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Agnico delivers record gold production in third quarter – by Peter Koven (National Post – October 24, 2013)

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

TORONTO – Agnico Eagle Mines Ltd. kicked off the third-quarter gold earnings season with a strong result that sets a positive tone for the rest of the sector.

The Toronto-based miner’s adjusted earnings came in at US$60.5-million, or US35¢ a share, which was well above the highest analyst estimates. Agnico also boosted its full-year production guidance and announced deeper cost cuts.

The stock jumped more than 15% in early trading on Thursday. “We had some pretty solid production across the board,” chief executive Sean Boyd said in an interview, adding the company has said for months that the second half of 2013 would be stronger than the first half.

The results show gold companies can thrive in a weaker gold price environment, a major concern for investors over the past several months. Agnico’s gold production in the quarter reached a record 315,828 ounces, driven by a strong result from the Meadowbank mine in Nunavut, which opened in 2010. That mine performed poorly in its first couple of years of operation, but has turned a corner.

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Platinum Shortages Extending as Car Sales Quicken: Commodities – by Nicholas Larkin (Bloomberg News – October 24, 2013)

http://www.bloomberg.com/

Platinum and palladium will be the best performing precious metals next year as record global car sales will keep them in short supply for a third year, according to the most-accurate forecasters.

The metals, used in catalytic converters, will be in a shortage for the longest stretch since 2005 for platinum and 2000 for palladium, Barclays Plc and Johnson Matthey Plc data show. Platinum will gain 13 percent to average $1,635 an ounce by the fourth quarter of 2014, according to the mean of eight estimates by the most-accurate analysts tracked by Bloomberg in the past two years. Palladium will gain 10 percent to average $823 an ounce, the most for a quarter since 2001.

While gold and silver have slumped 20 percent or more because of diminishing faith in them as a store of value, investors are bullish on platinum and palladium. Growth in car sales is projected to accelerate to 4.8 percent in 2014 from 2.7 percent this year, according to LMC Automotive Ltd., at a time when metal stockpiles are contracting as mining companies fail to keep pace with demand.

“Platinum and palladium markets show the tightest supply and demand among precious metals and probably will throughout next year as well,” said Daniel Briesemann, an analyst at Commerzbank AG in Frankfurt and the most-accurate palladium forecaster tracked by Bloomberg over the past two years. “Industrial demand should stay high.”

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Cliffs threatening to pull out of Ring Of Fire – CBC Sudbury Morning North Markus Schwabe (October 23, 2013)

http://www.cbc.ca/morningnorth/ For the interview, click here: http://bit.ly/1af3mTb Cliffs Natural Resources is saying it needs the government’s help, or else it will pull out of the Ring of Fire mining development. At issue are wetlands that are currently staked by a much smaller company, which Cliffs needs to build a road.

UPDATE 2-Mining slump weighs on Nordic suppliers Sandvik, Metso – by Niklas Pollard and Johannes Hellstrom (Reuters India – October 24, 2013)

http://in.reuters.com/

STOCKHOLM, Oct 24 (Reuters) – Swedish machinery and tool maker Sandvik said on Thursday a sharp fall in demand from a shrinking mining industry was showing signs of levelling out.

But the slump still hit its earnings, and led to a fall in orders at Finnish rival Metso, which also stepped up a programme of cost cuts.

The global mining industry is under pressure to reduce overheads as demand for raw materials levels off after a decade of strong growth, and sector heavyweights led by BHP Billiton and Rio Tinto have slashed capital spending by billions of dollars.

The cuts have translated into job losses and plunging order intakes for a cluster of Nordic suppliers.

Sandvik, which together with Swedish peer Atlas Copco supplies more than half the world’s underground mining gear, said the order intake in its mining business fell 17 percent year-on-year in the third quarter. The rate of decline eased from the second quarter, however.

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Caterpillar hit by mining sector’s woes – by Rachelle Younglai (Globe and Mail – October 24, 2013)

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.

The mining industry’s woes are spreading with Caterpillar Inc. becoming the latest casualty of weak metal prices.

The company, often viewed as an economic bellwether, on Wednesday slashed its sales forecast and reported a profit shortfall this quarter because of less demand for its giant tractors and equipment used to move large pieces of earth.

“This is an unfortunate consequence of what is going on at the top of the food chain,” said Blake Langill, mining leader with Ernst & Young LLP.

A combination of lower metal prices and high costs has forced the largest mining companies such as Barrick Gold Corp. to suspend projects and sell expensive mines in order to survive.

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Christy Clark’s unenviable path to B.C. pipeline prosperity – by Jeffrey Jones (Globe and Mail – October 24, 2013)

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 — The last time a Canadian Premier complained loudly about getting shortchanged in energy developments, he dug in his heels and made what turned out to be very lucrative deals for his province.

That was Newfoundland’s Danny Williams, who in the past decade demanded better terms from the world’s largest oil majors as they planned the Hebron project on the Grand Banks.

The pugnacious former leader won the right to buy a 4.9-per-cent stake in the multibillion-dollar development, and established a policy for equity positions in future projects. He also imposed a new royalty regime that allowed the province to benefit from rising oil prices.

Now, on the other side of the country, British Columbia Premier Christy Clark faces the prospect of questionable returns for her province from massive energy developments, with a few unique twists.

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Opposition puts heat on Liberals over Ring of Fire – by Ian Ross (Northern Life – October 23, 2013)

http://www.northernlife.ca/

The Liberal government took a beating Tuesday in the Ontario legislature over the lack of progress in the Ring of Fire exploration camp.

With Cliffs Natural Resources threatening to make a major decision on its stalled Black Thor chromite deposit in the James Bay region, Opposition MPPs went after Premier Kathleen Wynne’s government during Question Period on Tuesday.

More than a year after the Ohio-based mining giant named Sudbury was the best site for a ferrochrome refinery to process its Ring of Fire ore, Algoma-Manitoulin MPP Mike Mantha said “it has finally become clear that not only did this government not have a real deal with Cliffs, but the company is about to pull out of Ontario because of the mess this government has made of the Ring of Fire development plans.”

Mantha questioned the government’s leadership on addressing some outstanding project-related issues of transportation, electricity prices, the environment and consultation. “The Liberal government’s lack of action sends a bad message to companies who are willing to invest in Ontario.”

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Sprott open letter challenges WGC/GFMS gold demand figures – by Lawrence Williams (Mineweb.com – October 23, 2013)

http://www.mineweb.com/

Eric Sprott, challenges the most generally accepted data on gold supply/demand and feels that analyst reliance on this severely impacts their predictions and thus the gold price itself.

LONDON (MINEWEB) – Strong precious metals advocate, Eric Sprott, thinks there is something haywire in the gold supply/demand statistics published regularly by the World Gold Council and relying on data compiled for it by Thomson Reuters GFMS. In Sprott’s view, and this is accompanied by his own research figures, the GFMS data is flawed – yet it tends to be the industry standard taken as the definitive position by gold follower around the globe.

In this context, Sprott has written an ‘Open Letter’ to the World Gold Council, putting forward his company’s own take on the real position in the gold supply/demand equation and draws the conclusion that global gold demand exceeds available new supply by a substantial margin. To read the ‘Open Letter’ in full click here.

Indeed Sprott’s analysis of the position echoes, and expands on, some of the conclusions drawn by Mineweb in some recent articles – not least in terms of the gold flows to Asian and Middle Eastern nations in general, and to China and India in particular.

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Cliffs VP wants Queen’s Park to find Ring of Fire solution – by Ian Ross (Northern Ontario Business – October 23, 2013)

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.

Bill Boor hesitates when asked if his company would have dumped a half-billion dollars in Ontario’s Ring of Fire if, back in 2009, it would have known of the myriad of economic, political, cultural, and environmental challenges in trying to develop a mine in the James Bay region.

“That’s a tough question when we’re right in the middle of the story,” said the vice-president of global ferroalloys for Cliffs Natural Resources, who is the overseer of its Black Thor chromite project.

“I do think about that from time to time. We believe in what we’re doing and this is a good project.” Cliffs is heading to the Ontario Superior Court to appeal a ruling that denied Cliffs overland access to Black Thor. Ontario’s Mining and Lands Commissioner ruled on Sept. 10 against the company which was seeking an easement to run a road on the mining claims of KWG Resources.

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The alarm is ringing [Ring of Fire] (Thunder Bay Chronicle-Journal Editorial – October 23, 2013)

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

THE main player in the big Ring of Fire mineral belt has reiterated a warning it might have to abandon the project while the provincial government continues to say next to nothing. Cliffs Natural Resources upped the severity of its concern this week, saying it is definitely considering an end to its stake in the rich chromite deposit that analysts bet will almost single-handedly rescue the weak economy of Northern Ontario.

Last month, Cliffs expressed dismay at a judicial ruling against its bid for a route out of the Far North, intimating it could impact the company’s future interests. The route would pass over a competitor’s staked land. Before that, it signalled concern by ceasing its environmental review of the project, blaming provincial indecision over responsibilities, among other issues.

Three such warnings are either a signal of genuine misgivings or a case of crying wolf. Apparently, the province believes it is the latter since it continues merely to insist the Ring remains a top priority. Of course it is. Something this big could solve a host of economic issues that have bedeviled successive governments and impoverished many northerners.

Ontario continues to claim that its negotiations with various parties to the Ring of Fire are fruitful, yet all parties remain at odds.

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Quest to move ahead with Quebec rare-earth project after positive results – by Bertrand Marotte (Globe and Mail – October 23, 2013)

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.

MONTREAL — A Canadian mining company vying to become one of the world’s major producers of heavy rare-earth minerals says it’s moving ahead with development of its Northern Quebec deposit after positive results from a prefeasibility study.

Quest Rare Minerals ltd. estimates total construction capital costs for development of its Strange Lake deposit at $2.57-billion, based on a minimum mine life of 30 years. It will be one of the world’s largest and highest-grade heavy rare-earth mining projects and a planned processing facility in Southern Quebec will be North America’s largest such operation, the company said on Wednesday.

Quest is in competition with other companies to be the first to get production up and running in order to take advantage of supply constraints resulting from Chinese restrictions on export of the minerals. The country is the world’s top producer of rare-earth minerals and wants to guarantee supplies amid huge internal market demand.

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COLUMN-BHP, Rio Tinto show commodity game has changed – by Clyde Russell (Reuters U.S. – October 23, 2013)

 http://www.reuters.com/

Clyde Russell is a Reuters market analyst. The views expressed are his own.

LAUNCESTON, Australia, Oct 23 (Reuters) – The latest production reports by Anglo-Australian mining giants BHP Billiton and Rio Tinto show just how much the commodity market has changed in the past year.

BHP and Rio’s quarterly statements underline that mining is now a game of producing the highest volumes at the lowest costs, while at the same time scaling back on spending.

This seems like a logical response to concerns over slowing demand growth from top consumer China, whose appetite for commodities drove a decade-long boom in developing projects to boost supply.

The jury is still out on whether the major resource companies stopped spending in time to avoid a major bust in commodity prices, or whether new supply still in the pipeline will deliver a crashing end to the China-led boom. Certainly both BHP and Rio made much of their efforts to boost volumes at lower costs, while scaling back capital expenditure.

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‘They are legal’ [KWG staking corridor into Ring of Fire] – by Jamie Smith (tbnewswatch.com – October 23, 2013)

http://www.tbnewswatch.com/

A staked corridor into the Ring of Fire was done illegally, accuses a First Nations chief.

In 2009 KWG Resources staked a north-south corridor leading into the area as a proposed rail route. The staked area was vital for the project as a series of sand ridges averaging 100 metres wide covered an otherwise impassable stretch of land.

Cliffs Natural Resources wants to use that same corridor for an all-weather road. Recently officials with the Cleveland-based mining company said their plans for the Ring of Fire might be in jeopardy if the province doesn’t step in and allow for construction of the all-season road.

Marten Falls chief Eli Moonias said Wednesday that the corridor was staked illegally and without consultation with his community while members were protesting near the Ring of Fire in 2009.

“If they had worked with us from the beginning we might not be in the position that we’re in now,” he said during an interview with CKPR Radio Wednesday. Moe Lavigne, KWG’s vice-president of exploration and development, said that under the provincial mining act the only way to make claims is to stake them, which is what the company did.

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Before he was a billionaire, Andrew ‘Twiggy’ Forrest ran with a colourful crowd – by Paul Garvey (The Australian – October 23, 2013)

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

BEFORE he became the nation’s greatest philanthropist, Andrew Forrest was a fast-talking salesman who borrowed millions of dollars from a convicted drug dealer and employed disgraced former West Australian premier Brian Burke to help him smash the BHP Billiton-Rio Tinto duopoly in the Pilbara iron ore industry.

Mr Burke, a lobbyist and former close adviser to Mr Forrest, boasts in a new book to be published next week that he was able to lean on bureaucrats and MPs to have key legislation passed for the entrepreneur in just a few months, despite the process normally taking 18 months.

Twiggy: The High-Stakes Life of Andrew Forrest, by Andrew Burrell, a Perth-based journalist with The Australian, also details how four judges in four separate court cases have questioned the businessman’s ethics and truthfulness during his colourful career. Mr Forrest rejected repeated approaches to co-operate with Burrell and to respond to claims made by others in the book.

The unauthorised biography investigates how Mr Forrest transformed himself, through boundless energy and cunning, from a corporate pariah after being removed as chief executive of Anaconda Nickel in 2001 into one of Australia’s most successful entrepreneurs and a philanthropist who is feted by the establishment.

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Platinum Group suffers funding setback at South Africa mine – by Geoffrey York (Globe and Mail – October 23, 2013)

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.

JOHANNESBURG — In a mining sector struggling with a toxic combination of rising costs, falling prices and labour unrest, Vancouver-based Platinum Group Metals Ltd. believed it could buck the trend.

That dream has now taken a serious hit, with one of its partners abruptly pulling out of its $506-million platinum mining project in South Africa. It’s just the latest blow to the slumping platinum industry, beset by labour violence and soaring costs, although the Vancouver company is optimistic that it can keep its plans alive.

About half of the platinum companies in South Africa – the world’s biggest platinum producer – are estimated to be losing money, industry officials say.

Platinum Group president Michael Jones says his company will try to find new financing to push ahead with its mine in the western limb of the Bushveld complex in South Africa, despite the loss of $21.8-million in planned funding from its partner, Wesizwe Platinum, which holds 26 per cent of the project.

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