Republic of Mining

Barrick Gold Makes Hostile $17.8 Billion Bid for Newmont Mining – by Danielle Bochove and Ed Hammond (Bloomberg News – February 25, 2019)

February 25, 2019

https://www.bloomberg.com/

Barrick Gold Corp. is going hostile in its bid to acquire Newmont Mining Corp. and create the world’s largest gold producer, offering $17.8 billion for the company in an all-share deal. Shares of both companies tumbled.

The proposed purchase, which is a discount to Newmont’s closing price on Friday, raises the potential for a three-way fight between some of the world’s largest gold miners. Newmont said its board would review the deal but made clear its previously announced plan to take over Goldcorp Inc. offers better benefits.

“Newmont has previously determined that Barrick’s risk and return profile is inferior on many fronts, including factoring Barrick’s comparatively ineffective operating model, poor track record on delivering shareholder returns and unfavorable jurisdictional risk,” the Colorado-based company said in a statement Monday.

OPINION: The flawed Bill C-69 will worsen, rather than solve, the crisis in Canada’s resources sector – by Grant Bishop (Globe and Mail – February 25, 2019)

February 25, 2019

https://www.theglobeandmail.com/

Grant Bishop is an associate director, research, at the C.D. Howe Institute.

My flight back west was delayed at Toronto’s Pearson Airport, and I got talking to a Calgary banker, who was also homeward bound after a circuit around Bay Street. “Capital is thin right now,” she said. “Upstream investment for Canadian oil and gas is just a no-go: It’s not a matter of risk premium. No one knows how to price the politics.”

Investment in Canada’s resource sector fell dramatically in the past four years and the outlook for new projects remains depressed. Ottawa has proposed an overhaul under Bill C-69 of the federal environmental assessment for major capital projects, and our Senate is now scrutinizing the legislation.

In a report published on Thursday by the C.D. Howe Institute, Alberta’s former deputy minister of energy Grant Sprague and I aimed to add data and detail to this policy discussion. We believe that, in its present form, Bill C-69 risks amplifying political risk and further impairing confidence in Canada’s resource sectors.

Confidence abounds over Ring of Fire development – by Karen McKinley (Northern Ontario Business – February 22, 2019)

February 23, 2019

https://www.northernontariobusiness.com/

NORONT CEO tells Sudbury audience ore could be mined from Eagle’s Nest by 2024

If all goes well, the first load of ore concentrate could be coming out of the Ring of Fire by 2024. But before that, a lot of variables need to be addressed. Most critically, government commitment to funding and permitting, as well as smelter selection and road construction.

Even then, Alan Coutts said Noront Resources has contingency plans for several scenarios. Even taking ore processing out of province, if need be.

He gave an audience gathered for the Sudbury chapter of the Canadian Institute of Mining’s annual Winterlude event an update on where the corporation is at in their plan on Feb. 21.

Barrick confirms weighing bid for Newmont Mining in no-premium deal – by Niall McGee (Globe and Mail – February 23, 2019)

February 23, 2019

https://www.theglobeandmail.com/

A hostile bid for Newmont Mining Corp. may force its shareholders into a tough decision: proceed with plans to acquire and turn around an industry laggard, or be swallowed by a long-standing rival.

Barrick Gold Corp. confirmed Friday that it has examined an all-stock takeover offer to acquire Colorado-based Newmont. Toronto-based Barrick said the bid it was contemplating would not contain a takeover premium, but the news sent Newmont shares 3 per cent higher, indicating some investors believe a formal offer will come.

The Globe and Mail reported Thursday that Barrick is mulling a US$19-billion takeover of Newmont that would involve the company flipping some Newmont assets to another company, possibly Australia’s Newcrest Mining. Bloomberg also reported Thursday night that Barrick had studied a bid.

OPINION: Barrick may have to pay fat premium for Newmont – by Eric Reguly (Globe and Mail – February 23, 2019)

February 23, 2019

https://www.theglobeandmail.com/

The marriage of Toronto’s Barrick Gold and Denver’s Newmont Mining, the two big beasts of the gold world, should have happened a long time ago. The theoretical deal made perfect sense because combining their properties in Nevada could save fortunes, all the better to reward shareholders.

And since the top mining companies tend to be run by egomaniacs obsessed with size, the union would come with bragging rights. Barrick-Newmont would bury the competition.

Mark Bristow, the new chief executive of Barrick, has revived the idea of a blockbuster Barrick-Newmont merger. If there is any executive in the mining industry who could pull off such a stunt, it is him. He has the chutzpah and his track record of superb value creation at his old haunt – Randgold Resources, which Barrick bought last year – might ensure the support of investors.

‘Crisis of our own making’: Regulatory logjam has cost $100B in cancelled resource projects – by Geoffrey Morgan (Financial Post – February 22, 2019)

February 23, 2019

https://business.financialpost.com/

More to be expected without major amendments to Bill C-69: C.D. Howe

CALGARY – A new report shows $100 billion in planned spending on resource projects in Canada has evaporated, and a further drop should be expected without substantial amendments to the Liberal government’s planned regulatory overhaul in Bill C-69.

As Senate hearings into the controversial bill continued Thursday, the C.D. Howe Institute released a report detailing how recent declines in planned energy, mining and forestry investment in Canada totalling $100 billion is equivalent to erasing 4.5 per cent from Canada’s gross domestic product.

TransCanada Corp.’s $15-billion Energy East pipeline, CNOOC Ltd.’s Aurora LNG and Petronas Bhd’s $36-billion Pacific NorthWest LNG project are among the major resource projects that have been cancelled in recent years after long and uncertain regulatory processes, contributing to the $100-billion figure.

Bill Gates, defying the Climate Barons, tells the ugly truth about renewables – by Peter Foster (Financial Post – February 22, 2019)

February 23, 2019

https://business.financialpost.com/

Forcing the adoption of expensive and unreliable energy destroys jobs (see Alberta) and exacerbates poverty in poor countries

Market advocates have always claimed that policy advice from business should be treated with suspicion. The road to economic and political hell is paved with corporate welfare and national champions (SNC-Lavalin anyone?).

Communists and the “progressive” left were much more harsh, claiming that since big business sought only monopoly and plutocracy, the state at least required “countervailing” power, if not absolute power.

Since command of economic resources was deemed synonymous with political power, some of the greatest businessmen and philanthropists all time — such as John D. Rockefeller, Andrew Carnegie and Cornelius Vanderbilt — were reflexively dubbed “Robber Barons.”

Barrick-Newmont ‘makes no sense’: Pierre Lassonde blasts deal chatter – by Noah Zivitz (BNN Bloomberg News – February 22, 2019)

February 23, 2019

https://www.bnnbloomberg.ca/

One of the most prominent names in the mining industry is blasting the mere possibility of Barrick Gold Corp., calling its potential hostile takeover bid for Newmont Mining Corp. “stupid.”

“Someone is having fun with the press,” said Pierre Lassonde, chairman of Franco-Nevada Corp. (), in an emailed statement to BNN Bloomberg. “A hostile bid in this environment is stupid. [Barrick’s] stock would get crushed.”

Barrick () confirmed in a short press release Friday morning that it has “reviewed the opportunity” to merge with Newmont () in what the company said would be an all-stock, no premium offer. Barrick added it hasn’t decided how it will proceed.

ROB MAGAZINE: People are dying because of Canadian mines. It’s time for the killing to stop – by Duncan Hood (Globe and Mail – February 22, 2019)

February 23, 2019

https://www.theglobeandmail.com/

Duncan Hood is the editor of Report on Business magazine.

Most of us don’t associate Canadian businesses with assault and murder. But between 2000 and 2015, 44 people died as a result of violence surrounding Canadian-owned mines in Latin America. The stories behind those killings, some of which are documented in a 2016 study by Shin Imai, a professor at York University’s Osgoode Hall Law School, are harrowing.

According to his report, mine protesters in Guatemala have reportedly been beaten, arrested, kidnapped and shot. Women living in communities surrounding the mines have been raped. In 2009, a political activist who opposed a Canadian mine in El Salvador was found dead in a well, his fingernails removed.

These atrocities rarely make headlines in Canada. The victims are poor and live in faraway developing countries. The attacks are rooted in conflicts that existed long before the mines arrived on the scene, and the links to Canada can be circuitous.

Canadian mines have wreaked havoc in developing countries for decades. Finally, there’s hope for a solution – by Paul Christopher Webster (ReportOnBusiness Magazine/Globe and Mail – February 22, 2019)

February 23, 2019

https://www.theglobeandmail.com/

In Guatemala, Indigenous communities have been collateral damage in the violence surrounding Canadian-owned resource projects. Now, they’re bringing the fight for justice here

Walking around in the village of San Rafael Las Flores—quiet, poor and picturesque—there’s little sign that, not long ago, this tranquil spot near Guatemala’s Indigenous heartland hummed with one of the biggest mining booms in the Americas. The nearby Escobal mine, built by Vancouver-based Tahoe Resources, sits atop the world’s third-biggest silver deposit, estimated to be worth $5 billion, and three times that at peak silver prices.

In 2016, Escobal, which is nestled in a paradisaically verdant valley, produced about $300 million worth of silver and employed more than 1,000 people. According to mine officials, it supported a further 6,000 jobs in an impoverished hinterland otherwise dependent on smallscale coffee farming.

But trouble was brewing. In an area known for rebel sympathies during the decades-long civil war that ravaged Guatemala until 1996, sensitivities to interlopers have always run high.

Barrick eyes hostile bid as Newmont set to become No. 1 gold producer – by Niall McGee and Rachelle Younglai (Globe and Mail – February 21, 2019)

February 21, 2019

https://www.theglobeandmail.com/

Barrick Gold Corp. is mulling a takeover bid for Newmont Mining Corp., a transaction that would represent one of the largest mining deals ever and solidify the Toronto-based company’s position as the world’s largest gold producer.

Barrick is actively working on a plan for a two-step deal that would see it take over Colorado-based Newmont for about US$19-billion in stock, then flip some of Newmont’s assets to Australia’s Newcrest Mining, according to industry sources familiar with the situation.

The sources, who were granted anonymity by The Globe because they were not authorized by their employers to speak publicly, cautioned that there are still a number of hurdles. One of those obstacles is winning support from shareholders of Newmont. The company is attempting to close its own US$10-billion acquisition of Vancouver miner Goldcorp Inc., which was only announced last month.

Barrick outlines agreement with Tanzania aimed at ending Acacia gold export ban – by Niall McGee (Globe and Mail – February 21, 2019)

February 21, 2019

https://www.theglobeandmail.com/

Barrick Gold Corp. has reached a new agreement with Tanzania that may finally end a punishing multiyear gold-export ban at its subsidiary Acacia Mining PLC that has weighed heavily on the share prices of both companies.

The development comes about six weeks after skilled African operator Mark Bristow took over as the new chief executive officer of Toronto-based Barrick.

The latest proposal would see Acacia split “economic benefits,” including taxes and royalties from its Tanzanian mines, 50/50 with the East African country. Acacia would also pay Tanzania US$300-million to resolve a long-running tax dispute. While the agreement is similar to one announced in late 2017, the tax penalty can be paid over time, instead up front. Barrick says it will present a proposal to Acacia in the “near future.”

Kirkland Lake expects a million ounces in 2019 – by Staff (Mining.com – February 21, 2019)

February 21, 2019

http://www.mining.com/

Canada’s Kirkland Lake Gold (TSX. NYSE: KL) announced today that management increased its consolidated three-year production guidance and improved its unit-cost guidance for 2019.

In a press release, the miner explained that there is potential for a million ounces in 2019 as guidance was increased to 920,000 – 1,000,000 ounces from the previously announced 740,000 – 800,000 ounces.

For next year, Kirkland Lake said guidance would be 930,000 – 1,010,000 ounces and for 2021 995,000 – 1,055,000 ounces.

Hudbay plans to spend $124 million to refurbish mill and double Lalor mine gold production (Thompson Citizen – February 20, 2019)

February 21, 2019

https://www.thompsoncitizen.net/

While recent news about the Northern Manitoba mining industry has mostly focused on ontraction and closures in Thompson and Flin Flon, Hudbay Minerals Inc. announced Feb. 19 that it expects gold production from its Lalor mine near Snow Lake to more than double by 2022 after it reopens the New Britannia mill, which will allow it to recover greater quantities of the precious metal from the ore.

Hudbay said in a press release that the refurbished New Britannia mill – a project the company will spend about $124 million on – is expected to achieve gold recoveries of 93 per cent from the copper-rich Lalor ore compared to current recovery rates of about 53 per cent at the stall Mill.

Hudbay intends to spend $10 million this year on the New Britannia mill, which will eventually be equipped with a copper flotation and dewatering circuit as well as a pipeline to direct the tailings to an existing facility.

Column: LME copper squeeze will test market’s bull credentials – by Andy Home (Reuters U.K. – February 21, 2019)

February 21, 2019

https://uk.reuters.com/

LONDON (Reuters) – Is copper finally about to break up out of its well-trodden seven-month range? London Metal Exchange (LME) three-month copper came tantalisingly close on Wednesday with a mini-surge to $6,426.50, challenging the upper band of the $5,725 to $6,440 range that has defined the market since July 2018.

The market was regrouping Thursday around the $6,380 level. Glencore set the ball rolling with an announcement that an “updated mine plan” at its Mutanda copper operations in the Democratic Republic of Congo would reduce output by 100,000 tonnes per year.

Momentum came from chart dynamics, specifically a break of the 200-day moving average on Tuesday, and frantic covering by options traders against upside exposure.