columbia Securities Commission to make a decision before its hostile offer expires May 5.

Vancouver-based Augusta is scheduled to hold a meeting May 2 where shareholders will get to vote on whether they want to keep their poison pill in place. HudBay’s chief executive David Garofalo said if regulators strike down the poison pill, that would make the shareholder vote moot.

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Bands go to bat for Ring of Fire road – by Staff (Thunder Bay Chronicle-Journal – April 15, 2014)

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

Two First Nations that stand to benefit economically from the development of the Ring of Fire mining belt have “reaffirmed” their commitment to support a north-south road into the mineral-rich region.

“The development of the Ring of Fire requires infrastructure, and the first priority is to build a road that will allow people and goods to move,” Marten Falls and Aroland said Monday in a joint news release.

The two bands also expressed a willingness to “work with mining companies, governments and other partners” to ensure First Nations benefit form any development.

Potential chromite and nickel mines are located in the Ring of Fire about 550 kilometres northeast of Thunder Bay. Chromite is an ingredient in stainless steel.

A 340-km north-south road into the Ring of Fire proposed by Cliffs Natural Resources was kiboshed last fall when Ontario’s Mining and Lands Commission ruled it would infringe on mining claims held by other companies.

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At BHP, the stars align for second run at Potash Corp – by Boyd Erman (Globe and Mail – April 15, 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.

A window is opening for BHP Billiton Ltd. to once again try a takeover of Potash Corp. of Saskatchewan.

Speculation is intense in the fertilizer industry that BHP may mount another campaign to win over Saskatoon-based Potash Corp. after being shot down in 2010. It failed the federal government’s murky “net benefit test” after a strong push from a Saskatchewan government that opposed the transaction.

Bankers, executives and advisers on the political side agree that BHP would be crazy not to look again. To be clear, there is no sign that any potential deal is under way. But there are numerous reasons that people are talking about the possibility.

The numbers work. The personalities are closer to working. Even the politics are not insurmountable because the landscape has shifted, especially in Saskatchewan. Finally, what was true in 2010 remains true now: Owning Potash Corp. is the best way to get into the potash business.

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UPDATE 2-Bad weather cuts Rio Tinto’s iron ore shipments – by James Regan (Reuters India – April 15, 2014)

http://in.reuters.com/

SYDNEY, April 15 (Reuters) – Rio Tinto’s iron ore shipments fell 8 percent in the first-quarter from the previous quarter due to weather-related disruptions in Australia and Canada, but the miner said it was on track to meet its full-year target.

Production still jumped 16 percent on the same quarter a year ago as the world’s No. 2 iron ore producer behind Brazil’s Vale ramps up production at its Australian mines to meet growing demand from China.

“It appears they were hit a litle harder than we expected by the weather, though we don’t see any issues in meeting their full-year target,” said RBC Capital Markets analyst Chris Drew.

Iron ore has replaced other industrial and precious commodities such as coal, gold and silver as the mineral with the most profit potential, delivering bumper earnings for giant low-cost miners such as Rio and BHP Billiton.

Iron ore prices .IO62-CN=SOI have recovered 12 percent since a steep dip in March on weaker Chinese steel prices. At the current price of $117 a tonne, Rio Tinto enjoys a profit margin of over $60 a tonne.

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