Monday 21st September 2020

Resource Clips

Fortnight in review

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The report, which resurfaced through a freedom of information request, provoked a bureaucratic turf war. B.C.’s Ministry of Energy, Mines and Natural Gas accused environmental staff of overstepping their jurisdiction and even breaking the law. According to Energy and Mines, the enviro ministry came to conclusions “without conducting file reviews, consulting with a mine inspector or the Mines Act, seeking advice on mining methods [or] having mine site reclamation experience.” But, the Sun said, “the ministries are planning to launch joint inspections next spring.”

B.C.’s placer mining industry dates back to the mid-19th century

B.C.’s placer mining industry dates back to the mid-19th century.
(Photo: Cariboo Mining Association)

An industry group learned about the audit only a few months ago. In the Cariboo Mining Association’s January/February newsletter, association president Chris Winther said the audit “has information from the past when we were much less regulated. Today in general most miners are following the rules.” He suggested the report “could kill the placer industry if it is perceived as truth.” The CMA has a meeting scheduled this month with environmental officials, he stated.

Rodger Stewart, director of resource management for B.C.’s Ministry of the Environment, told the Sun, “Certainly we have to recognize we are working with a sector that tends to be a mom-and-pop operation—not necessarily as sophisticated as a major [company].”

The Sun related Energy and Mines estimates that B.C. has 75 to 100 placer mines employing 90 to 130 people with annual gold revenue of $22 million to $30 million and provincial mineral taxes of $110,000 to $150,000.

Possible delisting looms for two companies in Toronto, New York

The TSX has given Cline Mining TSX:CMK 60 days to reattain listing requirements, the company announced on January 4. Cline is attempting a financial restructuring with Marret Asset Management after having failed to make a December 17 interest payment on US$2.5 million in bonds.

Last July Cline suspended operations at its New Elk metallurgical coal mine in Colorado “due to economic and recessionary pressures.” The suspension took effect one week after the company filed a resource update showing a 59% increase in the measured and indicated categories and a 360% inferred increase. New Elk was the company’s sole source of revenue.

Also on January 4, Gold Reserve Inc TSXV:GRZ announced it would appeal a delisting application by the NYSE. The company attributes its woes to Venezuela’s confiscation of Las Brisas gold-copper project in 2009. But Gold Reserve stated it hopes to regain status as an NYSE operating company through an April option agreement to earn a 51% interest in La Tortuga property, “a copper and gold prospect located in Jalisco state, Mexico.”

Meanwhile, down on the pink sheets

The U.S. Securities and Exchange Commission suspended trading of Southridge Enterprises on December 27, one day after the company claimed it had formed a “joint partnership” with Kinross Gold TSX:K on Southridge’s Cinco Minas and Gran Cabrera projects in Mexico. That claim followed a December 13 announcement that Southridge had signed a confidentiality agreement regarding the two projects.

On December 27 Kinross responded that Southridge’s joint partnership claims “are, to the best of Kinross’ knowledge, without any basis in fact.”

A subsequent Southridge e-mail to the Globe and Mail (subscription required) stated, “What we can say is that Southridge Enterprises does have two signed agreements from [Kinross exploration manager] Mr. Martin Moscosa, and we have e-mails … confirming his direct quotation,” the paper reported on January 1.

Kinross spokesperson Steve Mitchell then informed the G&M, “We will confirm once again that we are aware of no communications which establish any partnership or joint venture between Southridge and Kinross.”

But such was the excitement that Southridge stock almost reached a penny. The company’s OTC shares opened December 13, the day of its initial CA announcement, at $0.0054. On December 26, the day of Southridge’s Kinross announcement, the shares soared to a staggering $0.0096. The following day’s trading halt saw Southridge droop to a close of $0.0046.

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