Republic of Mining

OPINION: Shining a little light on the Mary River process – by Ken Armstrong (Nunatsiaq News – November 26, 2019)

November 27, 2019

Ken Armstrong is the President of the NWT-Nunavut Chamber of Mines.

The current impasse that phase two of the Mary River project finds itself in is of great interest and also concern to investors and industry watchers. We’d like to shine some light on three aspects of this process.

First, there has been recent criticism of Baffinland Iron Mines Corp. for positioning several buildings and construction materials, needed for the phase two railway expansion, before approvals for the railway are in place.

Operating in the North is challenging, with remote projects relying on limited transportation infrastructure and seasonal shipping windows. For northern resource projects, it is not uncommon to pre-position equipment at or near a project site in advance of receiving required permits.

CN Rail strike ends with tentative deal with union, but fallout continues for farmers, miners – by Emily Jackson and Naomi Powell (Financial Post – November 26, 2019)

November 27, 2019

https://business.financialpost.com/

Canadian National Railway and Teamsters Canada reached a tentative agreement to renew the collective agreement for 3,200 conductors and yard crews, ending a week-long strike that choked the country’s rail capacity at a critical shipping time for farmers.

Employees can return to work as early as Tuesday at 2 p.m., with normal operations resuming Wednesday at 6 a.m., according to statements from CN and the union. The parties have agreed to no further job action during the ratification process, which is expected to take eight weeks.

Details of the agreement will not be revealed until members vote on the deal by secret ballot, but the union previously said the dispute was over long hours and fatigue that led to what it characterized as dangerous working conditions.

Ecuador to tighten rules for mining waste dams to avoid repeat of Brazil disaster – by Alexandra Valencia (Reuters U.S. – November 26, 2019)

November 27, 2019

https://www.reuters.com/

QUITO (Reuters) – Ecuador’s government plans to tighten rules regulating the construction and operation of mining waste dams to avoid disasters like one in Brazil in January when a dam owned by Vale SA collapsed, killing hundreds.

Vice Minister of Mining Fernando Benalcazar told Reuters the new rules will take effect in December and will prohibit the building of so-called tailings dams close to populated areas and ban certain designs that are considered less stable.

Public trust in the mining industry has plunged since the disaster in Brazil, spurring calls to bolster safety at tailings dams, which are used to store the muddy detritus of the mining process and can be dozens of meters high.

The World’s Biggest Battery Recycler Is Helping Fuel The Future of Cars (Bloomberg News – November 26, 2019)

November 26, 2019

https://www.bloombergquint.com/

(Bloomberg) — The former university professor leading one of the firms most crucial to the future of transport has a warning for anyone eyeing his patch.

“I want to tell everyone who wants to enter this market: don’t do it, you are wasting your money,” said Xu Kaihua, chairman of Chinese battery metals maker GEM Co. “Only the top five will survive.”

The firm Xu founded in Shenzhen in 2001 has adopted an expansive business model that’s made it central to supply chains stretching from the cobalt and nickel mines of Africa and Southeast Asia to the motors of Volkswagen and BMW cars. GEM’s diverse footprint includes a plant in Indonesia that will allow it to avoid that nation’s export ban on nickel, a key raw material. And, the company is already the world’s biggest recycler of metals from used batteries.

Chile urges copper mining companies to stay calm amid unrest – by Fabian Cambero (Reuters U.S. – November 25, 2019)

November 26, 2019

https://www.reuters.com/

SANTIAGO (Reuters) – Chile, the world’s top copper producer, reassured jittery mining companies on Monday, saying it would do everything possible to provide a business-friendly environment even as a month of riots across the country have left more than 20 dead and billions in damages.

Chile’s copper mines have mostly maintained production and kept operations running normally in the face of the unrest, with only scattered incidents reported.

But top miners, including Poland’s KGHM Polska Miedz SA, have recently expressed concern about longer-term prospects as the country assesses rewriting its constitution and overhauling tax laws to quell protests. Mining Minister Baldo Prokurica acknowledged their concerns.

Government of Nunavut looks to mines for housing help – by Derek Neary (Nunavut News – November 24, 2019)

November 26, 2019

https://nunavutnews.com/

Should mining companies be constructing residences for their employees living in the North? Nunavut’s housing minister is turning to industry for assistance.

“We have no choice but to work in partnership with industry to resolve our housing challenges,” Patterk Netser said in the legislative assembly in February after Rankin Inlet North-Chesterfield Inlet MLA Cathy Towtongie pointed out that the Government of Nunavut’s 2017 memorandum of understanding with Agnico Eagle makes reference to housing as one of 10 priority areas for collaboration.

Netser told NWT and Nunavut Mining that a team from the Nunavut Housing Corporation met with representatives from Agnico Eagle and Baffinland Iron Mines to discuss Nunavut’s housing crisis earlier this year.

OPINION: Does urban Canada hate us? – by Charles Cirtwill (Northern Ontario Business – November 26, 2019)

November 26, 2019

https://www.northernontariobusiness.com/

Reading national headlines, and, yes, social media, one can find very little sincere interest in understanding why rural Canada is gravely concerned.

The urban-rural divide is deeper than ever in Canada. My question is simple: why is this? Do “they” (urban dwellers) hate “us” (rural and small-town Canadians)?

I think the question needs to be posed in this way due to the venom that is being directed at rural communities, especially those involved in natural resource extraction. Reading national headlines, and social media, one can find very little sincere interest in understanding why rural Canada is gravely concerned. This has been the case for some time and it is getting worse, not better.

Albertans are depicted as knuckle-dragging rednecks tied to a dying industry and determined to sacrifice the health of the planet on the altar of profit, and bigger cowboy hats. The people of Northern Ontario are described as having their hands perpetually out while scarring the earth and clearcutting the forests.

Australians make a $475-million splash in Red Lake – Staff (Northern Ontario Business – November 26, 2019)

November 26, 2019

https://www.northernontariobusiness.com/

Evolution Mining enters northwest gold camp with plans to boost production, lower operating costs, spend like mad on exploration

Evolution Mining, a leading Australian gold producer, is making a big-splash entry into Canada by acquiring the Red Lake Gold Complex from Newmont Goldcorp in a cash deal worth US$475 million. The Sydney and Perth-headquartered gold miner made the announcement on Nov. 26, Australian time.

The news release included details of a three-year “turnaround” plan to “reinvigorate” the northwestern Ontario gold camp by reducing operating costs, increasing production, and extending mine life.

According to the terms of the transaction, Evolution will pay Newmont Goldcorp US$375 million at close, plus an additional US$100 million contingent on a new resource discovery.

Vedanta warns it may have to process ore outside South Africa – by Barbara Lewis and Zandi Shabalala (Reuters U.S. – November 25, 2019)

November 26, 2019

https://www.reuters.com/

LONDON (Reuters) – Vedanta, one of South Africa’s biggest international investors, will process its zinc ore elsewhere unless the country can fix its power problems, the CEO of Vedanta unit Vedanta Zinc International said.

South Africa has suffered rolling blackouts and the debts of state power company Eskom have sapped the country’s economy. The utility’s problems also risk scuppering South Africa’s goal of encouraging processing from mining operations to maximize revenues and jobs.

Deshnee Naidoo, the CEO of Vedanta Zinc International (VZI), which has operations in South Africa and Namibia, said she was concerned a solution might not be possible.

Detour Gold premium vanishes as investors dump Kirkland Lake shares amid takeover – by Niall McGee (Globe and Mail – November 25, 2019)

November 26, 2019

https://www.theglobeandmail.com/

Investors punished Kirkland Lake Gold Ltd. after the underground mining company said it will acquire struggling open pit specialist Detour Gold Corp. in an all-stock deal valued at about $4.9-billion. Toronto-based Kirkland Lake is paying 0.4343 Kirkland shares for each Detour Gold share, a 24-per-cent premium to Friday’s closing price.

But that premium all but vanished in trading Monday on the Toronto Stock Exchange. Kirkland Lake closed down 17.3 per cent on the Toronto Stock Exchange to $52.38 apiece. Detour closed up 1.8 per cent to $22.61 apiece.

Kirkland Lake has been the gold industry’s best-performing senior gold miner over the past three years, thanks in part to the spectacular performance of its high-grade Fosterville mine in Australia.

Eric Sprott explains what investors are getting wrong about Kirkland’s all-stock Detour Gold deal – by Gabriel Friedman (Financial Post – November 25, 2019)

November 25, 2019

https://business.financialpost.com/

Toronto-based Kirkland Lake Gold Ltd. on Monday announced a multibillion dollar acquisition of Detour Gold Corp., a deal that would elevate it into a major gold miner and could attract new institutional investors. But investors weren’t impressed, with the stock declining 16 per cent by mid-afternoon to $40 on the Toronto Stock Exchange. Detour rose 3.6 per cent to $23.

The combination marries two near opposites: Kirkland Lake operates two high grade underground mines at some of the lowest cash costs in the sector, whereas Detour operates a single, low grade bulk tonnage open pit mine at comparatively higher costs.

The acquisition would boost Kirkland’s annual gold production by about one-third to more than 1.5 million announces per year, but its costs are also expected to rise.

Gold ‘symbolizes strength’: Poland repatriates 100 tons from London – by Anna Golubova (Kitco News – November 25, 2019

November 25, 2019

https://www.kitco.com/

(Kitco News) After boosting its gold reserves for the past two years, Poland is bringing its gold back home.

In its latest move, Poland repatriated 100 tons of gold from the Bank of England’s storage in London to show the strength of the country’s economy, said the National Bank of Poland (NBP) on Monday. “The gold symbolizes the strength of the country,” Poland’s central bank Governor Adam Glapinski told reporters.

Poland’s precious metals will now be stored in the central bank’s treasury, NBP noted. Also, the trend of bringing the precious metal back home will continue if the “reserve situation is favorable,” with at least half of Poland’s gold reserves to be stored at home, Glapinski added.

NEWS RELEASE: Newmont Goldcorp Successfully Reaches Agreement to Sell Red Lake — $375 Million in Cash Plus Up To $100 Million in Contingent Payments (November 25, 2019)

November 25, 2019

Sale further optimizes world-class portfolio while improving financial flexibility

DENVER — Newmont Goldcorp Corporation (NYSE: NEM, TSX: NGT) (Newmont or the Company) has continued to streamline its asset base by entering into a binding agreement to sell the Red Lake complex in Ontario, Canada to Evolution Mining Limited (Evolution). Upon closing of the transaction, expected in the first quarter of 2020, Newmont will receive $375 million in cash and contingent payments of up to an additional $100 million tied to new resource discoveries.

“This transaction both strengthens our balance sheet and provides ongoing exposure to new discoveries at Red Lake,” said Tom Palmer, President and Chief Executive Officer. “Evolution is a highly respected and responsible gold producer who is committed to the success of Red Lake and who we believe will prove a great partner for surrounding communities and stakeholders.”

Under terms of the $100 million contingent payment, Evolution will pay Newmont $20 million for each one million ounces of new gold resources added to the existing Red Lake resource base over a fifteen year period. The contingent payment is applicable to the first five million ounces of new resources.

Will Bougainville Reopen the Panguna Mine? – by Joshua Mcdonald (The Diplomat – November 22, 2019)

November 25, 2019

https://thediplomat.com/

With an independence referendum on the horizon, reopening the Panguna mine offers both attractive opportunities and terrible consequences.

The Panguna mine on the Pacific island of Bougainville is one of the largest copper and gold deposits in the world. The mine was also at the center of a decade-long civil war fought between the Bougainville Revolutionary Army and the Papua New Guinea Defense Force in the 1990s. The conflict cost as many as 15,000 lives and displaced 40,000 of the island’s 200,000 inhabitants.

Before the war, the Panguna mine generated more than $1 billion in national tax revenue and accounted for about 45 percent of Papua New Guinea’s total exports, 17 percent of its internal revenue, and 12 percent of its gross domestic product. It essentially paved the way for the nation’s transition to independence from Australia.

But Panguna landowners and local employees — angered by the environmental destruction from the operation, poor wages, and unfair distribution of revenue (less than 1 percent of profits were reinvested in Bougainville) — eventually took up arms.