Republic of Mining

The Importance of Canadian Flow-through Share Financing and the Mineral Exploration Tax Credit – by Ross Gallinger (Toronto, Canada – November 14, 2012)

November 22, 2012

PDAC Executive Director Ross Gallinger gave this speech at the Toronto Stock Exchange on November 14, 2012.

Check Against Delivery

Thank you Minister Oliver for your remarks and for being here with us this evening. We sincerely appreciate your ongoing support of our industry. Your efforts are paramount to our success, and we thank you for your hard work.

For those of you who don’t know me, my name is Ross Gallinger and I am the Executive Director of the Prospectors & Developers Association of Canada.

For 80 years, our association has been a leading voice in representing the mineral exploration and development industry. The PDAC has more than 10,000 members, both individual and corporate, and exists to protect and promote mineral exploration and development, and to ensure a robust mining industry in Canada.

As Minister Oliver and others have noted on numerous occasions, the natural resources sector, and in particular the exploration and mining sector, are vital to Canada’s economic sovereignty. Mineral exploration and junior mining operations play a key role in driving economic development, and provide employment opportunities throughout the country—especially in: Northern, Aboriginal and remote communities.

Mixed feelings on plans and permits – by Norm Tollinsky (Sudbury Mining Solutions Journal – November 2012)

November 22, 2012

Sudbury Mining Solutions Journal is a magazine that showcases the mining expertise of North Bay, Timmins and Sudbury.

Mining Act regulations to be fully enforced April 1, 2013

The jury is still out on the new Mining Act regulations in Ontario that require prospectors and exploration companies to consult with First Nations and apply for plans and permits prior to carrying out most exploration activities.

The new rules have triggered a chorus of grumbling and stoked fears of major delays, excessive demands by First Nations and the flight of exploration dollars to other jurisdictions, but Ross Gallinger, executive director of the Prospectors and Developers Association of Canada, claims they provide “certainty in terms of the steps required and transparency for stakeholders.

“Some people are going to look at this permitting as a bit of a delay, but thinking through the process, the amount of certainty outweighs the potential delay,” he said.

“The duty to consult has already been part of the process and, from a best practice perspective, the PDAC has always been an advocate of early and often consultation as a means to facilitate access.”

Is Canada closed to foreign investment? – by Matthew McClearn (Canadian Business Magazine – November 19, 2012)

November 22, 2012

http://www.canadianbusiness.com/

Canada was, quite literally, built with foreign investment. From the mid–19th century, British investors supplied much of the capital necessary to finance the railways, buildings, canals and other infrastructure its colony required. Later, American industrialists built lumber and newsprint mills, mines and manufacturing plants. Despite constant internal bickering about the consequences of allowing it, Canada came to be regarded internationally as a nation quite open to receiving foreign capital.

In the past five years, however, several high-profile takeovers proposed by foreigners were spurned. Most recently, Ottawa surprised many by blocking a bid by Malaysia’s Petroliam Nasional Berhad (Petronas) to acquire Progress Energy Resources for $5.9 billion. More important, this prompted speculation that China National Offshore Oil Corp.’s outstanding $15.1-billion offer for Nexen might receive similar treatment.

Most bizarrely, provincial officials in Quebec intervened this summer to oppose an attempt by Lowe’s, the American home-improvement retailer, to purchase Rona, that province’s celebrated vendor of hammers, reciprocating saws and drywall. And while Bell Canada is a decidedly domestic company, the recent decision by the CRTC to reject its bid for Astral Media only confirmed in some minds the notion that Ottawa is in a mood to meddle in large deals.

Fraser Institute Mining Survey 2012/2013 Needs Participants

November 22, 2012

The Fraser Institute, Canada’s leading public policy think-tank, conducts an annual survey of how miners and explorers rate the investment climate of jurisdictions around the world. The results identify the countries, states, and provinces whose policies create the greatest barriers to investment in the mining sector.

The results of the 2011-2012 Mining Survey, which elicited a great deal of media attention, can be downloaded as a free PDF at:

http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/publications/mining-survey-2011-2012.pdf

We are asking you to participate in the 2012-2013 Survey of Mining Companies. Your participation will help to ensure that the results reflect the views of professionals with first-hand knowledge of the mining industry investment climate in countries around the globe. Broad involvement in the survey will increase the number of jurisdictions evaluated, thereby increasing the number of governments who get candid and anonymous opinions on their policies. Additionally, all information collected through the survey remains confidential.

You can complete the survey on line in less than 15 minutes. To thank you for your participation, we will send you an email alert the very moment the survey is released, with a link to the survey. You will have the information at the same instant as the media.

Give More For Less [Flow-through share financing] – by Lisa G. Davis (Advisor.ca – October 16, 2012)

November 22, 2012

Lisa G. Davis, LL.B, ICD.D, is head of the legal and operations teams for Toronto based PearTree Financial Services Inc.

Advisors should beware of tax-shelter offerings that either have no underlying business purpose or are based on schemes so aggressive that reassessment is a foregone conclusion.

But done right, flow-through share financing lets major charitable donors minimize taxes while maximizing giving.

HOW FLOW-THROUGH WORKS

When resource companies prospect, they rarely find an ore body of sufficient value to warrant the building of a mine. Under the flow-through tax regime, a mining company or oil and gas explorer can issue new shares to finance new or future exploration activity as specifically defined in the Income Tax Act.

Under the flow-through-share subscription agreement, the company agrees for its tax deduction to benefit the investors who fund that future exploration. There are many safeguards built into the flow-through system to ensure balance and to limit fundraising to what is actually needed for exploration over the 12-to-23 months post funding. There is also a natural end to the availability of this structure.

NEWS RELEASE: SOLID GOLD RESOURCES CORP.PRIVATE PLACEMENT AND SHARES FOR DEBT

November 22, 2012

Toronto, November 19, 2012 – Solid Gold Resources Corp. (“Solid Gold”) (TSXV: SLD) is pleased to announce a non-brokered private placement (the “Offering”) pursuant to which it proposes to raise gross proceeds of up to $300,000 through the issuance of common share units (“Units”) at a price of $0.05 per Unit. Each Unit will consist of one common share (“Common Share”) in the capital of Solid Gold and one common share purchase warrant (“Warrant”) of Solid Gold. Each Warrant shall entitle the holder thereof to acquire one Common Share at an exercise price of $0.10 per Common Share for a period of two years following the closing of the Offering. All securities issued pursuant to the Offering will be subject to a four-month hold period. Finders’ fees may be payable to eligible persons with respect to the Offering and will be subject to regulatory approval. The net proceeds from the Offering will be used for working capital. Closing of the Offering is subject to approval of the TSX Venture Exchange (the “Exchange”).

In addition, Solid Gold announces that it has entered into agreements with certain arms-length service providers, pursuant to which Solid Gold will issue 1,470,000 Common Shares and 1,470,000 Warrants in satisfaction of indebtedness of $73,500 currently owed to such service providers, based on an agreed issue price of $0.05 per share and $0.10 per Warrant. Solid Gold also announces that it has entered into agreements with certain non arms-length parties, pursuant to which Solid Gold will issue 1,170,000 Common Shares in satisfaction of indebtedness of $58,500 currently owed to such service providers, based on an agreed issue price of $0.05 per share. Solid Gold determined to satisfy the indebtedness with Common Shares in order to preserve its cash. The share issuance is conditional upon acceptance by the Exchange. The Common Shares issued in satisfaction of the indebtedness will be subject to a four-month statutory hold period from the date of issuance.

One area where we are not risk adverse [Canada junior miners] – by Douglas Mason (Globe and Mail – November 22, 2012)

November 22, 2012

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.

Canadian junior mining companies often operate in the most remote and unstable countries in the world, in a sector rife with failure

There are few business sectors where Canada can claim global dominance, but as a centre for mining development, it is an industry leader.

The Toronto Stock Exchange (TSX) and its small-cap partner, the Venture Exchange, are home to 58 per cent of the world’s public mining companies and raised 36 per cent of global mining equity finance from 2007 through 2011. Collectively, they are first in the number of listed mining companies with nearly 1,700, well ahead of competitors, the London Stock Exchange and Australia’s ASX, according to the TSX.

No other place has the same concentration and depth of services and financial market sophistication to support mining finance and development.

How does Canada do this? According to Kevan Cowan, president of TSX Markets, Canadians have a long history of participating in early-stage mining investments and a “whole ecosystem” has developed to support the industry.

Critics celebrate surprise end of mega quarry north of Toronto – by Renata D’Aliesio and Karen Howlett (Globe and Mail – November 22, 2012)

November 22, 2012

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.

MELANCTHON TOWNSHIP — While in their vast vegetable fields Wednesday, harvesting the last of their brussel sprout crop, Bill French and his son received a stunning text message: The bid to develop one of the largest rock quarries on the continent, one that would have encircled their family farm for 50 to 100 years, was dead, unexpectedly abandoned by the Canadian and American investors behind the divisive project.

The French family rejoiced as the text messages kept coming. The hard-fought battle that had united a motley crew – farmers and urbanites, politicians and entertainers, aboriginals and top Toronto chefs – was over, for a while at least. Some of Southern Ontario’s finest farmland would no longer be transformed into a massive limestone pit.

“It’s really good news,” said Mr. French, 57, said as he sat on his red tractor. “I was surprised they withdrew it this early. I thought it would go on for another five years.

The story behind the mega-quarry began six years ago when Ontarian John Lowndes began buying up prime farmland in Melancthon Township, about 120 kilometres north of Toronto. Mr. French and other farmers contend Mr. Lowndes portrayed himself as only interested in producing potatoes, but suspicions soon surfaced. Those suspicions were confirmed last year, when The Highland Companies submitted an application to the province to develop a limestone quarry.

Coalition of farmers and urban foodies halts Ontario mega-quarry – by Joe Friesen (Globe and Mail – November 22, 2012)

November 22, 2012

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.

It would have been the biggest quarry in Canada, but it was stopped in its tracks by an unusual coalition of farmers, urban foodies, artists, environmentalists and native bands, one that suggests a model for organizing opposition to resource projects.

The movement against the Ontario quarry was launched with nothing more than a basic story. An American company had convinced local farmers it was buying up chunks of land for a potato farm. Potatoes were only part of the plan, however. It soon made an application to build a massive quarry that the opposition said would threaten the groundwater and soil in one of the most fertile land belts in the country.

The plan seemed outrageous to many locals. But how could anyone else be convinced to care if it wasn’t happening in their backyard? The rest of the province had to be persuaded that the fight was about them, too. That meant mobilizing people in the cities. The best way proved to be through their stomachs.

On Wednesday, the Highland Companies withdrew its controversial application to build a limestone quarry in Melancthon township, about 100 kilometres northwest of Toronto, citing a lack of support in the community.

The need for aggregate puts the GTA between a rock and a hard place – by Renata D’Aliesio (Globe and Mail – December 10, 2011)

November 22, 2012

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.

PLEASE NOTE THIS ARTICLE IS FROM DECEMBER/2011.

Deep beneath vast fields that grow a dozen varieties of potatoes lies a valuable gray rock tinged with light browns and blues. The rock is hard, durable and dense, part of the 400-million-year-old Amabel Formation that once belonged to a warm, shallow sea.

To Toronto’s high-rise condominium developers and road-construction engineers, this high-quality limestone, known as Amabel dolostone, is an invaluable ingredient in the making of superior concrete and asphalt. Builders turn to it when they need to make the sturdiest of structures. The CN Tower, Highway 401 and Pearson International Airport all contain bits of Amabel dolostone.

Yet this precious rock, a building block of the ever-growing Toronto region, is at the heart of a quarry battle of the likes never seen before in Ontario. Quarries are almost always controversial. No one wants to live near an industrial pit with loud blasting, thick dust and a steady stream of big trucks. But the fight over the proposed Melancthon Quarry, about 120 kilometres north of Toronto, is different.

Unlike previous conflicts over quarries that tended to remain largely local schisms, the Melancthon battle has reverberated far and wide. The effort to stop the massive pit has united farmers and urbanites, renowned Toronto chefs and aboriginals, environmentalists and affluent entrepreneurs.

Mushkegowuk wants unique mining plan – by Shawn Bell (Wawatay News – November 21, 2012)

November 22, 2012

Northern Ontario’s First Nations Voice: http://wawataynews.ca/

In response to what it claims are shortfalls with Ontario’s new mining act, Muskegowuk tribal council says it has started discussions with the province on the creation of a unique mining plan for the Mushkegowuk region.

Mushkegowuk Grand Chief Stan Louttit said it may be time for Ontario to implement specific legislation and policies giving First Nations consent over mining and exploration activities in the Mushkegowuk region.

Louttit said a clear regional plan would add certainty for industry and First Nations alike.

“We believe the recent changes to the Mining Act still do not fully acknowledge the rights of First Nations,” Louttit said in a press release. “Government, the mining companies and the public have to wake up to the harsh reality that First Nations are here.”

“We are unique, we are different, we have Treaty Rights and (government and industry) should know that consultation and consent are critical and mandatory for any activity on our homelands,” Louttit added. “Yes, there may be 133 different approaches to consultation but the cold reality is: nothing will happen until governments and companies realize this.”

Phase two of Ontario’s new mining act started to take effect on Nov. 1. Under the changes the province will inform all affected First Nations when a claim on traditional lands has been staked, and companies are required to consult First Nations identified by Ontario.

Leaders plan trades school for NAN students – by Rick Garrick (Wawatay News – November 21, 2012)

November 22, 2012

Northern Ontario’s First Nations Voice: http://wawataynews.ca/

A First Nations trade school is on the horizon after Deputy Grand Chief Goyce Kakegamic met with international aid agencies, mining companies and education officials on Nov. 16.

“Canada is opening immigration due to a shortage of skilled workers and the mining sector is bringing skilled workers from all over the country — two weeks in, two weeks out,” Kakegamic said after the meeting with about 30 international aid, mining sector and education representatives at Dennis Franklin Cromarty High School in Thunder Bay. “We have a lot of able bodies walking around in our territory. No one is going to do it for us; we are the ones that have to provide that avenue to (ensure) our students have the aspiration to go that route.”

Kakegamic said the trade school would provide an option for high school students who are interested in a career in trades.

“If they have a reachable goal (in trades), that would motivate them to attendance, that would motivate them to apply more in literacy and numeracy,” Kakegamic said. “That will give them the motivation to excel, and they can excel if you give them an opportunity.”

Kakegamic said the trade school would be focused on a variety of trades, such as carpentry, mechanical and other skilled trades, in addition to mining-specific trades.

Can a Liberal become Ring master? – by Brian MacLeod (Sudbury Star – November 22, 2012)

November 22, 2012

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

Ontario Liberal leadership candidates are trying to woo northern Ontario, but one wonders whether they’re not playing with the Ring of Fire.

That would be the 5,120-square-kilometre swath of the James Bay Lowlands that is said to contain riches in chromite and other metals that could rival the value of the Sudbury Basin, some $1 trillion worth. (Chromite is a key ingredient in stainless steel.)

Progressive Conservative Leader Tim Hudak has likened the Ring of Fire to Alberta’s oil-sands. Economist Don Drummond noted in his report that the area “offers the prospect of substantial socio-economic opportunities for all northern residents.”

More than a dozen mines have already been identified for possible development within the next five years and a smelter is set to be built north of Sudbury. Thousands of jobs are expected to be created, with millions of dollars in tax revenues rolling into the province.

In the last two weeks, Liberal leadership candidates Glen Murray and Kathleen Wynne, as well as Premier Dalton McGuinty and NDP Leader Andrea Horwath, have visited the area of the province that covers about

800,000 square km with a population of about 730,000 people.

Summary of Points North interviews about Solid Gold/First Nations Sudbury controversy – CBC Radio Sudbury (November 7 – 12, 2012)

November 22, 2012

http://www.cbc.ca/pointsnorth/

Points North interview Jason Turnbull conducted the following interviews after junior miner Solid Gold’s CEO and President Darryl Stretch gave a controversial presentation at the Ontario Prospectors Symposium in Sudbury Ontario on November 7, 2012. During that presentation, Mr. Stretch was accused of using disrespectful and racist language towards First Nations communities.

Wednesday November 7, 2012 – Tensions continue between First Nation and mining company

Mining can be a contentious issue in the north.

Click here for Wahgoshig Chief Dave Babin and NAN Grand Chief Harvey Yesno interviews: http://www.cbc.ca/video/news/audioplayer.html?clipid=2301643232

Thursday November 8, 2012 – Solid Gold responds to First Nations concerns

First Nation in the northeast raise concerns over comments made by Solid Gold president.

Click here for Solid Gold’s CEO and President Darryl Stretch and NAN Grand Chief Harvey Yesno interviews: http://www.cbc.ca/video/news/audioplayer.html?clipid=2302189668

Boom bust cycle normal in mining industry [Jason Turnbull interviews mining analyst Stan Sudol] – CBC Radio Sudbury (November 1, 2012)

November 22, 2012

http://www.cbc.ca/pointsnorth/ Slumping nickel prices and a bit of slowdown on base metal prices have caused speculation that Vale is not interested in maintaining full operations in Sudbury. Points North’s Jason Turnbull interviews Toronto-base mining analyst Stan Sudol about the recent cutbacks by Vale at their Sudbury operations. Click here for the interview: http://www.cbc.ca/video/news/audioplayer.html?clipid=2299263418