Wednesday 13th December 2017

Resource Clips


December, 2015

Planetary Resources president/chief engineer Chris Lewicki foresees a new mining frontier within 10 years

December 23rd, 2015

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‘The Rare Metal Age’

December 23rd, 2015

Our high-tech society doesn’t understand its dependency on critical elements

by Greg Klein

Read this book and you might want to renounce technology to live in a cave—provided it’s equipped with battery rechargers. Author David S. Abraham brings out some of the paradoxes of our dependency on increasingly elusive minerals while explaining the complicated but murky background of interconnected economic, social and geopolitical forces. It might take an event comparable to OPEC’s 1973 oil embargo to jolt Western society out of its ignorance. Abraham tries to protect us from such a rude awakening with The Elements of Power: Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age.

“This book comes at a defining time when rare metals are increasingly critical for high-tech, green and military applications,” he declares. “Yet despite their prevalence, they are not understood.”

Our high-tech society doesn’t understand its dependency on critical elements

By rare metals he means rare earths, tantalum, niobium, lithium, cobalt, graphite and more. Having examined a decade’s worth of reports, he finds “more than half the elements on the periodic table are ‘critical’ to one country or another.”

Resources can be limited and the route from mine-to-market complex. As a case study he presents the electric toothbrush, comprised of roughly 35 metals and relying on “an extensive supply chain: miners like China’s Xiamen Tungsten to supply the metal; a plant in Estonia to process it; and metal traders in New York to provide the alloys to component manufacturers, who sell their wares to the toothbrush manufacturer. It is a web that spans six continents.”

That’s just one example. As the “electronification of everything” coincides with the growing aspirations of emerging economies, “the future of our high-tech goods may lie not in the limitations of our minds, but in our ability to secure the ingredients to produce them…. At no point in human history have we used more elements, in more combinations and in increasingly refined amounts. Our ingenuity will soon outpace our material supplies.”

Our high-tech society doesn’t understand its dependency on critical elements

Hardly limited to consumer luxuries, the metals are essential to uses ranging from green technology to medical instruments to the weapons systems behind a country’s national defence.

Yet sources of production can be frighteningly limited. Some 85% of the world’s niobium comes from Brazil’s Araxa mine, Abraham points out. “Relying on one country and one mine in particular is a risky proposition. A natural disaster, political changes or conflict such as we have seen in Congo can quickly create shortages.”

Then there’s the geopolitical power of countries holding scarce resources. That’s a lesson Japan learned quickly when it challenged China in a territorial dispute, only to lose access to rare earths.

In fact manufacturers from Japan and elsewhere have been relocating their operations to China to ensure supply. One academic tells Abraham that “over the next several decades, every high-tech system—from cars to solar panels—could very well be produced in China.”

Moving to another disturbing topic, Abraham looks at some conflict minerals.

In Colombia, FARC rebels, who have been fighting an insurgency against the government since 1987, produce tungsten from the depths of the Amazon jungle. In Democratic Republic of Congo, anti-government forces and rebel gangs make millions producing tungsten, tin and tantalum. In 2011, about 21% of the world’s tantalum supply came from regions in conflict and almost all of it was processed in China. On the twin Indonesian islands of Bangka and Belitung, bands of small-scale illegal miners dig up more than a third of the world’s tin from jet-black cassiterite minerals, and unknown amounts of other minerals like xenotime and monazite, which hold rare earth elements.

Even Apple notes that it does not have enough information to conclusively determine which country the minerals it uses come from.—David S. Abraham

Where’s that stuff going? Often into products we take for granted. Due to long, baffling supply lines, “a lot of companies have no idea whether or not they’re using conflict minerals,” MetalMiner publisher Lisa Reisman tells Abraham. The author adds, “Even Apple notes that it does not have enough information to conclusively determine which country the minerals it uses come from.”

Abraham tackles other topics as well, including the appalling environmental practices in mining regions like China’s Jiangxi province. Our footprint is there, he says, because “nearly all of your electronics contain specks of metals from those mines.”

Here in the West, our efforts to produce cleaner energy and more energy-efficient machines call for additional metals. “Mining is not antithetical to a green economy; it’s a necessity.”

People who follow resource-related topics will certainly appreciate Abraham’s insights. But other readers might find his book an especial eye-opener. It could make a suitable Christmas gift for any high-tech consumers or green activists who not only disdain mining but deludedly think they abjure the industry.

Unless they live in caves—without battery rechargers—they’re as much a part of the Rare Metal Age as anyone else.

December 23rd, 2015

The five biggest China deals this year NAI 500
Ron Paul: Who needs the Fed? GoldSeek
B.C. mines inspector makes 19 recommendations over collapse of tailings pond Stockhouse
Eric Coffin calls out the Fed’s biggest mistake and what you can do to protect your portfolio Streetwise Reports
Iran is a complicated opportunity for mining, business experts warn Industrial Minerals
Is this just the beginning of the euro crisis? Equities Canada

Dunnedin Ventures CEO Chris Taylor discusses the advantages of the Kahuna diamond project in Nunavut

December 22nd, 2015

…Read more

December 22nd, 2015

The five biggest China deals this year NAI 500
Ron Paul: Who needs the Fed? GoldSeek
B.C. mines inspector makes 19 recommendations over collapse of tailings pond Stockhouse
Eric Coffin calls out the Fed’s biggest mistake and what you can do to protect your portfolio Streetwise Reports
Iran is a complicated opportunity for mining, business experts warn Industrial Minerals
Is this just the beginning of the euro crisis? Equities Canada

Chinese uranium trader signs LOI for $82-million strategic investment with Fission

December 21st, 2015

by Greg Klein | December 21, 2015

While campaigning on behalf of the doomed merger with Denison Mines TSX:DML last July, Fission Uranium TSX:FCU chairperson/CEO Dev Randhawa defended the proposal by saying, “One of the things I run into when I go to Asia is they say I’m too small.” But on December 21 the company announced a letter of intent for an $82.22-million private placement from a Hong Kong-listed uranium trader, CGN Mining Company Ltd. Its controlling shareholder is China Uranium Development Company Ltd, a subsidiary of the energy utility China General Nuclear Power Corp. The deal would leave CGN with 19.99% of Fission.

Chinese uranium trader signs LOI for $82-million strategic investment with Fission

The $82-million deal would give a Chinese
company nearly 20% of the Triple R deposit.

Randhawa called it “the first time a Chinese company has invested directly in a Canadian uranium company.” The parties also pledged to work towards an offtake agreement.

They hope to close by January 29. Among the requirements are approvals from the TSX, CGN shareholders, the Hong Kong exchange and the Chinese government. Should either party back out or CGN fail to win approvals by February 29, a $3-million break fee takes effect.

CGN would nominate two directors to Fission’s board, which would grow from seven to nine members.

Last June the Canadian government approved Australia-headquartered Paladin Energy’s (TSX:PDN) ownership of the proposed Michelin mine in Labrador, relaxing a 1987 policy that requires at least 51% Canadian ownership of uranium mines. The policy doesn’t apply to exploration and development projects.

Fission’s Patterson Lake South project, just outside Saskatchewan’s Athabasca Basin, reached PEA in September with numbers that the company said makes its Triple R deposit potentially one of the world’s lowest-cost uranium producers. Last week the company fended off dissident shareholders to elect its management slate to the board.

Fission’s next-door neighbour hasn’t done badly in financing either. Last month NexGen Energy TSXV:NXE announced a $20-million bought deal, which followed a $23.74-million private placement that closed in May. The Arrow zone of the company’s Rook 1 project has its maiden resource scheduled for H1 2016.

December 21st, 2015

Ron Paul: Who needs the Fed? GoldSeek
B.C. mines inspector makes 19 recommendations over collapse of tailings pond Stockhouse
Eric Coffin calls out the Fed’s biggest mistake and what you can do to protect your portfolio Streetwise Reports
Iran is a complicated opportunity for mining, business experts warn Industrial Minerals
Is this just the beginning of the euro crisis? Equities Canada
Commodity faithful see some hope next year after 2015 heartbreak NAI 500

Visual Capitalist: Junk bonds finally capitulate to lower oil price environment

December 18th, 2015

by Jeff Desjardins | posted with permission of Visual Capitalist | December 18, 2015

Junk bonds finally capitulate to lower oil price environment

The Chart of the Week is a Friday feature from Visual Capitalist.

 

Over the month of December, the market for high-yield bonds (also known as junk bonds) had a mini-meltdown that’s raised some eyebrows.

Junk bonds, which are non-investment grade debt instruments that are issued by companies with poor credit ratings, are both high-risk and high-reward. If the companies don’t default on their payments, the bonds pay a nice premium to the investor. In fact, the risk and return on junk bonds is generally comparable with that of stocks.

However, sometimes these companies can and will default on their debt obligations, and here’s where the risk comes in. This time, it is the energy sector that is the culprit.

When low oil prices hit last year, many fringe oil and gas producers believed that it would be possible to wait out the market for better prices. Some of these companies even issued risky junk bonds to raise capital to sustain operations until better times.

The recent action in oil and commodity markets has made it clear that oil prices could be low for a long time. Now these fringe shale producers that have been holding on for better times may get a different type of medicine.

Standard & Poor’s recently warned that a stunning 50% of energy junk bonds are “distressed,” meaning they are at risk of default. That’s about a total of $180 billion distressed debt, which is the highest level since the financial crisis.

Investors began pulling money out of the credit markets fast. Last week, investors pulled a record $5.1 billion out of mutual funds and ETFs investing in junk bonds. Investment-grade bond and junk bond yields are now at their highest since 2012.

On top of that, several funds announced they would be locking out investors from withdrawing their funds. Third Avenue has blocked investors from retrieving money from its credit fund, Stone Lion suspended redemptions in its credit hedge funds and Lucidus Capital Partners liquidated its holdings to try to get money back to investors.

What does this mean for ordinary investors?

Jeffrey Gundlach, the “Bond King,” talked about this in his latest presentation for DoubleLine Capital:

I’m sure many people on the call have never seen the Fed raise rates. And I’ve got a simple message for you: It’s a different world when the Fed is raising interest rates. Everybody needs to unwind trades at the same time, and it is a completely different environment for the market.

In 2016 we will be sailing into some uncharted territory.

Posted with permission of Visual Capitalist.

Jaff Napoleon Bamenjo of the Civil Society Coalition opposes the United Arab Emirates taking on the Kimberley Process chair position

December 18th, 2015

…Read more

December 18th, 2015

B.C. mines inspector makes 19 recommendations over collapse of tailings pond Stockhouse
Eric Coffin calls out the Fed’s biggest mistake and what you can do to protect your portfolio Streetwise Reports
Iran is a complicated opportunity for mining, business experts warn Industrial Minerals
Is this just the beginning of the euro crisis? Equities Canada
John Mauldin interviews George Friedman GoldSeek
Commodity faithful see some hope next year after 2015 heartbreak NAI 500