Wednesday 13th December 2017

Resource Clips


January, 2014

Cameco’s $450-million cash infusion excites acquisition anticipation

January 31st, 2014

This story has been moved here.

Why the strikes are doing nothing for the platinum price

January 31st, 2014

by Frik Els | January 30, 2014 | Reprinted by permission of MINING.com

Workers began labour action a week ago at the world’s three largest platinum producers, Anglo American Platinum, Impala Platinum and Lonmin.

Together the South African companies’ mines produced 3.5 million ounces in 2012, almost 60% of the world’s platinum.

Why the strikes are doing nothing for the platinum price

Strikers want R12,500 a month. That’s US$1,120.

Barclays says in a research note the co-ordinated strike action is bound to significantly disrupt supply, but given the huge inventories built up at the big three producers, upside for the platinum price is limited.

Indeed, since the strike action kicked off on January 23, the spot platinum price on Nymex in New York is down almost 5%. The picture for palladium is much the same.

The reason for the soft price is mostly due to stockpiles at Nymex warehouses, which are up 20% year-on-year to the highest level in 10 years at more than 250,000 ounces.

At the same time producers have added some 200,000 ounces to above-ground stocks over the year to the end of September.

A physically backed platinum ETF launched by a Johannesburg bank in April has also pulled in 770,000 ounces of metal, although plans for a palladium ETF have now been pushed aside.

Scrap supply is also expected to rise sharply by almost 13% this year to 1.3 million ounces.

That compares to the UK bank’s estimates of roughly 10,000 ounces of platinum and 5,000 ounces of palladium production lost each day due to the strikes, which don’t seem closer to resolution.

Over the last two years following deadly clashes at a Lonmin mine, the three companies lost a combined 880,000 ounces due to strikes and labour unrest, but the shaky mine supply picture has not moved the price.

Compared to this time last year the precious metal, used primarily for emission reduction in autos and also in television and computer screens, is down 18.6%.

Reprinted by permission of MINING.com

January 31st, 2014

Commerce Resources hits pay dirt at Eldor and shares jump 20% Stockhouse
Luisa Moreno: Why the industrial minerals sector is here to stay Streetwise Reports
Frank Holmes: Why the recent lift in junior miners will likely continue VantageWire
Ten pillars of financial independence GoldSeek
The biggest buyer of gold? Equedia
Fluorspar analysis: Q1 2014 outlook Industrial Minerals

Despite the downturn

January 31st, 2014

Roundup 2014 speakers discuss how investors can profit and companies thrive

by Greg Klein

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We’re near bottom, we’ve hit bottom, the worst is behind us—over the last few wretched years those comments have come repeatedly from speakers at industry conferences. So maybe Victoria Yehl put it best in her January 30 closing remarks at Roundup 2014: “You, as the attendees and the delegates, let us know what’s going on in this industry … almost every evening at the Seawall Bar and Grill. It was certainly a higher level of enthusiasm than we’ve seen for a number of years.”

As chairperson of the Association for Mineral Exploration British Columbia’s annual event, Yehl was referring to the evening get-togethers, known for a non-market type of liquidity. But boozy as it might have been, can so much enthusiasm be dismissed?

Roundup 2014 speakers discuss how investors can profit and companies thrive

Near-record attendance and growing optimism characterized
AME BC’s Roundup 2014, “the world’s premier technical
mineral exploration conference.”

Yehl thanked company sponsors who came through despite tough times and noted a near-record crowd of 6,643 people from 37 countries, a possible indication of not-so-tough times ahead. Roundup 2014’s five last speakers further developed that sentiment.

The guardedly optimistic group included Rick Rule, who told investors they can be contrarians or victims: “The choice is yours.” Discussing some potential “fire sale prices” in resource stocks, the chairman of Sprott US Holdings said, “When I talk about coal now people say, ‘Global warming, you’re the culprit.’ I love it when people aren’t merely bored, they’re hostile.”

Uranium, he added, “is cheap. Zinc is cheap. People hate nickel…. Until three or four months ago natural gas was cheap, cheap, cheap.”

Bull markets follow bear markets “as day follows night,” Rule argued. But he warned that although a valuation’s increase might be inevitable, it isn’t necessarily imminent. Profits require time and patience, he emphasized.

Turning the forum’s attention from investors to companies, Silver Wheaton TSX:SLW president/CEO Randy Smallwood said most financing has been coming from various types of debt. The streaming model, he maintained, allows companies to optimize their portfolios through deals on non-core assets. “Seventy percent of silver does not come from silver mines,” he pointed out. About 40% comes from copper mines, another 15% from lead-zinc operations. Those miners “aren’t interested in silver. They’re driven by copper, they’re driven by lead-zinc.”

A new type of deal announced in November offers some juniors additional hope, Smallwood said. Silver Wheaton stepped in earlier than usual to give Sandspring Resources TSXV:SSP an initial $13.5 million to take its Toroparu gold project in Guyana to feasibility.

“If they had gone out and raised $13.5 million in the market, their current shareholders would have lost 33% of the value of that project…. What they did was give us 10% of the gold, if we fund them another $135 million when they get to the point of construction. It’s pretty attractive for their shareholders. It makes a lot of sense for juniors to consider this.”

But with prefeasibility in place, Toroparu was already quite advanced. Exploration geologist Miles Thompson discussed earlier-stage projects and the “bizarre disconnect between markets and the time needed to find and develop mines.”

“Unfortunately the easy stuff has already been found and our job is becoming increasingly harder,” said the director of Reservoir Minerals TSXV:RMC and CEO/chairman of Lara Exploration TSXV:LRA. For all that, Reservoir has been successfully raising money and spending it in Serbia for over 10 years. “We follow the prospect generator business model, which means we work the same way the pharmaceutical industry works, the software industry…. We see ourselves as R&D teams. We build projects, we define targets, we work out projects for mining companies and investors.”

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January 30th, 2014

Commerce Resources hits pay dirt at Eldor and shares jump 20% Stockhouse
Luisa Moreno: Why the industrial minerals sector is here to stay Streetwise Reports
Frank Holmes: Why the recent lift in junior miners will likely continue VantageWire
Ten pillars of financial independence GoldSeek
The biggest buyer of gold? Equedia
Fluorspar analysis: Q1 2014 outlook Industrial Minerals

Canadian mining sector employs more workers than we thought

January 29th, 2014

by Ana Komnenic | January 29, 2014 | Reprinted by permission of MINING.com

The mining industry is a big employer in Canada, but according to new data we may have underestimated just how big. The Mining Association of Canada’s latest Facts and Figures report reveals a “dramatic increase” in the number of Canadians employed in mining and related sectors.

Canadian mining sector employs more workers than we thought

Photo: Harry Rowed, National Film Board of Canada

In 2012 the industry employed more than 418,000 people in full-time-equivalent positions—compared with 333,000 in 2011—according to the association, which based its research on Natural Resources Canada estimates, most of which are from 2012.

Previous data did not capture support activities such as drilling and exploration. The inclusion of these jobs accounts for most of the increases in mining sector employment.

“This remarkable employment figure is a much more accurate view of the Canadian mining industry’s role as both a major employer and economic driver in Canada,” said MAC CEO Pierre Gratton. “It also adds to our already impressive employment figures. Not only is the mining industry the top paying industrial sector in the country, but it is also the largest private sector employer of aboriginal people on a proportional basis and supports thousands of indirect jobs.”

Facts and figures

  • Mining-related employment represents one in every 41 Canadian jobs

  • The mining industry contributed $52.6 billion to Canada’s GDP in 2012

  • Mining accounted for more than 20% of the value of Canadian goods exported in 2012

  • The average weekly pay for a mining worker in 2012 was $1,559—surpassing the earnings of workers in forestry, manufacturing, finance and construction

  • In 2012, the Toronto Stock Exchange and TSX Venture Exchange accounted for 70% of the world’s mining equity financings

Challenges

Despite a dismal year for commodity prices and the threat of a slowdown in the pace of China’s economic growth, MAC remains optimistic about the mining industry’s prospects, pointing to the sector’s cyclical nature.

“Given the growth projections for China, India and elsewhere, and assuming a positive investment environment, demand for minerals and metals is likely to remain strong over the medium to long term,” MAC wrote.

The main challenges identified by the association are related to regulation, taxes and human resources. According to MAC, mine proposals and expansions have to go through too many environmental assessments and there’s too much uncertainty surrounding new approval processes—which are supposed to be more efficient and timely.

Another concern is the so-called “deficit” in workers, which MAC says will be compounded by the approaching retirement of many skilled workers.

“Addressing the human resources challenge will take a large and co-ordinated effort by the industry, educational institutions and all levels of government in the coming years.”

Finally, MAC also points to a need for infrastructure investment. As the largest customer group of Canada’s transportation sector, the association says the mining industry must be able to rely on more modern and efficient transportation infrastructure at competitive prices.

Read the full report here.

Reprinted by permission of MINING.com

January 29th, 2014

Commerce Resources hits pay dirt at Eldor and shares jump 20% Stockhouse
Luisa Moreno: Why the industrial minerals sector is here to stay Streetwise Reports
Frank Holmes: Why the recent lift in junior miners will likely continue VantageWire
Ten pillars of financial independence GoldSeek
The biggest buyer of gold? Equedia
Fluorspar analysis: Q1 2014 outlook Industrial Minerals

Caterpillar sees “some signs of improvement” but expects mining companies to further reduce costs in 2014

January 28th, 2014

by Ana Komnenic | January 28, 2014 | Reprinted by permission of MINING.com

Caterpillar sees “some signs of improvement” but expects mining companies to further reduce costs in 2014

 

Caterpillar Inc NYE:CAT, the world’s biggest mining and construction equipment provider, is bracing for a year similar to 2013, when sales to mining companies plunged as miners struggled with weak commodity prices.

The company sees “some signs of improvement in the global economy,” which should help its construction and power systems segments, but expects sales and revenues to be similar to 2013 as sales to the resource industry decline modestly.

“We expect sales of mining equipment will remain weak in 2014 and our outlook reflects a sales decline of about 10% in resource industries,” Caterpillar said in its end-of-year results.

The company expects profit per share of $5.85 this year—not including restructuring costs—compared with $5.75 and $8.48 in 2012. Restructuring costs could affect this by about 55 cents per share.

Caterpillar also said it will repurchase about $1.7 billion of stock during the first quarter of 2014 and an additional $10 billion over the next four years—“a result of our record cash flow, the strength of our balance sheet and our confidence in the long-term future of Caterpillar,” the company noted.

This will complete a $7.5-billion repurchase originally approved in 2007. The new $10-billion authorization will expire in December 2018. The announcement bumped the firm’s share price by nearly 6% to trade at $91.29 per share.

Looking back at 2013, Caterpillar says the year “turned out to be worse than we anticipated.”

Sales and revenue were $55.7 billion for the year, down 16% from 2012, driven by a drop in sales of new mining machines. But the company beat analysts’ expectations: According to AP, a FactSet survey put the equipment maker’s Q3 2013 profit at $1.27 per share. Caterpillar actually reported $1.54. At $56 billion in sales forecasted for 2014, the company anticipates a slightly better year than 13 estimates compiled by Bloomberg.

CEO Doug Oberhelman said cost flexibility was critical this past year to maintaining profitability. The cost-cutting measures included several rounds of layoffs, affecting nearly 10,000 workers.

“Cost flexibility is critical to our strategy and was a significant focus in 2013 as we took substantial actions to help maintain profitability as sales declined,” Oberhelman said. “It wasn’t easy, especially for our employees who endured an incredibly tough year, but the actions we initiated helped us deliver strong operational performance in 2013.”

Reprinted by permission of MINING.com

Lakeland Resources president/CEO Jonathan Armes comments on exploration at the Gibbon’s Creek uranium project

January 28th, 2014

…Read More

January 28th, 2014

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EU lawmakers seal deal on financial market rules overhaul VantageWire
Fluorspar analysis: Q1 2014 outlook Industrial Minerals