Monday 11th December 2017

Resource Clips


January, 2013

Overcoming country risk

January 31st, 2013

Canada Fluorspar and Prima Fluorspar develop critical mineral projects at home

by Greg Klein

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(Update: On April 19, 2013, Prima Fluorspar Corp TSXV:PF began trading on the TSX Venture. Read more here.)

When country risk threatens a vital commodity’s supply, it’s time to find new sources. And it’s because of country risk that fluorspar gained its designation as a critical mineral. Recent news from Canadian juniors, however, offers some reassurance for this widely used but less-widely known commodity.

Canada Fluorspar and Prima Fluorspar develop critical mineral projects at home

The rock looks almost too pretty to be practical,
yet fluorspar products are nearly ubiquitous in their uses.

So what is this stuff? Also known as fluorite and measured in calcium fluoride (CaF2), fluorspar comes in two grades. Metspar, or metallurgical grade, is used to make steel, aluminum, ceramics and glass, among other necessities. The higher grade and more highly valued acidspar, or acid grade, is largely used in hydrofluoric acid, which is used in hydrofluorocarbons (HFCs) and their successors, hydrofluoro-olefins (HFOs), used in coolants for fridges, freezers and air conditioners. Fluorspar finds its way into several other uses from pharmaceuticals to pesticides and toothpaste to Teflon.

Fluorspar customers can be formidable in size, including such giants as Alcoa, BASF, Honeywell, DuPont, Dow, 3M and Rio Tinto Alcan.

With China producing up to 58% of world fluorspar supply, a familiar story unfolds. The country has restricted exports to protect its own stocks, which the Chinese use to produce value-added products that the rest of the world needs. Mexico, Mongolia and South Africa comprise the planet’s other major sources.

Not surprisingly, country risk was “a huge factor” in the European Union designation of fluorspar as a critical mineral, says Simon Moores. A writer for the authoritative London-based journal Industrial Minerals, Moores spoke to ResourceClips in Vancouver while attending the Mineral Exploration Roundup Conference 2013.

Country risk actually works out to be “positive for the Canadian-based junior companies,” he says. “One of their selling points is having a stable, friendly country to build a new mine.” That doesn’t necessarily mean other supplies will replace China, he emphasizes. But the market needs diversity of supply as a long-term approach.

Hoping to provide some of that supply is Canada Fluorspar TSXV:CFI. On January 30 the company released an updated pre-feasibility study for its St. Lawrence fluorspar project in southern Newfoundland, a 50/50 joint venture with Arkema, a worldwide producer of chemicals headquartered in France.

Based on a fluorspar price of $500 a tonne and using a discount rate of 5%, the pre-feas projects a pre-tax net present value of $124 million and a 16.4% pre-tax internal rate of return. Should fluorspar average $550 a tonne, the numbers would change to a pre-tax NPV of $182 million and a 21.1% pre-tax IRR.

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January 30th, 2013

The new strategy for adding value to junior/midtier gold (Hint: It’s not by making big M&A deals) by GoldSeek
Benoit Gascon: An insider’s take on the complicated graphite market by the Gold Report
Six Canadian banks downgraded by Moody’s by the Financial Post
Kitco’s Jon Nadler on India’s gold tax and platinum prices by Equedia
Uranium: Energy solution and risk-on opportunity by VantageWire
Hi yo silver, away! by the Grandich Report

Golden Guyana

January 29th, 2013

Companies like Eagle Mountain find near-surface deposits offset dismal markets

by Greg Klein

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Gold at surface—it’s an explorer’s dream and the attraction for several companies working in Guyana. Notwithstanding thick jungles, heavy rain and limited infrastructure, the country inspires optimism among juniors working to overcome pessimistic capital markets.

And it’s here that one company found not only a project but also an in situ team that might transform the explorer into a producer. To do so, Eagle Mountain Gold TSXV:Z has set an ambitious timeline with hopes of bringing 2014 production to its eponymous project in central Guyana.

Companies like Eagle Mountain find near-surface deposits offset dismal markets

Eagle Mountain Gold wants to phase in production
with a low initial capex and minimal share dilution.

Certainly president/CEO/director Ioannis (Yannis) Tsitos sounds confident. “First of all, we’ve got a board and management team that has put projects into production. Secondly, we’re looking at a robust gold price and my view and all the macro-economic analysis suggest this will continue. In terms of operating in Guyana, we can run this with decent costs. I don’t see why we should follow the formula of building up a company just to sell it.”

The company holds 50% of the project, with an option to pick up another 45% from IAMGOLD TSX:IMG for $1 million in cash and/or shares by April. The Guyanese government holds the remainder.

This year’s schedule looks busy, with more drilling to build the resource, work on the environmental impact assessment and a PEA, which is slated for Q2. Tsitos then plans to skip the pre-feasibility stage to reach full feas in 2014. Should economics, permitting and financing fall into place, open-pit gold production could begin the same year, he says.

Ambitious as it is, the schedule’s cost-effective, Tsitos maintains. “This plan calls for minimum dilution because the capex would be smaller. We’d first focus on the easiest parts of the deposits, which are the oxide parts, effectively mining the top 25 metres over a very extensive area. Later we’d expand into mining hard rock with a bigger mill and power requirement. Our approach is a phased development, therefore the timeline is aggressive but viable.” He foresees the mine expanding to several open pits feeding a central processing facility.

Companies like Eagle Mountain find near-surface deposits offset dismal markets

Dense jungle doesn’t deter drilling in gold-rich Guyana.

Last November’s resource update for the Zion and Kilroy zones uses a cutoff of 0.5 grams per tonne gold, showing:

  • an indicated category of 3.92 million tonnes averaging 1.49 g/t for 188,000 gold ounces
  • an inferred category of 20.63 million tonnes averaging 1.19 g/t for 792,000 gold ounces.

The deposit remains open in three lateral directions and at depth, the technical report states. Mineralization so far covers just 300 hectares of the 5,050-hectare property.

To offer perspective on the strategy of phased development, the resource gives separate numbers for oxidized rock, or saprolite, and for non-oxidized “fresh” or hard rock underneath:

  • the indicated category includes 74,000 gold ounces in saprolite material and 114,000 ounces in fresh material
  • the inferred category includes 306,000 gold ounces in saprolite material and 486,000 ounces in fresh material.

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January 29th, 2013

Benoit Gascon: An insider’s take on the complicated graphite market by the Gold Report
Six Canadian banks downgraded by Moody’s by the Financial Post
Kitco’s Jon Nadler on India’s gold tax and platinum prices by Equedia
Uranium: Energy solution and risk-on opportunity by VantageWire
Forget Germany, check out how Turkey’s central bank handles gold by GoldSeek
Hi yo silver, away! by the Grandich Report

B.C. exploration spending hits all-time high

January 28th, 2013

Resource Clips - essential news on junior gold mining and junior silver miningBritish Columbia saw record expenditures of $680 million on mineral exploration last year, a 47% increase over the previous record set in 2011. B.C. Premier Christy Clark made the announcement on January 28 at the Mineral Exploration Roundup Conference 2013 in Vancouver.

Our sincere hope is that many of these projects become the mines of the future to ensure that our province continues to supply the metals, coal and minerals that our society—and developing economies around the world—need for everyday life.—AME BC chairperson
Michael McPhie

“We are pleased that advanced metal and coal exploration projects in all regions of the province have led to these impressive numbers,” said a statement from Michael McPhie, chairperson of the Association for Mineral Exploration BC. “Our sincere hope is that many of these projects become the mines of the future to ensure that our province continues to supply the metals, coal and minerals that our society—and developing economies around the world—need for everyday life.”

The numbers were compiled by the provincial Ministry of Energy, Mines and Natural Gas. According to other department figures, three new mines opened in B.C. since 2011, with three more under construction and five others permitted for major expansion. B.C.’s mining and related minerals sectors employed 29,000 people in 2011.

In addition the government announced an online application process beginning in February to reduce the time taken for notice of work permits for water, land and mineral exploration. The province has targeted an eventual 60-day turnaround time for the permits.

The premier also proclaimed January 27 to February 2 as Mineral Exploration Week in B.C.

AME BC’s Roundup 2013 continues to January 31. Read more about the event here.

January 28th, 2013

The world according to Doug Casey by the Gold Report
Six Canadian banks downgraded by Moody’s by the Financial Post
Kitco’s Jon Nadler on India’s gold tax and platinum prices by Equedia
Uranium: Energy solution and risk-on opportunity by VantageWire
Forget Germany, check out how Turkey’s central bank handles gold by GoldSeek
Hi yo Silver, away! by the Grandich Report

Week in review

January 25th, 2013

A mining and exploration retrospect for January 19 to 25, 2013

by Greg Klein

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Canadian company’s employees still held hostage in Colombia

Kidnappers continue to hold five workers abducted from Braeval Mining’s TSX:BVL Snow Mine project in Colombia. According to a Thursday story in Colombia Reports, two Colombian hostages are being held separately from two Peruvians and a Canadian. The government has offered a cash reward while the army said it has 2,700 soldiers searching for the victims.

A Monday Colombia Reports article said soldiers had arrested three of the 20 to 25 kidnappers. The story gave the victims’ names as Canadian Jernoc Wobert, Peruvians Jose Manami and Javier Ochoa, and Colombians William Batista and Manuel Francisco Zabaleta.

Rebels abducted them on January 18 in northern Colombia’s Bolivar department. Among grievances cited by the kidnappers, the National Liberation Army (ELN) listed unequal distribution of mining rights, stated Colombia Reports.

Most Mali operations safe so far

A mining and exploration retrospect

“If you are still in Mali, you should leave immediately,” Canada’s Foreign Affairs department warned on Sunday. But Tuesday’s Toronto Star reported that work continues in most of southwestern Mali’s mining operations while French-led forces battle rebels hundreds of kilometres away. Over 15 Canadian exploration and mining companies operate in the country although some, especially in the northeast, have suspended work.

Endeavour Mining TSX:EDV Neil Woodyer described the turmoil as “part of the nature of the beast, as far as we’re concerned, being miners.” But his company’s properties, like most of Mali’s advanced-stage projects and operating mines, are in the southwest.

Mali is Africa’s third-largest gold-mining country, the Star reported. According to a 2008 estimate cited by the CBC, about 17% of the country’s government revenue comes from gold mining.

BCSC finds sloppy disclosures an ongoing problem

NI 43-101 regulations govern not only news releases and technical reports but also company Web sites, speeches, corporate presentations and other communications considered to be voluntary disclosures. But that fact sometimes slips the minds of company officials.

Of a sample of companies reviewed by the British Columbia Securities Commission between 2009 and 2012, only half met 43-101 standards in their voluntary disclosures. According to the BCSC 2012 Mining Report released Thursday, the problem is especially apparent when reporting PEA results, historic estimates, quality control, lab procedures and identifying the qualified person who takes responsibility for the information.

Yet compliance in non-voluntary disclosures is hardly reassuring. Only 65% of companies made the 43-101 grade. PEAs were especially problematic, flunking out in more than half of all cases for both voluntary and compulsory disclosures. A lack of cautionary language was the most frequent reason.

Non-compliant data verification, resource and reserve estimates, pre‐feas and feasibility studies also raised concerns. A common problem with resource estimates was totalling all categories instead of segregating the inferred numbers.

Among other monitoring activities, the commission targeted 82 companies between February 2011 and September 2012 that were selected because of “poor disclosure we observe in e-mail blasts, news releases and paid promotions on industry‐related Web sites,” the report stated.

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January 25th, 2013

Kitco’s Jon Nadler on India’s gold tax and platinum prices by Equedia
Uranium: Energy solution and risk-on opportunity by VantageWire
Forget Germany, check out how Turkey’s central bank handles gold by GoldSeek
Are corporate directors really in charge? by the Financial Post
Keys to rare earth companies’ success: Innovation and cost-efficiency by the Gold Report
Hi yo Silver, away! by the Grandich Report

January 24th, 2013

Uranium: Energy solution and risk-on opportunity by VantageWire
Forget Germany, check out how Turkey’s central bank handles gold by GoldSeek
Are corporate directors really in charge? by the Financial Post
India, Japan manoeuvres moving gold by Equedia
Keys to rare earth companies’ success: Innovation and cost-efficiency by the Gold Report
Hi yo Silver, away! by the Grandich Report

It all starts with prospecting

January 23rd, 2013

AME BC’s Roundup addresses the strengths and challenges of mineral exploration

by Greg Klein

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Following so closely on the Vancouver Resource Investment Conference, a somewhat related Vancouver event might suggest overkill. But it more likely indicates the unflagging enthusiasm, despite tough times, that draws people to the world’s mining capital. On that note, AME BC presents the Mineral Exploration Roundup Conference 2013, “the world’s premier technical conference for mineral exploration development,” from January 28 to 31.

Prospector Craig Lynes searches for another British Columbia discovery

Prospector Craig Lynes searches for another British Columbia discovery.
(Photo: Teresa Lynes, courtesy AME BC)

Unlike VRIC’s investor focus, Roundup attracts industry insiders, particularly from the geosciences and occupations derived from their work. But this year’s overall theme, Resources for Life: Digging Deeper, is directed at the public.

“‘Resources for life’ addresses a disconnect, a lack of understanding about the materials we use in our daily lives and where they come from,” explains Gavin Dirom, president/CEO of the Association for Mineral Exploration British Columbia. “We’re trying to help people draw the connection. So much of our society depends on mineral resources—they’re vital to our standard of living, our life.”

That doesn’t just mean the economy, he emphasizes. Energy, technology and any number of necessities as well as consumer goods depend on mineral resources.

To fulfil those needs, “prospectors and explorers are literally digging deeper and exploring further, using new methods and techniques to make the next discovery, find the next mineable deposit,” Dirom adds. “It’s imperative we do that because we need those resources.”

This year’s Roundup features trade show exhibits from over 240 companies, short courses of half a day to two days’ duration, technical forums and site visits. Some focal points include the Map Tent, where exploration boffins can study each other’s charts, the Core Shack, featuring rock from various projects around the world, and the Prospectors’ Tent, with maps, samples and photos from very early-stage work.

Roundup Rockhounds brings together geologists with high school students. The Aboriginal Pavilion, new this year, features speeches and group discussions involving representatives of native communities and mining companies.

This year’s Roundup is the 30th annual event and the first since AME BC celebrated its centennial. As such, it’s a time for Dirom to reflect on the industry’s future hopes and challenges.

B.C., he says, “is not perfect by any stretch. But it’s leading the way in showing the world how government, first nations and industry can work together for mutual benefit. That helps create support and certainty, and drives further investment. I think B.C.’s implementing cutting-edge public policy.”

As examples, he points to revenue-sharing agreements involving native communities with Thompson Creek Metals’ TSX:TCM Mount Milligan mine and New Gold’s TSX:NGD New Afton mine. Another such agreement will be announced during Roundup, he says, with more expected this year. “This is an ongoing implementation of a very progressive policy that a lot of people say is world-leading. People are looking to B.C. for positive examples of how to develop mutually beneficial relationships.”

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