Republic of Mining

Why a Barrick takeover of Newmont would do little for gold investors – by Ian McGugan (Globe and Mail – February 27, 2019)

February 27, 2019

https://www.theglobeandmail.com/

Many people have described Barrick Gold Corp.’s hostile takeover offer for Newmont Mining Corp. as audacious. A better word might be “unnecessary.”

Unnecessary, that is, from an investor’s perspective. A successful bid would no doubt do wonders for the compensation of Barrick executives, who would wind up running the biggest gold company in the world by far.

However, a tie-up between Barrick and Newmont would do relatively little for gold lovers, who can already target all the precious-metals exposure they want through other channels.

NAN lauds move to repeal Far North Act (Timmins Daily Press – February 27, 2019)

February 27, 2019

https://www.timminspress.com/

Nishnawbe Aski Nation (NAN) Grand Chief Alvin Fiddler is applauding the Government of Ontario’s plan to repeal the Far North Act.

“We strongly oppose the Far North Act and are encouraged that Ontario is taking a second look at this controversial legislation,” Fiddler said in a statement. “The Act was enacted without meaningful consultation to legislate our territory under the control of the province and threatens the inherent, treaty and Aboriginal rights of our people.”

“Ontario does not have free reign to do as it pleases in the Far North, and we will defend our right to control development so that the wealth from our lands benefits our people and the growth of our Nation. We welcome the opportunity to engage with the province, but any process must begin with government-to-government dialogue in our traditional territories. We are prepared to facilitate a consultative process for the development of the lands and resources in NAN territory.

OPINION: Canada’s natural resources are an advantage in a digital economy – by Aaron Henry (Globe and Mail – February 25, 2019)

February 27, 2019

https://www.theglobeandmail.com/

Aaron Henry, director of resource and environmental policy, Canadian Chamber of Commerce.

There is no shortage of hype and enthusiasm for artificial intelligence, internet of things applications and, of course, blockchain technologies; and nor should there be. These technologies bear significant social and economic promise.

While everyone clamours for insight into how these technologies will affect the future of work, another massive effect these technologies may have in store for Canada’s economy remains overlooked: how Canada’s natural resources will play a critical part in supporting that transformation.

The evolution of automation, remote working, digital currencies and services will pose significant challenges to Canada’s tax base and therefore the country’s ability to offer essential services. The ability of companies to move the revenues from their digital services from high-tax to low-tax jurisdictions has started to undermine government capacity to collect tax revenue.

Introducing our new publication: ‘The Drift’ – by Staff (Northern Ontario Business – February 26, 2019)

February 26, 2019

(Cover photo courtesy of www.miningphotog.com)

https://www.northernontariobusiness.com/

Let us introduce you to Northern Ontario Business’ newest publication, The Drift. This 60-page, glossy magazine highlights the innovative work of the Northern Ontario mining service and supply sector.

In its pages we tell the stories behind the leading-edge companies, state-of-the-art products, and passionate, hardworking people that contribute to what is a $6-billion industry in Ontario.

Readers can find this publication at the Northern Ontario Mining Showcase during the 2019 convention of the Prospectors and Developers Association of Canada (PDAC), being held March 3-6, 2019, in Toronto.

Canada threatens not to ratify USMCA until U.S. ends steel, aluminum tariffs – by Adrian Morrow (Globe and Mail – February 26, 2019)

February 26, 2019

https://www.theglobeandmail.com/

Canada is threatening to not ratify the renegotiated North American free-trade pact if U.S. President Donald Trump doesn’t first remove steel and aluminum tariffs, in a bid to restart serious talks over the punitive duties.

Canadian officials have been privately delivering this warning to their U.S. counterparts and members of Congress for several weeks, said government sources with knowledge of the discussions, before Transport Minister Marc Garneau went public with a version of the message on Sunday.

The move is designed to use Canada’s last opportunity to leverage the new United States-Mexico-Canada Agreement (USMCA) – one of Mr. Trump’s priority policies – to put pressure on the White House into ending its trade war with Ottawa.

OPINION: Barrick’s promises of golden synergies won’t be enough to snag Newmont – by Eric Reguly (Globe and Mail – February 26, 2019)

February 26, 2019

https://www.theglobeandmail.com/

Barrick Gold just traipsed into a potentially nasty battle short of ammunition.

On Monday morning, John Thornton, Barrick’s executive chairman, and CEO Mark Bristow unveiled a nil-premium, all-share offer for Colorado’s Newmont Mining. Hostile offers generally come with juicy premiums or else they don’t work, and this bid is already not working.

Were it to succeed, the audacious bid, which comes shortly after both companies announced transformative mergers of their own, would unite the two biggest names in gold mining, creating a colossus with gold operations on four continents, annual revenue of US$15.6-billion and trading liquidity that, to use Barrick’s politically incorrect term, would “dwarf” the competition.

Why this portfolio manager sees the return of gold’s glory days — and it’s not just megamerger mania – by Victor Ferreira (Financial Post – February 26, 2019)

February 26, 2019

https://business.financialpost.com/

David MacNicol has always described himself as a contrarian, so while investors have been exiting gold en masse for years, the natural reaction for him was to stay put.

Now the president and portfolio manager of Toronto-based investment firm MacNicol & Associates believes things are turning back in the yellow metal’s favour.

“We think we’re at the end of a cycle and at a turning point for gold and it has everything to do with interest rates and debt levels,” said MacNicol, who thinks the precious metal’s role as a safe haven remains intact.

Barrick Gold, Newmont Mining CEOs argue over size as analysts question benefits of megamerger – by Gabriel Friedman (Financial Post – February 26, 2019)

February 26, 2019

https://business.financialpost.com/

Toronto-based Barrick Gold Corp. executives used to claim that unlike other companies in the precious metals industry, they would never make acquisitions to grow their footprint and size.

But on Monday after proposing a nearly $18-billion takeover of Colorado-based Newmont Mining Corp. — a deal that if consummated would create the world’s largest gold producer, with an estimated $42-billion market cap, by a distance — Barrick chief executive Mark Bristow acknowledged that being large is critical.

“The point is we really want to attract generalists back into the industry,” Bristow said on the conference call with investors. “We want to be relevant and we think that $40 billion is relevant.”

Mining Magnate Mick Davis Is Back – by Thomas Biesheuvel (Bloomberg News – February 25, 2019)

February 25, 2019

https://www.bloomberg.com/

Almost every major player in mining has tried to build an iron ore mine in Guinea. Now it’s the turn of Mick Davis.

Davis, nicknamed Mick the Miner, had been one of mining’s most successful operators and deal makers, but in recent years has struggled to reestablish himself in the industry.

Now, a remarkable make-up deal between billionaire mining tycoon Beny Steinmetz and the Guinean government has given him the chance to develop one of Africa’s richest iron ore deposits. Should Guinea and Steinmetz settle their disputes, Davis, through his new Niron Metals vehicle, will be able to develop the Zogota iron ore mine.

Brazilian iron ore supply disruptions to be expected – Report – by Valentina Ruiz Leotaud (Mining.com – February 24, 2019)

February 25, 2019

http://www.mining.com/

Excluding Vale (NYSE:VALE), close to 8 million tonnes of seaborne iron ore supply from Brazil is at risk in 2019, a report by Wood Mackenzie states.

According to the market analyst, such a supply disruption would be the result of the new regulation published by Brazil’s National Mining Agency or ANM, which establishes the ban of all dams in the country built with the upstream method.

Based on the new law, companies holding such structures will have six months to present a technical decommissioning project and until August 15, 2021, and August 15, 2023, to fully conclude deactivation processes of inactive and active dams, respectively.

WoodMac reached the conclusion of the supply hitch after analyzing all 226 iron ore tailings dams that the South American country has.

Barrick CEO defends $18 billion hostile Newmont bid as logical tie-up – by Ernest Scheyder (Reuters U.S. – February 25, 2019)

February 25, 2019

https://www.reuters.com/

HOLLYWOOD, Fla. (Reuters) – Barrick Gold Corp’s chief executive defended the world’s largest gold producer’s hostile $18 billion bid for Newmont Mining Corp, saying on Monday the deal is “logical” for an industry battling high costs and depleting resources.

Barrick, which recently completed a $6.1 billion acquisition of Africa-focused Randgold Resources, launched its all-stock bid on Monday, encouraging the U.S. rival to ditch a previously announced $10 billion takeover of Canada’s Goldcorp Inc.

“This gold industry needs to become more relevant to investors,” CEO Mark Bristow said in an interview on the sidelines of the BMO Global Metals & Mining Conference in Hollywood, Florida.

Opinion: Brazil’s Brumadinho is Vale’s Worst Nightmare – by Michael Royster (Rio Times – February 25, 2019)

February 25, 2019

Rio Times

The former poster child for privatization now faces receivership or even bankruptcy, as neither government officials nor investors in the market will forgive it for those 300 lost lives.

RIO DE JANEIRO, BRAZIL – Brumadinho is a municipality south of Belo Horizonte, the capital of Minas Gerais, where some 12 million cubic meters of iron ore tailings were impounded — until late last month when the “Feijão” dam broke, with catastrophic consequences — estimates are that some 300 lives have been lost.

Vale S.A., once known as Companhia Vale do Rio Doce (CVRD) but now universally called simply “Vale”, is a mining behemoth, the world’s largest producer of iron ore. Much of its production of iron ore is in Minas Gerais, where it has dozens of mines.

Mariana is a municipality near historic Ouro Preto in Minas Gerais, where in November 2015 some 62 million cubic meters of impounded iron ore tailings were released when the dam broke. This disaster caused the loss of nineteen lives, along with immense ecological damage to the Rio Doce, Vale’s namesake river. Vale was a fifty percent owner of Samarco, the company whose tailings dam failed.

Mining Billionaire Ends Bitter Guinea Dispute After Months of Secret Negotiations – by Franz Wild and Thomas Biesheuvel (Bloomberg News – February 25, 2019)

February 25, 2019

https://www.bloomberg.com/

Israeli mining tycoon Beny Steinmetz is making a dramatic return to Guinea after the billionaire ended a bitter dispute with the West African country that brought his business empire to its knees.

The settlement, brokered by former French President Nicolas Sarkozy, ends a seven-year-old dispute centered around one of the world’s richest mineral deposits that included a colorful list of characters from billionaire George Soros to former U.K. leader Tony Blair and mining heavyweights Rio Tinto Group and Vale SA.

After months of secret negotiations, Steinmetz’s BSG Resources Ltd. agreed with Guinean President Alpha Conde to withdraw allegations of corruption leveled against each other over years and to drop a two-year-old arbitration case over one of the world’s most-fabled mineral deposits — the Simandou iron-ore project.

Sharing the natural wealth: Through industry partnerships, Wabun Tribal Council has the recipe for producing resilient communities – by Ian Ross (Northern Ontario Business – February 25, 2019)

February 25, 2019

https://www.northernontariobusiness.com/

Wabun Tribal Council executive director Jason Batise recalls a conversation with a provincial negotiator on a resource revenue sharing model that the former Wynne government planned to carry into the 2018 provincial election.

During a break, the senior bureaucrat took him aside and confided that these talks represented a “crowning achievement” in his professional career. “I’ve been in the public service for 25 years and this is the best thing I’ve ever done,” recalled Batise.

When it goes into effect this fall, the series of agreements between the province and 32 First Nations, including six from Wabun, enables them to receive 40 per cent of the annual mining tax and royalties from existing mines in areas covered by the agreements, 45 per cent from future mines, and 45 per cent of forestry stumpage.

Barrick goes hostile with $18-billion all-stock bid for U.S. rival Newmont – by Niall McGee (Globe and Mail – February 25, 2019)

February 25, 2019

https://www.theglobeandmail.com/

Barrick Gold Corp. is offering to buy Newmont Mining Corp. in an unsolicited, all-share, no-premium transaction, claiming it is a “once in a lifetime” opportunity to create an ‘unrivalled leader” in the global gold sector.

In a statement before markets opened on Monday, Barrick said it is offering 2.5694 shares for each Newmont share in a deal worth approximately US$17.8-billion.

Toronto-based Barrick says its proposal is far superior to Newmont’s US$10-billion offer to buy Goldcorp Inc., which was announced last month but hasn’t yet closed.