Republic of Mining

Ten mining stocks to watch in Canada’s materials sector – by Noor Hussain (Globe and Mail – September 9, 2019)

September 10, 2019

https://www.theglobeandmail.com/

WHAT ARE WE LOOKING FOR?

When markets are unstable and volatility is on the rise, investors tend to investigate alternative defensive products in order to protect their wealth. The materials sector can be seen as defensive insofar as gold (its production being a key part of this sector) is negatively correlated to the market.

Last month, because of the strong rally of gold and silver, materials was one of the best performing sectors in Canada. The sector rose 5.7 per cent in August compared with the S&P/TSX Composite Index, which gained 0.2 per cent. Year to date, the sector has advanced 22.9 per cent compared with 14.8 per cent for the S&P/TSX.

Today, we will take a deeper dive into this sector and analyze some companies that have benefited from this trend.

THE SCREEN

Getting to the bottom of things: Can mining the deep sea be sustainable? – by Anna Metaxas and Verena Tunnicliffe (The Conversation – September 8, 2019)

September 10, 2019

https://theconversation.com/

It is completely dark, just above freezing cold and the pressure is crushing: this is the deep-sea floor. Food is very scarce in this huge region, yet a great diversity of animals have adapted to exploit and recycle resources and thrive within it.

As technology enabled us to penetrate deeper into the ocean in the past 50 years, we discovered extraordinary ecosystems: hydrothermal vents support lush communities of unique animals, seamounts foster coral and sponge forests and abyssal plains continue to yield biodiversity novelties.

Metal-rich ores were also discovered in these same environments — and in quantities that sparked commercial interest. These deposits are now the targets for exploitation by mining companies both within and beyond national waters.

UPDATE 1-Philippines H1 nickel ore output rises 3% despite mine shutdowns – by Enrico Dela Cruz (Reuters U.S. – September 10, 2019)

September 10, 2019

https://www.reuters.com/

MANILA, Sept 10 (Reuters) – Nickel ore output in the Philippines, one of the world’s top two producers of the material for stainless steel and batteries, rose 3% in the first half, government data showed.

Output was capped as half of the country’s mines were closed for maintenance or environmental reasons.

The Philippines sells most of its nickel ore to top buyer China. It produced 11.31 million dry metric tonnes of the material between January and June, compared with 11.01 million tonnes in the same period last year, the Mines and Geosciences Bureau (MGB) said on Tuesday.

[Kirkland Lake Gold] Canada’s TSX 60 to gain a gold miner, lose an energy player – by David Milstead (Globe and Mail – September 10, 2019)

September 10, 2019

https://www.theglobeandmail.com/

The index of Canada’s biggest stocks has welcomed a gold company and said goodbye to an energy player, but the changes that weren’t made are even more notable.

S&P Dow Jones Indices said it will add Kirkland Lake Gold Ltd. when it rebalances the S&P/TSX 60 on Sept. 23 and remove Husky Energy Inc. to do so. Kirkland Lake is up about 75 per cent this year, while Husky has declined by about one-third.

Often loosely described as a blue-chip index, the S&P/TSX 60 is not simply composed of the 60 best-performing stocks on the Toronto Stock Exchange, however, nor is it the five dozen most valuable companies. Instead, there are a handful of complex rules governing membership, and one of them, regarding sector balancing, suggested that the committee might have added Air Canada to the ranks – and delete either Bombardier Inc. or SNC-Lavalin Group Inc. to do so.

Brazil miners, upset by government crackdown, block grain transportation route (Reuters U.S. – September 9, 2019)

September 10, 2019

https://www.reuters.com/

SAO PAULO (Reuters) – Small gold miners that have been working on illegal pits in the Amazon rainforest blocked an important road for grains transportation in Brazil’s Para state on Monday, protesting a crackdown by the government, police said.

The miners, mostly habitants of Moraes Almeida, a district in the Itaituba municipality that is at the center of an environmental crisis due to widespread fires in the forests surrounding it, blocked the BR-163 federal road. The road is used by commodities traders to transport soybeans and corn from Mato Grosso farms to a port at the Tapajós river in Para.

“There was a total obstruction on the road at km 411, leading to traffic congestion in both ways,” said the federal police, answering a request for comment from Reuters.

Cobalt 27 faces investor outcry amid accusations it’s selling ‘crown jewel’ assets at a loss – by Gabriel Friedman (Financial Post – September 7, 2019)

September 7, 2019

https://business.financialpost.com/

Proposed buyout has some shareholders feeling like the company bought high and sold low as it tries to steer investors from cobalt to nickel

Toronto-based Cobalt 27 Capital Corp., which billed itself as an investment in the electric vehicle revolution, is facing outcries from some of its largest shareholders as it tries to sell its most valuable assets during a market low-point.

The company roared into the market in mid-2017 with an initial public offering, ultimately raising hundreds of millions of dollars to stockpile and acquire royalties on cobalt, an essential metal used in lithium-ion batteries. Within about a year the price of cobalt had hit a five-year peak, only to crash in the latter half of 2018 and never fully recover.

Now the company wants to steer its investors into nickel and to sell its main cobalt assets to its largest shareholder, Pala Investments. Other shareholders would receive $3.57 in cash, plus equity in Nickel 28, a new company that would hold the remaining assets including a stake in a nickel mine in Papua New Guinea.

The glitter appears to be coming off the rally in all things gold – by Tim Shufelt (Globe and Mail – September 7, 2019)

September 7, 2019

https://www.theglobeandmail.com/

After a stellar three-month stretch for gold bullion and the stocks of companies that dig it out of the ground, the glitter appears to be coming off the rally in all things gold.

An easing of global recession fears and a nascent rebound in long-term bond yields have taken back some of the gains in gold and gold equities through an otherwise ascendant summer.

As of Wednesday, gold prices were higher than US$1,550 an ounce for the first time since 2013, while the group of gold stocks within the S&P/TSX Composite Index was up by more than 50 per cent on the year. In the last two trading days of the week, however, Canadian gold stocks declined by 8.1 per cent, while spot prices declined to US$1,507.

Mining companies hope for pragmatic form of Peronism amid project freeze (Buenos Aires Times – September 7, 2019)

September 7, 2019

https://www.batimes.com.ar/

Whoever wins next month’s presidential election in Argentina will have to rely on commodity exporters to bring in much-needed foreign currency. The mining industry is hoping that will win them some concessions.

Since Alberto Fernández nailed a landslide win over President Mauricio Macri in the August PASO primary election, Argentina’s foreign currency reserves have fallen 22 percent to US$51.7 billion.

The victory has led mining companies that were considering billions of dollars in investment in Argentina to think again. They want clarity on whether Fernández and his running-mate, former president Cristina Fernández de Kirchner, will resort to the protectionist measures and populist policies of the past.

Taseko Mines barred from work in Tsilhqot’in traditional territory until Indigenous rights case is heard – by Ainslie Cruickshank (Toronto Star – September 6, 2019)

September 7, 2019

https://www.thestar.com/

VANCOUVER—The Supreme Court of British Columbia has granted an Indigenous nation a temporary respite from the threat of extensive mine exploration on its traditional lands.

Justice Sharon Matthews issued an injunction order Friday to prevent Vancouver-based Taseko Mines Limited from doing any work until the court rules whether the provincial permit for a drilling program infringes on Tsilhqot’in Indigenous rights.

“At the end of the day, this was our last hope,” said Jimmy Lulua, chief of the Xeni Gwet’in First Nations, one of the six Tsilhqot’in Nation communities.

Nuclear industry urges Trump to revive uranium mining with Cold War-era rule – by Valerie Volcovici and Timothy Gardner (Reuters U.S. – September 6, 2019)

September 7, 2019

https://www.reuters.com/

WASHINGTON (Reuters) – The U.S. nuclear energy industry has called for the Trump administration to revive domestic uranium mining and enrichment by unlocking funds through a Cold War-era program, in a letter sent to a Cabinet-level working group.

The Aug. 18 letter from the Nuclear Energy Institute, or NEI, to national security adviser John Bolton and White House economic adviser Larry Kudlow, urges the Trump administration to authorize funds through the 1950 Defense Production Act to procure domestic fuel for defense requirements and boost federal reserves of uranium for nuclear power utilities.

In the letter, a copy of which was seen by Reuters, the NEI urges unspecified “direct payments to either a U.S. utility or domestic uranium producer for sale of U.S.-origin uranium to a utility.”

Billionaire Friedland Wins Rights to Iron Ore Project in Guinea – by Thomas Biesheuvel and Ougna Camara (Bloomberg News – September 6, 2019)

September 6, 2019

https://www.bloomberg.com/

Billionaire mining investor Robert Friedland has won the rights to develop an iron ore deposit in Guinea that owners including BHP Group have left undeveloped for years.

Friedland has been in talks with BHP, Newmont Goldcorp Corp. and Orano for months to secure the right to develop the Nimba deposit on Guinea’s border with Liberia. Guinean president Alpha Conde attended a signing ceremony in the capital, Conakry, on Thursday to agree to Friedland’s High Power Exploration group buying 95% of the project.

While Guinea has some of the world’s richest iron ore deposits, including the fabled Simandou mine that Rio Tinto Group, Vale SA and billionaire Beny Steinmetz have fought over for years, it has never exported a ton.

Cameco may cut uranium output further as demand stalls – by Geert De Clercq (Reuters U.K. – September 5, 2019)

September 6, 2019

https://uk.reuters.com/

LONDON, Sept 5 (Reuters) – Canadian miner Cameco said it will hold down output until uranium prices recover and it could cut production further, although nuclear reactor life extensions in France and newbuilds in China, the UAE and Britain bring some hope.

Since the 2011 Fukushima nuclear disaster, Japan, Germany and other countries have closed dozens of reactors, which has depressed demand for nuclear fuel and forced miners to close or mothball mines as uranium prices plunged.

From a $140/pound high in 2007 and about $70 just before Fukushima, uranium fell to a low of $18/lb in 2016 and has since recovered slightly to $25 today as miners cut output.

Surat’s diamond industry loses glitter as slowdown deepens – by Mahesh Langa (The Hindu – September 6, 2019)

September 6, 2019

https://www.thehindu.com/

More than 15,000 people have been laid off in the past few weeks in the labour intensive sector

As the economic slowdown is deepening across sectors, India’s diamond hub in Surat is facing its worst crisis since 2008. The industry has seen more than 15,000 people being laid off in the past few weeks as the labour intensive sector is losing sheen owing to multiple factors, including the escalating trade war between China and the U.S., liquidity crisis at home and issues related to the Goods and Services Tax.

Since December 2018, almost one lakh people, mostly workers working in the sector that includes factories engaged in cutting and polishing rough diamonds, have lost their jobs, making it the worst crisis since the global slowdown in 2008.

It may be noted that India is the world’s largest cutting and polishing centre of rough diamonds, processing as many as 14 out of every 15 rough diamonds in the world. And more than 95 % of diamonds are cut and polished in several thousands factories in Surat and other towns of Gujarat.

Cameroon Villagers Say Chinese Miners Are Ruining Local Environment – by Moki Edwin Kindzeka (Voice of America – September 5, 2019)

September 6, 2019

https://www.voanews.com/

MEIGANGA, CAMEROON – Villagers near Meiganga, a town in northern Cameroon, are protesting against Chinese gold miners for allegedly ruining their land. The villagers say they are poorer than before the Chinese arrived, with their farms and forests now destroyed.

Area cattle ranchers and farmers say that if nothing is done to save them from Chinese miners, famine may strike their locality soon.

Their spokesman, rancher Mamoudu Poro, 54, says the miners destroy farms and do not bother to cover holes and trenches they dig on roads and ranches before leaving. He says they want the Chinese to build the roads they destroyed and fill the trenches they dug, give them electricity and at least a school and a market before leaving.

[Philippine Mining] Nickel output growth seen ‘subdued’ (Business World – September 5, 2019)

September 5, 2019

Business World

PHILIPPINE production of nickel is expected to continue “modest growth” in the next few years as a negative policy environment and falling ore grade offsets the effect of mines restarting after a 2017 crackdown on environment law violations, Fitch Solutions Macro Research said in a Sept. 3 industry trend analysis e-mailed to journalists on Wednesday.

“We expect the Philippines to see modest growth in nickel mine production in 2019 due to restarting mines and gains from current operations,” Fitch Solutions said in its note, titled: “Philippine nickel mining outlook showing upside potential.”

At the same time, it clarified: “We maintain our subdued nickel mining growth outlook for the Philippines over the medium to long term, underpinned by the country’s stringent environmental regulations and policy uncertainty that will undermine investment into the Philippine’s thin nickel project pipeline.”