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Cash-rich mining companies hunt for bargains – by Brenda Bouw (Globe and Mail – August 15, 2011)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media. Brenda Bouw is the Globe’s mining reporter.

The correction in commodity prices is sparking a new round of merger and acquisition talk in the mining sector as cash-fat companies look to pick off competitors at cheaper prices.

Mining equities have seen a much sharper sell off when compared with metal prices in the recent market rout, which has created opportunities for acquisition-hungry companies, while leaving smaller rivals more vulnerable. That could lead to more hostile bids for miners reluctant to sell at current depressed prices.

Friendly deals will also likely be struck by companies in greater need of cash to advance projects amid the growing global economic uncertainty. After a surge in mining deals earlier this year, driven by record-setting commodity prices, negotiations cooled off in early summer as prices were driven lower by debt woes in United States and Europe and on concerns of a slowdown in Chinese economic growth.

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Tories tussle with widow over use of party logo in asbestos ad campaign – by Andy Blatchford (The Canadian Press/Globe and Mail – August 14, 2011)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media.

The federal Conservative party has sent a threatening email to the widow of an asbestos victim in the latest chapter of Canada’s debate over the hazardous mineral. A top Tory official is warning the woman to stop using the party logo in an online ad campaign against the controversial industry — a campaign she started after her husband died of an asbestos-related cancer.

Michaela Keyserlingk, whose husband Robert died in 2009 of mesothelioma, has been running an online banner since the spring that reads, “Canada is the only western country that still exports deadly asbestos!”

Conservative party executive director Dan Hilton warned Ms. Keyserlingk to stop using the Tory symbol immediately. “Failure to do so may result in further action,” Mr. Hilton wrote in a July 29 email which carried the subject title, “Unauthorized use of trademark.” The email, which The Canadian Press obtained from Ms. Keyserlingk, went on to advise her: “Please govern yourself accordingly.”

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[McGuinty] Biding his time [about Ring of Fire] – by Carol Mulligan

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. cmulligan@thesudburystar.com

The Ontario Liberals will wait to see how much money the private sector is willing to invest in infrastructure to develop the Ring of Fire chromite deposits before it puts government money into the area, says the premier.

The province will definitely have to help build infrastructure, such as roads, to bring the project online, but it wants to maximize its opportunities before it does, says Dalton McGuinty.

Any public investment would have to be shown to benefit Ontarians — and especially Northern Ontarians — and that includes businesses and First Nations.

“We’ve got an opportunity to do this in a way that’s never been done before, so we’re excited about that,” McGuinty told reporters at Laurentian University’s J.N. Desmarais Library on Saturday. “But, yes, at some point in time, it will call for an investment in infrastructure.”

He visited Laurentian to address the annual Summer Fling policy conference of Ontario Young Liberals, where he announced an initiative to help new graduates who work in the not-for-profit sector.

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Northern Ontario: A Golden Klondike – 192 million ounces of gold and counting – by Stan Sudol

(Wiki Photo)

Stan Sudol is a Toronto-based communications consultant and mining columnist. Stan.sudol@republicofmining.com

A much shorter version of this article appears in the September, 2011 issue of the Northern Miner’s Mining Markets: A Resource for Investors magazine.

A fever is spreading throughout northern Ontario, from the eastern districts adjacent Quebec to the far reaches of the northwest right up to the Manitoba border. This raging malaise is caused by a metal that has captured mankind’s attention from the dawn of time. I am referring to “gold fever” and many in northern Ontario – a vast northern territory, which is almost equal to Germany, United Kingdon, Greece and Ireland combined – are thoroughly infected or obsessed over this beautiful precious metal.

Historically, Ontario’s gold mining industry has played a major role in the settlement of the province’s northern regions and along with the Cobalt silver boom and further gold and base metal discoveries in northwestern Quebec were primarily responsible for the establishment of Toronto as today’s mine financing capital of the world.

The many gold mines that came into production during the Depression of the 1930s made a vital contribution to keeping the province solvent and with over a century of experience building many underground mines helped solidify Ontario’s hard-rock mining expertise that is well respected globally.

However, northern Ontario’s gold rushes have always seemed to play second-fiddle to the legendary Klondike in the Yukon, aided by famous writers like Jack London, Robert W. Service – of the Cremation of Sam McGee fame – and Canadian literary icon, Pierre Berton. At it’s peak, the Klondike gold rush only lasted for a few years – 1896-99 – and produced a miserly 12.5 million ounces of gold. “Chump change” compared to northern Ontario’s four major gold rushes and a number of smaller gold districts, most of which are still producing the precious metal today.

Considering the record setting price of gold, moving upwards almost daily, the political stability of northern Ontario and its strong world-class mining infrastructure versus lesser developed countries like Tanzania, Guatemala or Papua New Guinea, exploration in all current and former gold mining camps is booming.

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[NDP] Changing the rules [for resourse development in northern Ontario] – (Thunder Bay Chronicle-Journal Editorial – August 10, 2011)

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

ONTARIO NDP Leader Andrea Horwath is courting northern votes by proposing to protect and create northern jobs. It’s a familiar pledge. Few northerners will argue with her value-added intentions, announced in Thunder Bay Tuesday. But forcing industry’s hand at a time when industry is fond of simply moving to the cheapest jurisdiction goes against all that free trade and globalization, such as they are, strive for. It’s a tide that will be hard to turn.

Horwath says that if an NDP government is elected in October, it will ensure that Ontario’s natural resources stay in Ontario to create value-added forestry and mining jobs and give northern communities and First Nations a chance to share in more of the prosperity the North creates.

Horwath unveiled plans to fix forestry tenure rules to give communities more control over wood allocations. And she would amend the Mining Act so resources mined in Ontario cannot be exported if they can be processed in Ontario.

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Gold runs in their veins – by Joe O’Connor (National Post – August 13, 2011)

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

“By 1930, Canada became the world’s second-largest producer of gold, with
 Ontario responsible for most of that output,” Stan Sudol writes in a recent
Canadian Mining Journal article.

It is an awkward moment, and it happens all the time. Jessica Bjorkman will meet a stranger, a new face in town, and if they start talking, and if the conversation winds around to the inevitable career question – ”So, what do you do for a living?” – she will sigh, just a little. See, it is complicated.

Ms. Bjorkman is not a wildeyed old man with a grizzled beard yodelling around the great north woods on the back of a donkey. And she does not live in the Yukon. And she has not memorized all the words to Robert Service’s poem, The Cremation of Sam McGee. So when she tells someone, “I am a prospector,” that someone will invariably shoot her a curious look.

“Most everybody is surprised,” Ms. Bjorkman says. “I say we go out looking for rocks that have potential. We are the step before a mine. Basically, we are the ones out there, on the ground, looking for something promising.”

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The day the greenback divorced gold – by Martin Mittelstaedt (Globe and Mail – August 13, 2011)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous impact and influence on Canada’s political and business elite as well as the rest of the country’s print, radio and television media.

Forty years ago, Nixon cut the U.S. dollar’s link with gold. The ‘watershed event’ changed the face of global finance, but remains a controversial decision

It was mid-August of 1971 when U.S. President Richard Nixon took to the airwaves in a televised address to drop a bombshell on the international financial system: He was severing the final link of the U.S. dollar to gold.

Monday, August 15 will mark the 40th anniversary of Mr. Nixon’s historic announcement that the U.S. would no longer honour a pledge to foreign governments to redeem U.S. dollars for gold, which was then trading on the open market for what now seems like the ridiculously low price of about $40 (U.S.) a troy ounce.

His decision ushered in the modern era of floating exchange rates and paper-money currencies that today dominate the global marketplace. It also initiated an incredible bull market in gold itself.

“It was a watershed event,” says Lacy Hunt, economist at Hoisington Investment Management, an Austin-based money manager, who at the time of the announcement was a senior financial economist at the Dallas Federal Reserve Bank.

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“The Death of Mining” in 1984 – perhaps Mark Twain said it best

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Please link here for: Business Week – Death of Mining: December 17, 1984

The cover story on Business Week magazine on December 17, 1984 bore the ominous headline “The Death of Mining.”  Twenty seven years later, at the 68th Canadian Mines Ministers Conference held in Alberta, the Canadian Mineral Industry Federation (CMIF) presented evidence of a diametrically opposite point of view.

“Canada’s mining industry is a major contributor to Canadian prosperity – providing $35 billion to GDP in 2010 and based on Natural Resources Canada definitions, employing 308,000 workers in mineral extraction, processing and manufacturing,” said the CMIF submission to mines ministers.  “There are more than 3,200 companies, which provide inputs to the industry ranging from engineering services to drilling equipment.”

“The industry pays around $10 billion annually in taxes and royalties to federal, provincial and territorial governments,” it said.  “Alberta, Saskatchewan, Newfoundland and Labrador, New Brunswick, Manitoba and British Columbia all typically derive a significant portion of government revenues from the mining industry.”

Back in 1984, Business Week told us “a series of factors accounts for mining’s malaise. 

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Gold bugs get their day – by Jan Harvey Reuters (National Post – August 11, 2011)

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

Gold, and only gold, will be our salvation when the value of companies, banks, countries and even money itself melts away. Gold, not shifting currencies, is the foundation of wealth and security. Gold is back, for good.

This is the song of the “gold bugs” – the fervent fans of the precious metal who have clung to its investment value for three generations and now glow in the reflected lustre of a record price approaching $2,000 for just one ounce.

Monday will mark the 40th anniversary of the United States’ abandonment of the gold standard. But gold bugs kept the faith — even when prices stayed under $500 for nearly 25 years after their 1981 peak. Their passion derided, dismissed as hopelessly out dated doomsayers, their love for the metal seemed irrational.

The gold bug label itself goes back to master of the supernatural Edgar Allen Poe and his story of that name, a tale of golden beetle whose bite sends the hero to a chest of gold and jewels.

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Gold finally puts shine on TSX – by Peter Koven (National Post – August 11, 2011)

The National Post is Canada’s second largest national paper. Peter Koven is their mining reporter.

For the first time in months, gold equities have more momentum than their underlying commodity. While gold bullion has generated most of the attention this week as it reached uncharted levels, Canadian gold stocks registered even bigger gains, suggesting investors are starting to recog-nize the massive margins and cash flow mining companies can generate at these prices.

Among the big winners so far this week are Yamana Gold Inc. (up 15%), Barrick Gold Corp. (up 11%) and Eldorado Gold Corp. (up 14%). They all jumped sharply Wednesday as the key gold futures contract topped US$1,800 an ounce for the first time. That performance helped the Toronto Stock Exchange end the day in positive territory. The TSX’s gains came despite huge drops on U.S. stock exchanges.

Since the financial crisis in 2008, gold bullion has gone on a fantastic run while gold stocks have been a disappointment. Investors have worried about rising costs, political uncertainty and many other factors as they preferred bullion during turbulent times.

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Vale Steve Wood Speech to Sudbury Area Mining Supply and Service Sector (SAMSSA) – August 9, 2011

We cannot accept fatalities like the recent tragedy we experienced with the loss of Jordan Fram and Jason Chenier at Stobie Mine, and must do everything in our power to work together to honour their memories and those lost before them to prevent future injuries and fatalities in everything we do. – Steve Wood: Vale Vice-president Mining and Milling North Atlantic Operations

Speech to the Sudbury Area Mining Supply and Service Sector (SAMSSA)
Howard Johnson Hotel – Sudbury, Ontario, August 9, 2011

CHECK AGAINST DELIVERY

Thank you and good morning everyone. It’s a pleasure to see you here today.

As Dick said, my name is Steve Wood — and not Jon Treen — but as Jon’s boss hopefully I will do okay as his ‘stand in’! But seriously, Jon sends his regrets and apologizes that he can’t be here today to speak to you.

Before I begin, I would like to thank Dick Destefano for inviting Vale to be here this morning.

Dick is an outstanding advocate of the mining industry, and an effective ambassador of the mining supply and service sector, and we have enjoyed a very positive relationship with Dick over the years. He certainly isn’t afraid to stand up for you, his members, and at Vale we truly respect that. Thank you, Dick.

* * * * *

Today, I am here to speak to you about Vale and our future in the Sudbury Basin. We have a great journey in front of us, and as our key partners, it’s a journey that we want you to be a part of…and many of you are already well on board.

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The coming Ontario dark age – by David Robinson (Northern Ontario Business – August 2011)

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.  Dave Robinson is an economist with the Institute for Northern Ontario Research and Development at Laurentian University. drobinson@laurentian.ca 

The Dark Age begins in less than 10 years. Sometime before 2021, southern Ontario will begin rolling brownouts and plant closures. It will happen in the summer because Torontonians really need their air conditioners. It will happen because no one wants to pay full cost for power. And it will kill jobs.

By 2021, Ontario’s demand for electricity will have outrun supply. Shortages that began before 2002 were hidden when the recession cut manufacturing jobs. As the economy recovers, and the population of southern Ontario grows, a gap will open up between demand and supply. Energy conservation and repairing old nuclear plants will help, but won’t fill that gap.

Why should Northerners care? Because northern rivers will be poured into the gap. Because the price of electricity will be so high that jobs will be lost in Northern Ontario. Because even though demand for northern wood, metal water and power is rising, Northern Ontario will continue to stagnate.

Most of the hydroelectric capacity in Northern Ontario has been already been developed.

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Riches to rags tale of Bre-X exec [John Felderhof] – by Betsy Powell (Toronto Star – August 10, 2011)

The Toronto Star, has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

The geologist who made millions by selling Bre-X stock before the company became embroiled in one of the biggest mining frauds in history says he is penniless but happy growing vegetables in the Philippines.

“Rich and poor,” shrugs John Felderhof, “as long as I can put food on the table.” Felderhof, 71, is in Toronto this week for what he calls the bizarre experience of “defending my defence lawyer,” Joseph Groia.

Four years ago, with Groia as his counsel, an Ontario Court judge acquitted Felderhof, who had been Bre-X Mineral’s vice-chairman in charge of exploration, of illegal insider trading and issuing false press releases after a trial that stretched over seven years.

The Law Society of Upper Canada, which regulates lawyers in Ontario, alleges Groia, 56, committed professional misconduct by failing to conduct himself in a civil manner while acting as Felderhof’s counsel.

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Commentary About “Mining Marshall Plan for Northern Ontario” – by Fred Haavisto (Sault Ste. Marie Community Forester)

I read your latest article this evening in Northern Ontario Business (Mining Marshall Plan for Northern Ontario).  This was very well done, informative and a must read for every provincial and federal politician from Ontario.  You have made many key points that should be taken under consideration immediately, if not sooner.   Of course, the article tickled a number of thoughts in the mind of a lowly forester who has experienced the wilds of northern Ontario, especially those areas that have a peat substrate and high water levels.

Thank you for the heads-up on Quebec’s “Plan Nord”.  By your comments, it is much more meaningful than Ontario’s “Growth Plan for Northern Ontario 2011”.  However, as the authors said of the Ontario document….”…This Plan is a strategic framework that will guide decision-making and investment planning in Northern Ontario over the next 25 years”.

Your recommendations for a “Mining Marshall Plan” are to the point, imperative to the implemented, and applies equally well to the forest industry.  In actuality, Mining and Forestry should probably work hand-in-hand. 

1) Transportation infrastructure is necessary for both, but should not be restricted for the sole use of either or both of these sectors. 

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Staying the course [Vale’s Sudbury investments] – by Harold Carmichael (Sudbury Star – August 10, 2011)

The Sudbury Star, the City of Greater Sudbury’s daily newspaper. hcarmichael@thesudburystar.com

“There is no doubt we have one of the best mining supply and service sectors here today. … Having one of this level in our backyard gives us a significant advantage, especially when
circumstances require us to be nimble. … We will have a new copper strategy to respond
to increasing global demand in foreign countries. … Sudbury will play a pivotal role, including the Victor and Capre properties …” (Steve Wood – Vale Vice-president Mining and Milling North Atlantic Operations, August 9, 2011)

The turmoil in the markets in recent days and the debt crisis in the United States won’t derail Vale’s plans for its Greater Sudbury operations, a senior company official said Tuesday. “We are staying the course,” Steve Wood told members of the Sudbury Area Mining Supply & Service Association at the group’s monthly meeting Tuesday. “We have our vision to be the biggest and the best (global mining company) and these projects have built up well situationally, as well.

“We don’t see any changes.” Wood is Vale’s vice-president of mining and milling for its North Atlantic operations. A Greater Sudbury native, Wood provided a 20-minute update of the global mining company’s plans for its Greater Sudbury operations.

In a scrum with reporters following his presentation, Wood reiterated that the bad economic news won’t affect the company’s Greater Sudbury operations or planned projects.

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