Monday 18th December 2017

Resource Clips


September, 2015

Kimberley Process indicted

September 30th, 2015

Tougher measures needed to end conflict diamond trade, says Amnesty International

by Greg Klein

One of the advantages Canadian diamonds bring to the market is their certifiably ethical character. Ensured by a tiny laser inscription on each stone and a verifiable record of its movements from kimberlite to consumer, the gems distinguish themselves for a quality apart from their beauty. The Kimberley Process was supposed to do the same for diamonds from all countries by banning the trade of conflict stones. Instead it simply “camouflages” the problem, according to Amnesty International.

“This is a wake-up call for the diamond sector,” the group stated on releasing a September 30 report focusing on the Central African Republic. “States and companies can no longer use the Kimberley Process as a fig leaf to reassure consumers that their diamonds are ethically sourced.”

Tougher measures needed to end conflict diamond trade, says Amnesty International

Amnesty castigates the organization, which describes itself as an initiative of governments, industry and civil society “to stem the flow of conflict diamonds—rough diamonds used by rebel movements to finance wars against legitimate governments.” Its membership consists of 81 countries, with the EU counting as a single state. But failures by both countries and companies mean consumers might unwittingly buy diamonds “associated with conflict and abuses,” the report states. “Despite more than a decade of the Kimberley Process, diamond supply chains are characterized by opaqueness, abuse and unjust enrichment.”

Amnesty’s report comes as the KP reconsiders its ban on CAR diamonds.

Those stones have long provided a major source of revenue to the CAR, one of the world’s poorest countries. In 2010 roughly 80,000 to 100,000 workers relied on artisanal diamond mining for their employment. Rough exports under the KP brought in US$60.8 million in 2011 and $62.1 million the following year, producing about half the country’s exports. Global rankings placed the CAR 12th by value and 14th by volume up to 2013.

But in March of that year, Muslim rebels known as Selekas overthrew the government. Reprisals by Christian and animist Anti-Balaka militias followed, along with atrocities on both sides. Over 5,000 people died. Diamonds, mined by artisanal workers in small operations, helped fund both groups. In May 2013 the KP banned its members from importing CAR diamonds.

The multi-million-dollar production and trade of CAR conflict stones persisted, however. Already rife, smuggling increased. Export companies located in the CAR continued buying the gems, which they stockpiled while waiting for the KP to end the ban.

Thanks to foreign peacekeepers, a transitional government took office in January 2014 and now holds a degree of control over parts of the country. A presidential election is scheduled for October 18. Not surprisingly, the country wants to regain revenue from its largest export.

In July of this year, the KP said it would allow exports provided certain circumstances were met. Seeing no indication they can be met, Amnesty fears the KP will lift the ban nevertheless.

The KP would require that diamonds come from “compliant zones” free of effective rebel activity. The organization would also allow stockpiles to be exported, provided they stand up to a forensic audit. Amnesty maintains neither condition’s plausible.

Control over compliant zones is tenuous, the group states. One zone considered potentially compliant by the KP actually suffers from significant rebel activity. Peace, where it exists, is fragile. Just days before the report’s release, the worst outbreak of violence in a year hit the CAR’s capital of Bangui, home to most export companies. By September 30, media reports said the death toll reached at least 42.

Meanwhile diamonds from rebel-controlled zones have been mixed with compliant output. No one can realistically verify the stockpiles’ sources. And unless buyers can find a way to verify that, their stockpiles should be confiscated and sold, with the money being spent for the good of the people, Amnesty argues.

Nor does the KP effectively address smuggling. Amnesty’s report takes the major sorting and distribution centres of Antwerp and Dubai to task for taking advantage of what it calls the limitations and weaknesses of the KP. The Antwerp World Diamond Centre quickly shot back, criticizing Amnesty for “factual errors.” The centre insisted it “implements a 100% strict control mechanism for each import or export of diamonds, which led to the interception and seizure of two shipments, containing rough diamonds potentially originating from CAR.”

Amnesty also charges that the UAE government “may be complicit in the illicit flow of wealth out of Africa.”

Despite more than a decade of the Kimberley Process, diamond supply chains are characterized by opaqueness, abuse and unjust enrichment.—Amnesty International

The report sees human rights abuses in other aspects of the trade as well. Sharp practice, extortion and outright theft deprive miners of reasonable remuneration. Tax evasion deprives the government of money that could alleviate poverty. Mining itself involves heavy, unnecessarily dangerous work—and often child labour. The KP doesn’t consider such problems, labelling conflict diamonds simply as “diamonds used by rebel movements or their allies to finance conflict aimed at undermining legitimate governments.” That also exempts diamonds that finance abusive government forces, Amnesty states.

Meanwhile the KP holds countries, not the companies themselves, responsible for ensuring ethical sources.

Amnesty’s report complements the work of other NGOs scrutinizing conflict minerals. But its scathing indictment of the Kimberley Process casts a shadow on much of the world’s diamond trade. In an announcement accompanying the report, the group calls not only on governments but companies like De Beers and Signet to push for wide-ranging reform. In addition, “diamond companies should be investigating their supply chains for human rights abuses, conflict and other illegal or unethical practices, and disclosing the steps taken.”

Next March responsible sourcing will be the featured topic at the Jewelry Industry Summit, a three-day international event preceding the JA New York trade show.

Download the Amnesty International report Chains of abuse: The case of diamonds from the Central African Republic and the global diamond supply chain.

Geeks, diggers, geos and techies flock to Val-d’Or with Integra’s online gold rush

September 30th, 2015

by Greg Klein | September 30, 2015

Over 740 virtual prospectors from 65 countries have joined a search for Quebec gold, but from the comfort of their homes and offices. That was the tally by September 30, when Integra Gold TSXV:ICG announced the six Gold Rush Challenge judges who’ll assess submissions for a potential deposit on the company’s Abitibi region properties. The winner of the online exploration contest gets $500,000, while runners-up will share another half-million.

Geeks, diggers, geos and techies flock to Val-d’Or with Integra’s online gold rush

Integra acquired the Sigma/Lamaque mines and mill
adjacent to the company’s Lamaque South project last year.

Not limited to professionals, the contest grants competitors access to 25 gigabytes of data derived from a six-terabyte library representing 75 years of mining and exploration from Integra’s past-producing Sigma/Lamaque mines.

Sigma produced 4.45 million gold ounces from 1937 to 1997. Lamaque gave up another 4.58 million ounces between 1935 and 1985.

Saying he expects “a plethora of innovative and creative ideas from within and outside of the geoscientific community,” Integra president/CEO Stephen de Jong added, “We are convinced that the very best idea for the next discovery in the Sigma/Lamaque area is still in the hands of a researcher somewhere in the world.”

A “phenomenal team of world-renowned judges” consists of Neil Adshead, a geologist and investment strategist at Sprott Asset Management, Andrew Brown, western Africa chief geologist for B2Gold TSX:BTO, Benoit Dubé, senior research scientist with the Geological Survey of Canada, James Franklin, a retired chief scientist with the GSC, David Rhys, consulting geologist with Panterra Geoservices and Brian Skanderberg, a geologist and president/CEO of Claude Resources TSX:CRJ.

They’ll assess 20 semi-finalists chosen by WSP Group, Integra’s geoscience partner for the contest. Five finalists will present their findings to the judges and a panel of industry veterans at what the company calls a “Shark-Tank-style” charity event at PDAC next March.

Sign up for the contest here. December 1’s the deadline for submissions.

September 30th, 2015

When stock traders become market cheerleaders Equities Canada
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Terse exchanges at Critical Raw Materials meeting as mineral industry bemoans regulation cost Industrial Minerals
Following Fed decision, confidence in gold as a safe-haven asset returns GoldSeek
Thomas Drolet warns of a coming Grand Canyon of uranium supply deficit and suggests three ways to profit by it Streetwise Reports
Mid-sized miners seen as focus of next deals amid low prices NAI 500

Ontario Mining Association president Chris Hodgson comments on Canadian Ecology Centre mining tours for teachers

September 29th, 2015

…Read more

Updated: ALX Uranium begins Kelic Lake drilling, announces new structure

September 29th, 2015

by Greg Klein | September 29, 2015

ALX Uranium begins Kelic Lake drilling, announces new structure

With one of the Athabasca Basin’s largest portfolios, ALX Uranium
has a number of drill-ready projects vying for flagship status.

 

Having just begun trading four days earlier, ALX Uranium Corp TSXV:AL announced a new drill program already underway on September 29. A result of the recent combination of Lakeland Resources and Alpha Exploration, ALX plans up to six holes totalling 1,800 metres on Kelic Lake, a 10,056-hectare property straddling the Athabasca Basin’s south-central rim. The project is one of a number of drill-ready properties the company holds in one of the Basin’s largest portfolios.

ALX Uranium begins Kelic Lake drilling, announces new structure

Kelic Lake’s target area sits one kilometre east of a radioactive spring and features a conductor identified by an airborne V-TEM survey coinciding with other conductors found through ground-based fixed loop and TEM surveys. The area also includes a gravity low, a north-trending magnetic gradient of regional extent and elevated radon readings.

Athabasca sandstone of about 100 metres’ depth allows for shallow drilling. Work is expected to last about three weeks. ALX holds a 100% option on the project.

One day previously the company announced its new management and board structure. From Lakeland, Jonathan Armes continues as president/CEO/director, with Jody Dahrouge and Steven Khan staying on as directors. Alpha’s Michael Gunning takes the role of executive chairperson while Warren Stanyer and Benjamin Ainsworth also take board positions. Alpha’s Sierd Eriks remains as VP of exploration and Charles Roy as technical adviser.

The company has also struck committees for audit, compensation and corporate governance, and allocated 3.72 million incentive options exercisable at $0.10 for 10 years.

Other drill-ready projects in the ALX portfolio include the 100%-held Carter Lake and Hook Lake properties, which feature around 15 kilometres of untested corridors on strike with the Patterson Lake South, Arrow and Spitfire discoveries. Also vying for flagship status are the 100%-held Gibbon’s Creek, Newnham Lake and Lazy Edward Bay, a 60% stake in the Carpenter Lake joint venture and an 80% share of the Gorilla JV.

Read more about the Lakeland/Alpha combination and ALX Uranium.

September 29th, 2015

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Lithium: Commodity overview Geology for Investors
Terse exchanges at Critical Raw Materials meeting as mineral industry bemoans regulation cost Industrial Minerals
Following Fed decision, confidence in gold as a safe-haven asset returns GoldSeek
Thomas Drolet warns of a coming Grand Canyon of uranium supply deficit and suggests three ways to profit by it Streetwise Reports
Mid-sized miners seen as focus of next deals amid low prices NAI 500
Flinders CEO Blair Way: What Tesla needs to know about the graphite sector Equities Canada

ALX Uranium plans fall drilling at Kelic Lake, announces new structure

September 28th, 2015

This story has been updated and moved here.

Western Potash gets environmental approval for Milestone, elects chairperson

September 28th, 2015

by Greg Klein | September 28, 2015

Western Potash’s (TSX:WPX) revamped Milestone project has received Saskatchewan environmental assessment approval, the company reported September 28. Approval originally came through in April 2013 for what was then envisioned as a much larger operation. In early July Western announced a preliminary economic assessment for an upwardly scalable project using selective mining. The new plan slashes capex to $80.6 million.

Western Potash gets environmental approval for Milestone, elects chairperson

The new methodology and design then underwent provincial review, with Saskatchewan’s Ministry of Environment concluding the proposal wouldn’t bring impacts significantly different from those identified in the original plan.

Milestone’s funding closed in mid-September with an $80-million investment from Beijing Tairui Innovation Capital Management and $720,245 from CBC (Canada) Holding Corp.

Western also announced the election of Tairui nominee Chang Xiaogang as chairperson. Holding a master’s degree in business administration from Tsinghua University School of Economics and Management, Chang has served as president/chairperson of Shanxi Top Energy Company, deputy chairperson of Shanxi Securities, deputy chairperson of Shanxi Zhangze Power Company and chairperson/president of Shanxi International Power Group. Chang also served as a full-time independent director of China’s state-owned Assets Supervision and Administration Commission.

“Mr. Chang and Tairui bring a wealth of relevant experience that will help guide Western as the company begins the transition to project construction,” commented CEO Patricio Varas.

September 28th, 2015

Lithium: Commodity overview Geology for Investors
Nasdaq opening centre for private startups Stockhouse
Terse exchanges at Critical Raw Materials meeting as mineral industry bemoans regulation cost Industrial Minerals
Following Fed decision, confidence in gold as a safe-haven asset returns GoldSeek
Thomas Drolet warns of a coming Grand Canyon of uranium supply deficit and suggests three ways to profit by it Streetwise Reports
Mid-sized miners seen as focus of next deals amid low prices NAI 500
Flinders CEO Blair Way: What Tesla needs to know about the graphite sector Equities Canada

Unrestrained Renard

September 25th, 2015

Stornoway expands resources while building Quebec’s first diamond mine

by Greg Klein

Stornoway expands resources while building Quebec’s first diamond mine

Financed through to completion, Renard’s
construction continues on schedule.

With Renard on schedule for H2 2016 commissioning and Q2 2017 production, Quebec’s first such mine will make Stornoway Diamond TSX:SWY the world’s sixth-largest company producing the gems. Yet Stornoway’s ambitions continue to grow along with its resources, which got an estimate upgrade on September 24. Now the company’s emboldened to schedule a mine plan update for Q2 next year, even though mine construction has already reached the mid-way point.

Among the resource highlights is a 15.6% boost to the indicated category for Renard 2, despite a 16.4% drop in grade. One of the project’s seven resource-rich kimberlites, Renard 2’s inferred category now extends to 850 metres in depth. Overall, the project’s indicated category grows 11.4%, while the upgrades subtract 20.8% from inferred resources.

Indicated totals for Renard kimberlites 2, 3, 4 and 65 show:

  • 42.63 million tonnes averaging 71 carats per hundred tonnes for 30.17 million carats

The indicated resource includes a probable reserve showing:

  • 23.78 million tonnes averaging 75.5 cpht for 17.95 million carats

Of that, the company considers 1.91 million carats open-pittable, with the other 16.03 million requiring underground extraction.

The inferred category for those four kimberlites plus Renard 9, Hibou and Lynx totals:

  • 24.49 million tonnes averaging 54 cpht for 13.35 million carats

Stornoway sees “substantial new exploration potential” for the adjacent Renard 2 and 3 pipes down to 1,250 metres in depth.

“Renard 2 at 600 metres’ depth is moderately smaller in cross-section than we had previously estimated,” conceded president/CEO Matt Manson. But “it is continuing downwards to a depth and on a scale that makes it unique amongst Canadian kimberlites. In a development that is particularly exciting, we now see the potential to mine the high-grade Renard 3 kimberlite deeper than we had previously thought possible, following its re-discovery during the drilling at 1,000 metres’ depth, 500 metres below the previous drill intersection.”

[Renard 2] is continuing downwards to a depth and on a scale that makes it unique amongst Canadian kimberlites.—Matt Manson, president/CEO
of Stornoway Diamond

From Renard 2’s first 200 metres, meanwhile, the indicated category gains 900,000 carats. Contained in 4.28 million tonnes of country rock breccia, that accounts for the category’s 16.4% grade reduction. Even so, it has Stornoway wondering about additional potential for the open pit as well as the underground operations.

But until a reserve update comes along, the lifespan remains 11 years. A March 2014 assessment forecast 1.6 million carats per year fetching an average $190 a carat. Last year’s global production, by comparison, was 142 million carats according to De Beers. The Kimberley Process Certification Scheme says last year’s global price averaged $116.17.

Conclusive confidence in the project came with last year’s $946-million financing from Orion Mine Finance, la Caisse de dépôt et placement du Québec and Ressources Québec, an investment and financing agency that’s a subsidiary of the province’s Investissement Québec.

Quebec’s participation in Renard goes back to 1996 when SOQUEM Inc, now a branch of Ressources Québec, helped back early exploration that led to the first kimberlite discovery in 2001. Investissement Québec remains Stornoway’s largest shareholder with a 22.7% stake on a diluted basis, above Orion (17.5%) and la Caisse (6.2%). The province likes to consider itself an investor, not a subsidizer, of mining.

Canada’s other diamond development project, however, surpasses Renard with an expected average of 4.5 million carats annually for 12 years. A De Beers/Mountain Province Diamonds TSX:MPV joint venture, Gahcho Kué has production scheduled for Q3 2016 in the Northwest Territories. Other large-scale diamond development projects include ALROSA’s Verkhne Munskoe mine, scheduled for 2018 production in Siberia, and Rio Tinto’s (NYE:RIO) Bunder project, slated for 2017 production in India.