Monday 26th September 2016

Resource Clips


Week in review

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Graphite’s still “the one to watch”

In an interview posted Tuesday in the Gold Report, Chris Berry said graphite’s current and long-term prospects remain solid. The co-author of Morning Notes and founder of House Mountain Partners stated that, despite vagaries in the commodities market, “Graphite is used in roughly 180 different products and its ubiquity is an indication to me that more graphite of all types will be needed on world markets in the future. While graphite prices have fallen, they have not fallen as far or as fast as other commodities such as iron ore or coal.”

Graphite is used in roughly 180 different products and its ubiquity is an indication to me that more graphite of all types will be needed on world markets in the future.—Chris Berry, as quoted in the Gold Report

Berry sees future growth in next-generation technologies combined with a much higher standard of living in countries like China and India. He cautioned, however, that “a graphite company will only be profitable if it has agreements with end users to sell its product to…. I think this will be a challenging hurdle for any graphite junior exploration company to navigate—though not insurmountable.”

Monday’s edition of Morning Notes provided a chart comparing enterprise value per share for seven companies that have graphite resource estimates.

Wednesday’s Industrial Minerals reported that graphite prices have stabilized after a decline that began in May. The authoritative journal expects prices to remain stable for the rest of the year, before rising in January or February.

A very political environment

A seemingly political—if not capricious—B.C. government rejection of a mining proposal was back in the news Tuesday. According to Business in Vancouver, Pacific Booker Minerals TSXV:BKM director Erik Tornquist “said if negotiation with the province fails, the company believes it has other potential recourse to push the project forward.”

On October 1 the company announced that two B.C. government ministries rejected its proposed Morrison copper-gold-molybdenum mine, even though a 207-page report from the province’s Environmental Assessment Office repeatedly stated that with successful implementation of mitigation measures and conditions, the mine is “not likely to have significant adverse effects.”

As BIV quoted Tornquist, “…. on that basis the [environmental assessment] certificate should have been issued.”

Gavin Dirom, president/CEO of the Association for Mineral Exploration BC, added, “It was challenging to see how the [EAO] report and the actual findings in the environmental assessment led to the final decision.”

In a previous AME BC statement, Dirom said the rejection “does not appear to represent a science-based decision-making process that was transparent, logical or clear.”

But BIV reported that B.C. Environment Minister Terry Lake “said that aside from the environmental assessment, the government considered other evidence before rendering its decision. ‘In this case, there was a letter from the Environmental Protection Division, there was a letter from the Energy and Mines ministry and two letters from first nations, all expressing serious concerns about the ability of those conditions to offset or mitigate the concerns that had been identified.’”

BIV, however, referred to an October 31 statement in which the company said its 16,000-page application “adequately and reasonably addressed all the issues raised by government agencies, first nations and the public (over 70 government agency reviewers, nine organizations and over 800 issues/comments).”

BIV didn’t outline Pacific Booker’s current negotiation attempts or potential recourse. On October 2 a Ministry of Environment spokesperson informed ResourceClips that its decision can’t be appealed. The company may apply for a judicial review to determine possible violations of the environmental assessment act or propose an entirely new project for the property.

Ottawa ambiguous, B.C. supportive towards Chinese miners

Widespread outcry over a scheme to import Chinese miners has prompted Canada’s federal government to review its temporary worker program. Chinese interests plan to staff four proposed B.C. coal mines with up to 2,000 Chinese workers, a “temporary” measure that could last until 2025 or later. Permits for 201 workers have already been issued.

In a Thursday statement, federal Minister of Human Resources and Skills Development Diane Finley said, “We are not satisfied that sufficient efforts were made to recruit or train Canadians interested in these jobs. Specifically, the requirement that applicants have skills in a foreign language does not appear to be linked to a genuine job requirement.”

Job openings posted in Canada offered substandard wages by Canadian industry standards. Mandarin was listed as a requirement for about 70 of the positions.

But Finley’s concluding remark might suggest she would rationalize the use of Chinese miners to protect a few related jobs for Canadians: “In conducting our review of the program, we recognize the impact it may have on Canadians employed in connection with the Dehua Mines project. We will seek to avoid unintended harm to their jobs.”

A Thursday Canadian Press story published in the Vancouver Province noted that B.C. Jobs Minister Pat Bell, “who has been one of the project’s most vocal supporters,” wasn’t available for an interview. “He issued a brief statement that ignored Finley’s criticisms of the HD Mining project,” CP reported. “Bell has repeatedly defended HD Mining’s decision to bring in foreign workers, and his ministry has released two fact sheets designed to debunk ‘myths’ surrounding the project.”

Certainly Bell obfuscated a number of points involving wages, language, training and the “temporary” nature of the plan. He did state, however, that “Grande Cache Coal, one of only two underground coal mines operating in Canada, also uses temporary foreign workers.”

The federal government’s response followed Monday’s application by two unions for an injunction blocking the 201 permits already issued.

Read more about proponents Canadian Dehua and HD International here, here and here.

Crisis du jour or critical epiphany?

This too shall pass. Or be delayed. Or hit us with frightening intensity. Anyone not yet suffering from fiscal cliff fatigue might find interesting this MarketWatch round-up of related commentary. Look in vain, however, for a solid explanation of why so much of the media missed this for so long.

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