Tag Archives | Canada Mining

No IPO on TSX for Last Half of 2008 – by Marilyn Scales

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

There was not a single initial public offering (IPO) made on the Toronto Stock Exchange (TSX) during the last six months of 2008 making it the worst year for IPOs in the last 10 years. The dearth of opportunity is highlighted in PricewaterhouseCoopers’ (PwC) annual look at activity on the exchange.

A meagre 57 new issues struggled to reach Canada’s equity markets in 2008, according to PwC, with a mere 10 registered on the TSX in the year ended Dec. 31, 2008. There were no new IPOs on the TSX in the final six months of the year. By comparison, there were 100 IPOs on all of Canada’s exchanges in 2007, with 36 new issues on the TSX.

The value of all issues on Canadian markets in 2008 was $682 million, down 80% from the $3.4 billion in 2007, the survey showed. The value of all issues on the TSX in 2008 was $547 million, off from $3.0 billion in 2007.

A quick look at the TSX numbers reveals that the mining industry successfully floated 13 IPOs on the senior exchange and 47 IPOs on the venture exchange in 2007. Activity included the largest IPO in North American history ($1.26 billion by Franco-Nevada Corp.) and B2 Gold’s $100-million issue on the venture exchange.

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Good News Gold, Bad News Base Metals – by Marilyn Scales

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

Let’s start with the really good news. Agnico-Eagle Mines of Toronto has declared its 27th consecutive annual cash dividend. The payment of US$0.18 per common share will be made on March 27, 2009, to shareholders of record as of March 13, 2009. 

Hearing from an optimistic miner in these times is very good news, indeed.

“Agnico-Eagle enters 2009 with a strengthened balance sheet and the expectation that over the next 15 months we will complete the construction of three more gold mines. We also anticipate further increases in gold reserves and resources in 2009 as we continue with an extensive exploration program on our large gold deposits”, said Sean Boyd, vice-chairman and CEO. “We also look forward to providing the results of our ongoing studies on four internal production growth opportunities that give the potential to enhance our superior growth beyond 2010,” he added.

Agnico is in the enviable position of doubling its gold output next year and doubling it again to 1.2 million oz in 2010. Cash costs are expected to be less than US$300/oz in 2010, and only US$320/oz from 2010 to 2018. 

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Hopes Fades for Crystallex’s Las Cristinas Gold Project – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

The history of the Las Cristinas gold project that CRYSTALLEX INTERNATIONAL of Toronto has tried to lay claim to is steeped in controversy and delay. But the squabbling may soon come to an end if Venezuelan president Hugo Chavez gets his way. He wants to nationalize the Las Cristinas project along with several other industries.

Placer Dome was one of the first companies to drill the Las Cristinas deposit in the early 1990s. The Canadian company formed a joint venture with Corporacion Venezolana de Guayana (CVG), and CVG remains the owner to this day. Crystallex was drilling the adjacent Albino concession at the time.

The entire Kilometre 88 area of Venezuela became one of the hottest gold plays in Latin America during the early 1990s. But the Las Cristinas deposit with 16.9 million contained oz of gold is the richest.

In 1997 Crystallex bought up a privately owned Venezuelan company said to own the rights to part of the Las Cristinas property. Placer Dome called the claim groundless, but it decided to suspend construction at Las Cristinas until the ownership question could be settled. In June 1998 the Venezuelan court dismissed Crystallex’s claim, clearing the way for Placer Dome and CVG to move forward. The next year low gold prices forced Placer Dome put the project on hold.

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Financial Woes Trim Mining Sector’s Capital Budgets – by Marilyn Scales

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

The global financial crisis looks to be the new reality for most mineral producers. Slumping stock markets, wobbly banks and lack of consumer demand are having an effect on Canadian miners, forcing them to trim their capital spending plans.

Here are a two examples.

Don Lindsay, CEO of Vancouver-based TECK, said the number one priority for his company is debt reduction during these times of weaker metal prices. Cash flow generated from operations will be used for that purpose at the expense of capital, sustaining and exploration budgets. “We haven’t come to a determination on how much that will be cut back but they will be cut back,” he promised. Consideration will also be given to selling certain unnamed assets. Teck recently arranged for a $9.8 billion bridge loan to finance its acquisition of FORDING CANADIAN COAL TRUST, and the company has a 20% share in the FORT HILLS OIL SANDS project where development costs have ballooned by 50% over the original estimate of $14.1 billion made in July 2007.

Calgary’s SUNCOR ENERGY has trimmed its 2009 capital budget 20% to $6 billion from the $7.5 billion spent in 2008. Of the 2009 budget, $3.6 billion will be spent on the Voyageur oil sands growth project. This commitment includes meeting spending and construction timelines for the third and fourth stages of the Firebag in situ operation. The completion date of the planned Voyageur upgrader has been pushed back one year to save money. The remaining $2.4 billion will be spent in the oil sands business ($1.7 billion), natural gas operations ($300 million) and refining ($400 million).

When large, well-managed corporations cut capital spending, smaller miners might do well to heed the call. I predict delays in many projects that cannot be economically completed without another round of higher commodity prices.

Mining industry observers have long been aware that this is a cyclical business. What surprises me is how long the upward cycle lasted (five years) and how fast the situation has been reversed (five weeks).

Grasping at Lies – NGOs, Mining and the Truth – by Marilyn Scales

 Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

“A lie told often enough becomes the truth.” – Lenin

Am I the only one who thinks there may be a conspiracy to defame BARRICK GOLD? The name of the Canadian company has cropped up recently in connection to a couple untruths, deliberate or not.

Last week it was a story circulated by Agence France-Presse and Dow Jones Newswires. Both implied that several miners were killed at the North Mara gold mine that Barrick operates in Tanzania. Dow Jones has since issued a corrected item. As it turns out the deaths occurred at the state-owned Buhemba gold mine. That mine is neither owned nor operated by Barrick, although the company’s mine rescue team responded immediately to the emergency.

In July there were autopsy photos of a gunshot victim allegedly killed by security guards from Barrick’s Porgera mine in Papua New Guinea circulating on the Internet. Again, neither the company or anyone in its employ had any involvement in the incident.

Barrick is not the first, only, or last mining company to be villanized by activists and NGOs with little regard for the truth. Junior miners, too, are accused of environmental and human rights abuses by organizations with political self-interests. I suspect Barrick is targeted because of its name, made recognizable by virtue of its worldwide success. I have seen the company in action at some of its Latin American projects, and I assure my readers that Barrick operates by the highest community and sustainability standards.

Okay, I’ll grant that some advocacy organizations do improve the lives of those they purport to represent. But I take issue with those that grasp at lies to put their cause into the spotlight. And a bald-faced lie that hits the press will be remembered for its shock value. The correction that follows will be largely ignored, especially by those who have an anti-mining axe to grind. I’m afraid Comrade Lenin will be proven correct.

Canadian Mining Facts from the Mining Association of Canada (MAC) – by Marilyn Scales

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

The MINING ASSOCIATION OF CANADA (MAC) released its latest “Facts and Figures 2008” publication at the recent Mines Ministers Conference in Saskatoon. In it are details about the production, reserves, exploration, trade and investment, innovation, tax and human resource aspects of our industry. That’s a lot of ground to cover in 65 pages, but MAC is once again the most comprehensive source of such numbers.

Here are a few of them:

VALUE: The contribution that the metals and minerals industry makes to Canada’s economy by value is relatively stable at 3.5% to 4.5%. Meanwhile, the gross domestic product (GDP) grew to $1.2 trillion in 2007. Of that amount, mineral extraction contributed $9.68 billion and mineral manufacturing $32.22 billion.

TOP TEN: Canada’s top ten minerals by value in 2007 were nickel ($9.90 billion), copper ($4.53 billion), potash ($3.14 billion), coal ($3.14 billion), uranium ($2.76 billion), iron ore ($2.51 billion), gold ($2.38 billion), zinc ($2.09 billion), cement ($1.80 billion) and diamonds ($1.45 billion). The biggest money is to be had in the oil sands. The value of synthetic crude oil last year was $14.80 billion.

RESERVES: Canadian reserves continue to decline as they have for the past 25 years. Years of rising commodity prices led to a “modest” increase in 2006 and 2007, but without exploration spending in this country, production will also decline.

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Canadian Election Overshadows Successful Mines Ministers’ Meeting – by Marilyn Scales

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

Prime Minister Stephen Harper’s call for a federal election on Oct. 14 was hardly a surprise. His Conservative party began running election-style ads at the beginning of September. Now, with the nation’s eyes and ears alert to campaign promises and mud-slinging, the recent meeting of Canada’s mines ministers has been largely overlooked.

Energy and mine ministers from the federal, provincial and territorial governments met in Saskatoon Sept. 7-9. On the agenda were issues related to the industry’s social licence.

“Key to our discussions was the recognition that the mining and industry sectors along with governments need to encourage and engage Aboriginal peoples and communities in a manner that is inclusive, transparent and characterized by mutual respect,” host and Saskatchewan Energy and Resources Minister Bill Boyd said in the warp-up press release.

The ministers recognized that the long-term prosperity of the mining and
energy sectors depends on addressing labour shortages and working with industry and other partners to address these issues on a priority and ongoing basis.

The ministers underscored the importance of continued collaboration between regulatory agencies to ensure high-quality and timely environmental assessments to promote sustainability. They also noted the importance of increasing collaboration on research and innovation with industry, governments and academic institutions to support industry competitiveness.

Finally, ministers discussed the importance of Canadian companies working to secure a social license for mineral development, at home and abroad, by building their capacity to meet the social, economic and environmental expectations of their host communities.

Seems the press release is using all the right words when it comes to creating a responsible and growing mining industry. But they are only words.

In the excitement of the coming federal election, watch for candidates to promise cash and policy support for mining. I’ll bet you won’t find much. If you do, drop me a line, [email protected].

Diamonds, Diamonds Everywhere – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

Imagine finding an exceptional, gem-quality white diamond weighing 189.6 carats. ROCKWELL DIAMONDS of Vancouver has done exactly that at its Klipdam mine near Kimberley, South Africa. The company reports that the stone is “oval in shape, somewhat flattened and strongly resorbed, and shows features typical of top colour high-value Type-2 gemstones.”

That description is sure to get everyone’s attention. So will the pictures of diamonds as large as 212-ct in the Diamond Gallery at www.RockwellDiamonds.com.

No less worthy of attention are recent exploration efforts for Canadian diamonds. Teams are finding diamonds and kimberlites at an astonishing rate this summer. Here are a few of them.

Vancouver’s COMMITTEE BAY RESOURCES and INDICATOR MINERALS reported the discovery of kimberlite boulders at the Borden project in Nunavut. Indicator minerals were visually identified in the float, and samples of the boulders have been sent for analysis.

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Canadian Mineral Facts and Figures from the Mining Association of Canada – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

The MINING ASSOCIATION OF CANADA (MAC) released its latest “Facts and Figures 2008” publication at the recent Mines Ministers Conference in Saskatoon. In it are details about the production, reserves, exploration, trade and investment, innovation, tax and human resource aspects of our industry. That’s a lot of ground to cover in 65 pages, but MAC is once again the most comprehensive source of such numbers.

Here are a few of them:

VALUE: The contribution that the metals and minerals industry makes to Canada’s economy by value is relatively stable at 3.5% to 4.5%. Meanwhile, the gross domestic product (GDP) grew to $1.2 trillion in 2007. Of that amount, mineral extraction contributed $9.68 billion and mineral manufacturing $32.22 billion.

TOP TEN: Canada’s top ten minerals by value in 2007 were nickel ($9.90 billion), copper ($4.53 billion), potash ($3.14 billion), coal ($3.14 billion), uranium ($2.76 billion), iron ore ($2.51 billion), gold ($2.38 billion), Continue Reading →

Mainstream Media Ignorance About Mining – Especially Waste Disposal – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

I’ve let the daily press get under my skin again. Newspapers and the CBC are telling the public that mining companies are going to destroy pristine Canadian lakes by turning them into dump sites for toxic mine waste. Why does the popular press still think that everything coming from a mine operation is “toxic”? Has no one outside the mining industry ever heard of sub-aqueous deposition?

There are 16 projects for which mining companies have applied to use lakes as tailings repositories, claim the environmentalists. The list includes the following 15:

BRITISH COLUMBIA
– NORTHGATE MINERALS – Kemess North (Duncan Lake)
– SHERWOOD COPPER – Kutcho Creek (Andrea Creek)
– ADANAC MOLY – Ruby Creek (Ruby Creek)
– TASEKO MINES – Prosperity (Fish Lake)
– IMPERIAL METALS – Red Chris
– TERRANE METALS – Mount Milligan

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What Has Gone Up Will Come Down – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication.

I am no economist, and I don’t have a magic formula to predict the future of commodity prices. Instead I read other people’s prognostications and watch for trends. Sadly, the trend that has is emerging involves a downturn in the cyclical high that miners have enjoyed since 2002.

For what my advice is worth, watch the US dollar get stronger. It would appear the recession caused by the sub-prime mortgage fiasco in that country was short-lived. The relative worth of the American dollar affects global commodity markets.

The price of crude oil has dropped from its US$145/bbl high in mid-July to below US$109 despite Hurricane Gustav’s trek across the Gulf of Mexico. The storm blew through the oil-producing region at a relatively mild strength of Category 2 and 1. Analysts who said only a week ago that Canadian gas prices would skyrocket to C$1.75/litre are now saying they will drop even further than the C$1.25/litre it is in Eastern Ontario today.

Everyone jumped on the bandwagon as the gold price topped US$1,000/oz in mid-March. Exploration, development and takeover activity reached a fever pitch. But the high cannot be sustained. With the exception of a brief rise to US$977/oz six weeks ago, the gold price continues to slide, closing just short of US$800/oz on Sept. 2. I would hazard a guess that no other metal price reflects such an inverse correlation to the value of the U.S. dollar.

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Canada Will Rule the North – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication.

In a bid to encourage economic development and defend Canadian sovereignty throughout the North, the federal government announced a new program of geo-mapping for Canada’s Arctic.

Prime Minister Stephen Harper made the announcement on Aug. 26, 2008, noting, “As I’ve said before, ‘use it or lose it’ is the first principle of sovereignty in the Arctic. To develop the North we must know the North. To protect the North, we must control the North. And to accomplish all our goals for the North, we must be in the North.”

Sovereignty in the North may not be a concept that miners frequently consider. Yet it is essential if Canadians are going to benefit from the potential natural resources. I include fresh water along with the metallic, diamondiferous and hydrocarbon deposits of the region. The United States is offering to claim sovereignty over the Arctic landscape, but that is not in our interests.

We must as Canadians make it very clear that the North—its people and its wealth—belong to us. The new federal initiatives will help ensure that reality. Promoting the mineral industry’s interests is a great way to do that.

The geo-mapping program will combine field research and advanced scientific analysis to provide Canadians with a fuller assessment on the extent of mineral and energy resources in the Canadian North. This information will help generate additional investment and economic development in Canada’s northern communities.

The geo-mapping announcement is the latest example of the government’s commitment to protecting Canada’s North. In the past week, Minister of Defence Peter MacKay has participated in Operation NANOOK, a major Canadian Forces Arctic defence exercise, and Minister of the Environment John Baird has announced three new National Wildlife areas on or around Baffin Island. Also, Secretary of State for Small Business Diane Ablonczy announced a major expansion of broadband services throughout the North.

British Columbia Continues to Attract Gold Hunters – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication.

Gold has been prized throughout history and remains one of the most sought-after metals today. In British Columbia gold was found along the Fraser River (1858), along the Peace River (1861) and in the interior (1865). Dawson Creek became the jumping off point for the great Klondike gold rush of 1898.

The modern gold prospector, spurred by high gold prices and with the help of sophisticated technology, is again scouring the map of British Columbia in hopes of striking it rich. News of bonanza grades is as welcome today as it was in the 19th Century.

For example, Pinnacle Mines (51%) and Mountain Boy Minerals (49%) recently reported grades as high as 81.57 g/t over 1.52 metres at their Silver Coin project near Stewart. A quick run through the metric calculator, and that is equivalent to over 2.4 oz/ton. Such grades bring a smile to most gold lovers I know. Plus the Silver Coin property appears to have recoverable amounts of silver, copper, zinc and lead.

Also in the Stewart area, drill core from Toronto’s Seabridge Gold’s Kerr-Sulphurets-Mitchell (KSM) project is not assaying high grades (it is generally less than 1.0 g/t Ag plus copper), but it is mineralized over exceptional lengths: 745 metres, 109 metres, 498 metres, 921 metres, 500 metres and so on. The company has circulated estimates of over 19.7 million oz of gold in indicated resources and 14.3 million oz in the inferred portion. If the gold grades don’t set a heart to fluttering, the millions of contained ounces should. (For readers of the base metal persuasion, the property may also host more than 8.0 billion lb of copper.)

The deposits described here may differ, but there is no doubt that the rush for the yellow metal in British Columbia never goes out of style.

Danger Lurks Despite Modern Technology – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication.

The mining industry has made great strides toward establishing workplaces that are safe and healthy for employees. We almost take for granted our computer-assisted, automated and equipment-enabled jobs. For many in the mining and exploration sectors, helicopters are the only transportation that can reach remote locations. For some a trip on a “chopper” is as routine as tying on their boots.

But sometimes technology lets us down. The technology that allows modern helicopter to fly so that drill crews can reach remote sites failed last week, and people died.

One crash happened near Alice Arm about 150 km north of Prince Rupert, B.C. Four passengers lost their lives. Dead are the pilot David Jeffrey Reid of Sidney, B.C., two employees of Bodnar Drilling, Walter Bodnar and his nephew Nicholas Bodnar (both of Rose du Lac, Manitoba). Also killed was a prospector, Frank Moehling of Calgary. They were headed to the Homestake Ridge property belonging to Bravo Ventures.

The Hughes MB500 helicopter that went down on Aug. 6 belonged to Prism Helicopters of Pitt Meadows, B.C. It was chartered by Vancouver’s Bravo Venture Group that is testing its Homestake Ridge copper-gold property.

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Can Coal-to-Hydrocarbons Replace Oil? – by Marilyn Scales

Marilyn Scales - Canadian Mining JournalMarilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication.

Like our readers, we at Canadain Mining Journal have watched the price of crude oil skyrocket and heard the voices of the “greens” calling for a more environmentally friendly energy source.

We don’t usually comment on the oil industry except the massive mining operations of the Alberta oil sands. The oil sands have been roundly criticized as one of the least environmentally friendly fuel sources. Their mining and processing could be made cleaner with a liberal injection of money, but the oil sands still produce conventional hydrocarbons in the end.

Ethanol has been suggested as a replacement for hydrocarbons. But the use of corn, rice and wheat in the manufacture of ethanol has played a major part in the rise of food staple prices, placing an unbearable burden on the world’s most disadvantaged people.

Coal, of course, is the second most popular energy source, behind hydrocarbons. It has a reputation of being dangerous to mine and dirty to burn. Continue Reading →