Monday 11th December 2017

Resource Clips


February, 2015

February 27th, 2015

Banks face scrutiny over pricing of precious metals NAI 500
Trading small size and scaling in: Part I Equities Canada
Video: John Kaiser proposes a new system for financing juniors Stockhouse
Geologists going to Mars? Geology for Investors
Growth markets for new fertilizers Industrial Minerals
China is effectively consuming all of the world’s newly mined gold supply GoldSeek
Daniela Desormeaux: Hedge against short-term cycles with lithium Streetwise Reports

PDAC prevails

February 26th, 2015

Prospectors, developers and investors flock to Toronto for the world’s largest annual event of its kind

by Greg Klein

Prospectors, developers and investors flock to Toronto for the world’s largest annual event of its kind

The annual get-together brings Toronto a net economic impact of about $70 million, PDAC says.
(Photo: Prospectors and Developers Association of Canada)

 

Of course there’s partying too. With so many thousands of people swarming into Toronto for the March-1st-to-4th PDAC 2015, some R&R would be understandable—even compulsory. But “by far most of the effort is business,” maintains Rod Thomas, president of the Prospectors and Developers Association of Canada. “It’s an opportunity to meet people, look at projects in detail and keep abreast of what’s happening in the industry. And there’s a lot of deal-making going on. It’s a very hectic four days.”

The world’s largest and longest-running annual event of its kind, the PDAC convention has been an industry institution since 1932. Naturally it’s grown tremendously. Thomas, active for 20 years with the organization, has seen the convention grow from a few thousand attendees at the Royal York Hotel. “Now it’s 10 times that, an order of magnitude greater” and taking an ever-expanding presence at the Metro Toronto Convention Centre.

Prospectors, developers and investors flock to Toronto for the world’s largest annual event of its kind

Information, education, networking and opportunities
bring exhibitors and visitors back. (Photo: PDAC)

Thomas expects a turnout similar to last year, when over 25,000 attendees showed up, nearly a quarter of them from 102 countries other than Canada. Over 500 aboriginal delegates arrived, as did 374 media, 61 sponsors and representatives from 63 governments.

Welcoming them were 420 exhibiting organizations with 665 booths in the trade show and another 543 exhibitors with 572 booths in the investor exchange.

This year’s trade show will be even bigger, having expanded into the convention centre’s northern reach where, along with the prospecting tent and core shack, attendance is free.

And, like previous years, there’ll also be professional upgrading with 11 short courses and 19 technical sessions. Forums, product demonstrations, corporate presentations and talks by newsletter writers also fill the agenda. Additionally, about 60 companies will be vying for attention at the core shack. “A lot of deals get done there,” Thomas tells ResourceClips.com. “It’s fairly typical that senior company geologists, mining analysts and people wanting to make acquisitions will look at those projects to get a sense of what’s on offer, and a lot of deals get done. In fact a lot of deals get done at the convention. It’s a huge networking opportunity.”

Evidently companies find their participation worthwhile. “We offer a lot of value for money,” Thomas says. “If you look at other investment conferences of one form or another, we’re very competitive in terms of price but also in sheer size and what we offer for people who attend.”

Nor has the downturn effectively dampened enthusiasm. “As an industry we’re fairly resilient and optimistic,” Thomas adds. “The mining business is a depletion business. We need to replace those reserves that are being mined every day. The junior exploration and development industry’s intent is to explore and find new mines for the future. We go through these cycles. This is one of them. My career started in the late ’70s and I’ve probably been through four or five commodity price cycles.”

Prospectors, developers and investors flock to Toronto for the world’s largest annual event of its kind

Rod Thomas: “A lot of deals get done
at the convention. It’s a huge
networking opportunity.
(Photo: PDAC)

Difficulties remain, obviously. Having served both senior and junior companies as an exploration geologist and executive, Thomas sees two challenges in particular.

Access to capital is one of them. “The big mining companies produce revenue and they can devote a portion of that to exploration and development. But junior companies don’t have any cash flow. So we need to raise risk capital and it’s difficult doing that. Money is scarce right now, I think mainly because commodity prices are down.”

Then there’s access to land. “As junior companies, we need land to explore. Being able to explore in large areas can be problematic. We need social licence to operate and there are issues in some instances gaining access to land.”

Yet he senses growing optimism in the industry, noting renewed “activity in the marketplace—M&A activity and there’s been a bit of an uptick in deals being done, raising capital for example. Those are all early signs of an improvement in the market. The overarching aspect of the business is that it is a depletion business. So new mines need to be found.”

To find them, the world relies to a large extent on Canadians. “Canada is a global leader in mineral exploration and development,” he points out. “Roughly 60% of the world’s companies are Canadian and the vast majority of them are junior companies. Canada really plays a huge role and punches way above its weight in mineral exploration and mining.”

That helps explain PDAC’s endurance, not to mention the organization’s growth, which Thomas pegs at approximately 10,000 members, about 1,100 of whom are corporate members that include not only juniors and mid-tiers but also big names.

Certainly the industry has bolstered PDAC. But that can work both ways. “As an organization, we are the voice of mineral exploration and development in Canada and a lot of our companies work internationally as well,” Thomas says. “So we’re a Canadian organization but we have a global presence. We advocate for our industry.”

PDAC 2015 takes place March 1 to 4 at the Metro Toronto Convention Centre. Click here for attendee registration.

February 26th, 2015

Banks face scrutiny over pricing of precious metals NAI 500
Trading small size and scaling in: Part I Equities Canada
Video: John Kaiser proposes a new system for financing juniors Stockhouse
Geologists going to Mars? Geology for Investors
Growth markets for new fertilizers Industrial Minerals
China is effectively consuming all of the world’s newly mined gold supply GoldSeek
Daniela Desormeaux: Hedge against short-term cycles with lithium Streetwise Reports

How fares Canada in the Fraser Institute’s global mining survey?

February 25th, 2015

by Greg Klein | February 25, 2015

Saskatchewan’s number two worldwide, Quebec’s back in the top 10 and Manitoba climbed 17 notches. But Alberta, Ontario and British Columbia took a beating in the latest Fraser Institute survey of mining jurisdictions. Released February 24, the study rates 122 jurisdictions (including provinces and states in Canada, the United States, Australia and Argentina) based on 485 returned questionnaires. Drawing on their 2014 experience, mining and exploration companies provided numerical ratings for a number of factors, which the institute tracked on separate indexes.

Most important is the Investment Attractiveness Index, which combines two other indexes—Best Practices Mineral Potential (geology) and Policy Perception (government attitudes). The institute weighs the IAI 60% for geology and 40% for public policy, roughly the same consideration companies reported for their investment decisions.

Here’s the top 10 IAI globally, with 2013 rankings in brackets:

1 Finland (4)
2 Saskatchewan (7)
3 Nevada (2)
4 Manitoba (13)
5 Western Australia (1)
6 Quebec (18)
7 Wyoming (11)
8 Newfoundland and Labrador (3)
9 Yukon (8)
10 Alaska (5)

Here are the Canadian runner-ups:

15 Northwest Territories (25)
21 New Brunswick (23)
22 Alberta (10)
23 Ontario (14)
28 British Columbia (16)
29 Nunavut (27)
42 Nova Scotia (47)

Prince Edward Island wasn’t included.

As for the bottom 10:

113 Sudan
114 Nigeria
115 Bulgaria
116 Guatemala
117 Egypt
118 Solomon Islands
119 Honduras
120 Kenya
121 Hungary
122 Malaysia

The 122 jurisdictions totalled 10 more than in 2013. For inclusion, the institute requires a minimum of 10 responses per jurisdiction.

The anonymous replies also included comments which, for Canadian provinces and territories, note serious but unsurprising concerns.

But for some people, the rankings rankled. B.C.’s 10th-place finish out of 12 Canadian jurisdictions doesn’t jibe with the province’s second-place status for mining investment, according to the Association for Mineral Exploration British Columbia. Citing data from Natural Resources Canada, AME BC credited Ontario as Canada’s favourite for attracting investment. Fraser Institute respondents stuck that province with ninth place in Canada.

“Furthermore, one of the best indicators of success in exploration is seeing discoveries move through to mine development,” said AME BC president/CEO Gavin Dirom. “In recent years, we have seen a number of new major metal mines constructed in our province, including Copper Mountain in 2011, New Afton in 2012 and Mount Milligan in 2013. Also, Red Chris is being readied for commercial operations, and the KSM and Kitsault mine development projects have received environmental assessment certificates.”

The NWT and Nunavut Chamber of Mines noted the Northwest Territories’ considerable improvement and its breakaway territory’s slight slump. The organization vowed to continue working with federal and territorial governments “to improve the investment climate for exploration and mining in the two territories.”

Download the Fraser Institute Survey of Mining Companies 2014.

February 25th, 2015

Trading small size and scaling in: Part I Equities Canada
Video: John Kaiser proposes a new system for financing juniors Stockhouse
Geologists going to Mars? Geology for Investors
Growth markets for new fertilizers Industrial Minerals
China is effectively consuming all of the world’s newly mined gold supply GoldSeek
Will the iron ore war cease as big miners tighten their grip? NAI 500
Daniela Desormeaux: Hedge against short-term cycles with lithium Streetwise Reports

Rebuilding consensus

February 24th, 2015

A resource advocate calls for a “national conversation” to define social licence

by Greg Klein

The Fraser Institute released its latest annual mining survey February 24, ranking 122 jurisdictions globally and once again demonstrating that there’s much more to evaluating a region than geology. That reinforces a message that Brian Lee Crowley brought to Vancouver in a series of speeches last month—the real advantage of Canada’s resource riches “is not chiefly due to the resource endowment. What makes that endowment almost uniquely valuable in the world is that it exists within another vastly more important endowment of rules, institutions and behaviours.” But, he maintains, they’re threatened by activists who exploit a fuzzy concept called “social licence” to oppose all development.

A resource advocate calls for a “national conversation” to define social licence

The Fraser Institute study’s principal measurement, the Investment Attractiveness Index, considers both resources and public policy. In fact respondents said they base investment decisions roughly 60% on mineral potential and 40% on policy. Among policy considerations are taxation and royalty structures, legal and regulatory consistency and community involvement.

Crowley, managing director of the Macdonald-Laurier Institute in Ottawa, tells ResourceClips.com the 60/40 split “makes perfect sense to me that there would be something roughly like that breakdown between endowment and local conditions.” But he warns that the unexamined notion of social licence threatens to trump responsible development. He suggests Canada needs a “national conversation” to rebuild a consensus on what responsible development entails.

Social licence can be “either a synonym for cool, calm, intelligent risk and reputation management by government and industry or else a polite term for mob rule,” Crowley’s speech stated. As the term’s often used, however, it’s so vague that “we cannot know what the rules are, when you’re in compliance or when you’ve still got work to do. And hard-line project opponents like that vagueness just fine because it gives them unilateral authority to claim that the need for social licence has not been met.”

Crowley sees mob rule in the example of activists opposed to pipeline expansion in a Vancouver suburb, with “demonstrators throwing themselves under Kinder Morgan’s equipment and trying to blockade their access to Burnaby Mountain to carry out scientific testing required and authorized by the [National Energy Board].”

But it’s not enough to speak out against unfair tactics, Crowley insists. He calls for a “national conversation” in some way similar to the Macdonald Commission.

A resource advocate calls for a “national conversation” to define social licence

Brian Lee Crowley: Rules, institutions and
behaviour mean more than resources.
(Photo: Macdonald-Laurier Institute)

In 1985, after three years of hearings and research, Donald Macdonald released his report for the Royal Commission on the Economic Union and Development Prospects for Canada. Crowley tells ResourceClips.com the report “really built a consensus within Canada about free trade with the United States,” an idea he says this country’s political class strongly opposed. “It was only the result of that non-political national conversation which the Macdonald Commission unlocked that we were able to move national public opinion on that issue.”

Crowley wants a similar process “so we can have a conversation about how legitimate concerns can be addressed and what it means to have social licence … so we get people to buy into a national framework, a set of standards that we can all agree on.”

Then, he says, “the only question we would have to ask for individual projects is, ‘Does this project meet the standards that we all agreed to apply?’”

Of courses skeptics might respond that Canada’s too fragmented for such a consensus. Crowley doesn’t think so, although he says some opponents will remain implacable. “I’m trying to isolate the people for whom there is no standard that could possibly justify resource development,” he explains. “They’re just against it in principle. I don’t think that’s the position of the vast majority of Canadians, who wonder what opportunities are available, what jobs are going to be available for their kids. They’re willing to have a conversation about natural resource development and they want to see things done to a standard that Canadians can be proud of…. If the majority signs on, it doesn’t matter if there’s a disaffected minority.”

Crowley doesn’t dissect the demographics of disaffection. Media coverage of Burnaby’s Kinder Morgan demonstrations suggested participation by a mixed group of suburbanites and veteran activists. But across Canada, the most powerful potential opponents are aboriginal. Some mining companies at last month’s Roundup 2015 discussed ways to avoid possible conflict by involving natives in development. Their efforts might be called a learning process that’s showing some success.

A darker view came from this month’s Northern Prospectors Association AGM in Kirkland Lake. NPA president Gino Chitaroni spoke of “first nation empowerment at the expense of the mining and exploration industry which if unabated … [might] spill off to other business sectors, private landholders, farmers and even municipalities,” according to a report in Ontario’s Northern News. “This is a massive sleeper problem that nobody wants to talk about in the press because those who do may be targeted for reprisals and branded bigots and racists.”

Chitaroni added, “We now have a system of separate permits fees, extortion and kickbacks, and double-dealing under the table being forced onto prospectors, juniors, miners, contractors and suppliers if they want to do business on Crown land and/or with operating mines within certain first nation territories.”

That might help explain Ontario’s performance in the Fraser Institute’s Investment Attractiveness Index, where the province dropped from 14th place in 2013 to 23rd last year. Ontario wasn’t alone in its slide. British Columbia fell to 28th from a 16th-place finish the previous year. Alberta dropped to 22nd from 10th.

But five Canadian jurisdictions made the IAI’s global top 10, compared to four in 2013. Saskatchewan climbed from seventh to second place internationally. And Quebec moved from 18th to sixth place, regaining much of its past glory as a mining jurisdiction.

Download the Fraser Institute Survey of Mining Companies 2014.

Download Brian Lee Crowley’s Who Licenses the Licensors?

Read Canada and the mining world: Resources and expertise keep this country at the forefront, but challenges remain.

February 24th, 2015

Trading small size and scaling in: Part I Equities Canada
Video: John Kaiser proposes a new system for financing juniors Stockhouse
Geologists going to Mars? Geology for Investors
Growth markets for new fertilizers Industrial Minerals
China is effectively consuming all of the world’s newly mined gold supply GoldSeek
Will the iron ore war cease as big miners tighten their grip? NAI 500
Daniela Desormeaux: Hedge against short-term cycles with lithium Streetwise Reports

Roca Mines president/CEO Scott Broughton addresses the seemingly slow pace of progress in aboriginal engagement

February 23rd, 2015

…Read more

February 23rd, 2015

Eric Coffin: A view on the outlook for copper, nickel and zinc Stockhouse
Geologists going to Mars? Geology for Investors
Growth markets for new fertilizers Industrial Minerals
Frank Holmes: Africa could mine its way to prosperity if it addressed instability Equities Canada
China is effectively consuming all of the world’s newly mined gold supply GoldSeek
Will the iron ore war cease as big miners tighten their grip? NAI 500
Daniela Desormeaux: Hedge against short-term cycles with lithium Streetwise Reports

Lakeland Resources expands its Athabasca Basin-region uranium portfolio

February 20th, 2015

by Greg Klein | February 20, 2015

Lakeland Resources expands its Athabasca Basin-region uranium portfolio

Lakeland Resources has grown one of the Athabasca Basin’s largest
uranium exploration portfolios to 32 properties totalling over 300,000 hectares.

 

Now with 32 properties totalling over 300,000 hectares, Lakeland Resources TSXV:LK has enlarged what was already one of Saskatchewan’s largest exploration portfolios. New acquisitions announced February 20 include two land packages in the southeastern Athabasca Basin’s Key Lake area, which gave up over 200 million pounds of uranium by 2002 and still hosts the Key Lake mill.

Lakeland Resources expands its Athabasca Basin-region uranium portfolio

One of the area acquisitions, the KLR property, features “a significant number of historic conductors within basement rock types and at least two unexplained radiometric anomalies,” Lakeland states. Sampling of surface rocks and lake and stream sediment brought results up to 691 ppm uranium. Historic drilling revealed 0.12% U3O8 across 0.1 metres. The new turf complements Lakeland’s existing Key Lake-region properties.

Six new claims sit adjacent to Lakeland holdings in the southwestern Basin’s Carter Lake area. The company also gained ground in the Mathews Lake area, north of Lake Athabasca and within basement rocks of the Beaverlodge Domain.

The Carson Lake property lies beyond the Basin’s northeastern margin but within the Wollaston Domain, which hosts most of the Basin’s currently operating mines.

South of the Basin, along the highly prospective Cable Bay shear zone, Lakeland picked up Black Birch East. Historic work on the 26,389-hectare property “showed a number of electromagnetic conductors and radiometric anomalies roughly coincident with the CBSZ,” the company states.

The acquisitions result from two transactions, subject to TSXV approval. One set of properties costs $40,880 and 1.12 million shares. A set of two other properties calls for $32,636 and 326,350 shares. Both transactions include a 2% NSR, half of which Lakeland may buy back for $2 million per property.

Last month the company began drilling its Star/Gibbon’s Creek project on the Basin’s north-central rim. Other drill-ready projects include Lazy Edward Bay on the Basin’s southern margin and Newnham Lake, east of Star/Gibbon’s.

In December Takara Resources TSXV:TKK took out a 50% option on Lakeland’s Fond du Lac property. Last year’s private placements brought Lakeland over $5.1 million.

Read more about Lakeland Resources’ Star/Gibbon’s Creek project.

Disclaimer: Lakeland Resources Inc is a client of OnPage Media Corp, the publisher of ResourceClips.com. The principals of OnPage Media may hold shares in Lakeland Resources.