Thursday 18th October 2018

Resource Clips


December, 2017

Copper crusader

December 29th, 2017

Gianni Kovacevic sees even greater price potential for the conductive commodity

by Greg Klein

Evangelist he may be, but Gianni Kovacevic’s hardly a voice crying in the wilderness. His favourite metal displayed stellar performance last year, reaching more peaks than valleys as it climbed from about $2.50 to nearly $3.30 a pound. But Kovacevic believes copper has a long way to go yet. That will be a function of necessity as the metal shows “the strongest demand growth of any of the major commodities.” Especially persuasive in his optimism, Kovacevic brings his message to the 2018 Vancouver Resource Investment Conference on January 21 and 22.

Gianni Kovacevic sees even greater price potential for the conductive commodity

Increasing copper demand will unlock
lower-grade resources, says Kovacevic.

As a researcher, commentator and investor who’s also the CEO/chairperson of CopperBank Resources CSE:CBK, co-founder of CO2 Master Solutions Partnership and author of My Electrician Drives a Porsche, he brings new approaches that link topics of energy demand, commodity supply and environmental stewardship.

Kovacevic sees a new paradigm driving copper’s future. “The invisible hand in commodities during the last cycle was China,” he says. “Its economic growth just came out of nowhere. This time the invisible hand is this pervasive use of copper in everything that’s electrified. That means even the smallest village in Africa, which per capita has negligible copper consumption, is becoming a line item. When you create, transfer and utilize greener and cleaner energy, it takes more copper by a power of magnitude. For example to establish a megawatt of windpower it takes five times more copper than it does a megawatt of conventional thermal-generated energy.”

Then there’s the battery-powered revolution and the attention it’s brought to lithium, cobalt and graphite. Saying “I like anything in electric metals,” Kovacevic stresses the importance of nickel as well. Still, “copper wins because the interconnectivity will always be copper and copper plays a role in each battery as well.”

That leads to a supply problem that can have only one solution. “I believe we’re going to have to make uneconomic deposits economic. And there’s only one way to do that—with a higher copper price.”

With no foreseeable hope of a copper mining “renaissance” comparable to the effect that fracking brought to oil and gas, the metal will simply require more money. “We’ve got the old legacy mines,” Kovacevic points out. “We’ve spent a lot of money on exploration in the last cycle and didn’t find a lot. What we do have is lower-grade resources. They are simply not economic at a low copper price.”

Gianni Kovacevic sees even greater price potential for the conductive commodity

Kovacevic: Electrical generation, storage and
connectivity put copper at the top of energy metals.

Apart from diminishing grades, the business of putting new mines into operation is “taking longer with water, electricity and permitting issues, and it’s getting into funkier places,” he continues. “The Elliott Wave [technical/fundamental analysis] on copper is $7.50 a pound. I find that very interesting. All the buy-out action in the copper space happened for the most part between 2006 and 2012. The mean price for copper during that time was about $3.50 a pound. The all-time high was about $4.50 for a short while, but the mean was $3.50.”

Copper’s 2017 performance makes that figure look viable again. Kovacevic, however, cites analysis from BHP Billiton NYSE:BHP stating that 75% of future projects will require more than $3.50. “Could we see a scenario in which the copper price goes past the old all-time high and stays there for a while? And will the buy-outs in the next wave, if they occur, be higher on average than those in the previous 2006-to-2012 cycle? I believe the answer will be yes. But if you look at the average grade that went through the top 15 copper producers’ mills in 2010, it was 1.2% copper. In 2016 it was 0.72% copper. So if you were mining 30 million tonnes a year, now you have to mine 40 or 45 million tonnes for the same metal yield. And without higher copper prices, that doesn’t make much of a business case.

“So the first question is, are we going to need more copper in the next five, 10, 15 years? The answer in my opinion is yes. In fact it has the strongest demand growth of any of the major commodities. And where will that copper come from? Well, it’s going to come from a mix of places but we’ll have to make these projects economic. That should bode well for people who have invested in the copper junior space.”

Addressing the topic of how investors might look at the energy revolution in 2018 and beyond, Kovacevic speaks at the 2018 Vancouver Resource Investment Conference, to be held at the Vancouver Convention Centre West from January 21 to 22. Click here for more details and free registration.

December 29th, 2017

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Jayant Bhandari dumps on democracy and the Third World, praises colonialism and east Asia, discusses investment strategies SmallCapPower
Eric Sprott discusses the gold market GoldSeek
Another uranium company to slash production in 2018 Streetwise Reports
Rise of the lithium-ion battery megafactories: What does 2018 hold? Benchmark Mineral Intelligence
Q2 energy metals earnings review—crunch time for the lithium majors The Disruptive Discoveries Journal

December 28th, 2017

Can producers push through titanium dioxide price hikes in 2018? Industrial Minerals
20 positive trends to make you feel good about 2018 Equities.com
Coming housing boom could mean it’s time to add raw materials Stockhouse
Magmatic arc hydrothermal systems: An introduction Geology for Investors
Jayant Bhandari dumps on democracy and the Third World, praises colonialism and east Asia, discusses investment strategies SmallCapPower
Eric Sprott discusses the gold market GoldSeek
Another uranium company to slash production in 2018 Streetwise Reports
Rise of the lithium-ion battery megafactories: What does 2018 hold? Benchmark Mineral Intelligence
Q2 energy metals earnings review—crunch time for the lithium majors The Disruptive Discoveries Journal

Matthew Vickery writes about a Bavarian city built with local stone bearing millions of tiny asteroid-created diamonds

December 27th, 2017

…Read more

The missing diamonds, the homeless hero and a media-spun Christmas fable

December 27th, 2017

by Greg Klein | December 27, 2017

This small Vancouver Island city’s best known for its eponymous Nanaimo bars, known to Canadians not as biker-infested boozers but an exquisitely sweet confection believed to have originated with 19th-century Scottish coal mining families. Just in time for Christmas, some media turned the local tale of a missing diamond ring into a concoction just as rich.

Missing diamonds, a homeless hero and a media-spun Christmas fable

An overly sweet Nanaimo concoction.
(Photo: Tourism Nanaimo)

An out-of-town visitor lost the ring, which was sitting in her change purse, when she accidentally scooped it up with some money that she offered a street guy. On realizing what happened, she made a public appeal for the ring’s return, emphasizing that the guy received it purely by accident. The Nanaimo News Bulletin reported that in a straightforward December 16 story.

On December 18 in downtown Nanaimo I was approached by a stranger who I later recognized from media photos as the guy who eventually found the ring’s recipient, obtained the missing item and returned it to the owner. The stranger asked me to make a phone call for him. I replied that I don’t have a cell phone. Nevertheless he tagged along with me, talking semi-coherently about a missing diamond ring and a TV reporter named Skye. At one point he blurted out that he’d been “clean for a day.”

I asked him if he knew the ring’s whereabouts. He shouted, “I do now!” Referring to the News Bulletin story, I said the owner asked that it be turned in to the Salvation Army. He replied, “OH YEAH?” and suddenly ran off.

The Sally Ann was a block and a half in another direction.

Later that day he met up with CHEK TV and the ring’s owner. Maybe he was surprised by the fruits of his televised altruism.

They included a “generous cash reward” from the owner, followed by other gifts that poured in after CHEK broadcast its emotively condescending account. A CHEK follow-up report encouraged more donations to be dropped off at a downtown business.

Then Canadian Press took up the story, which was relayed in a dozen or more media in Canada and internationally.

But between the CHEK broadcast and the nearly viral CP account, the News Bulletin ran another story, again avoiding emotionalism. In its straightforward manner the paper also noted that two of the ring’s diamonds “had apparently been pried from their settings and were missing.”

That detail wasn’t mentioned by the CHEK reporter who witnessed the ring’s return. CP euphemistically referred to the missing stones as “some damage to the jewelry.”

Not to worry, a jeweller—an unnamed jeweller who contacted the owner directly, not through the media—has offered to replace the gems and repair the ring for free.

For all that, the owner’s goodwill knows no bounds. She wants to track down the ring’s earlier recipient to give him a cash reward too. She spent Christmas Eve handing out money to street people and started a GoFundMe campaign to help the ring returner move out of his friend’s place and into a home of his own—“and maybe even get him a puppy to love.”

December 27th, 2017

Can producers push through titanium dioxide price hikes in 2018? Industrial Minerals
20 positive trends to make you feel good about 2018 Equities.com
Coming housing boom could mean it’s time to add raw materials Stockhouse
Magmatic arc hydrothermal systems: An introduction Geology for Investors
Jayant Bhandari dumps on democracy and the Third World, praises colonialism and east Asia, discusses investment strategies SmallCapPower
Eric Sprott discusses the gold market GoldSeek
Another uranium company to slash production in 2018 Streetwise Reports
Rise of the lithium-ion battery megafactories: What does 2018 hold? Benchmark Mineral Intelligence
Q2 energy metals earnings review—crunch time for the lithium majors The Disruptive Discoveries Journal

America’s long-overdue critical minerals strategy heralds wide-ranging advantages, says Jeff Green

December 22nd, 2017

by Greg Klein | December 22, 2017

A long-time advocate of national self-reliance on critical minerals, the Washington defence lobbyist and former USAF commander calls it the United States’ “most substantive development in critical mineral policy in 20 years.” As President Donald Trump ordered a national strategy to reduce the country’s dependence on unfriendly or unstable sources of crucial commodities, Jeff Green responded: “I don’t think you can overstate the importance of the executive order because the U.S. government has fundamentally shifted its minerals policy, which impacts natural resource policy, national security and the economy.” Speaking with ResourceClips.com, he outlined five major outcomes that he foresees.

America’s critical minerals strategy was long overdue and will show wide-ranging effects, says Jeff Green

“One, I think you will see regulatory streamlining in the very near future and I think that’s really important for permitting and opening mines in the United States.”

Just six days before Trump’s announcement, Green published an op-ed arguing that unwieldly permitting procedures affected national security.

“Two, with the fundamental shift in policy and the easing of regulatory burdens, I hope to see companies get increased access to capital markets and private sector investment,” he added.

“Three, this is a formalization of the nexus between national security and critical minerals, and that is something that the last administration refused to do. When you look at the rare earths crisis, the prior administration said there was no problem. This administration has said that critical minerals are fundamental to national security, and that’s very important.

“Four, I think this will lead to investment by the Department of Defense in critical minerals, largely because they have the funding to do this and they can best pinpoint where those areas of investment need to be.

“Five, I think you’ll potentially see the U.S. bring additional anti-dumping actions, particularly against the Chinese, for dumping minerals into our market below value.”

I do think that the direct actions from the executive order will largely benefit U.S. companies. But I also see efforts to collaborate on access to materials with companies that can provide it.—Jeff Green

Of course the U.S. national strategy primarily affects the U.S. “President Trump has said ‘America first,’ and to our friends in Canada that might be a little disappointing,” Green pointed out. “But he has also said that international co-operation and partnerships with our strongest allies will be really important. I do think that the direct actions from the executive order will largely benefit U.S. companies. But I also see efforts to collaborate on access to materials with companies that can provide it. I think pragmatically the administration is going to say, ‘If you’ve got a tantalum project in Canada that’s more advanced than anything we have in the U.S., we ought to work with you to bring that supply to market, rather than continue to rely on some other countries.”

Meanwhile the proposed Metals Act, a bill calling for U.S. government support to develop domestic resources and supply lines, has been languishing in multiple committees. But “many of the principles in the act worked their way into the executive order,” Green said.

“The president’s action marks the culmination of almost a decade of work by many of us who’ve been advocating for more access to critical minerals,” he added. “There’s been tremendous effort by people in the industry to get to this point and the hope is that regulatory streamlining and everything go quickly so we can see positive results.”

Pleased as he was, Green wasn’t surprised. “There was word here in Washington D.C. that this was coming, so it was a nice early Christmas gift.”

Read more about the U.S. federal strategy on critical minerals.

December 22nd, 2017

Can producers push through titanium dioxide price hikes in 2018? Industrial Minerals
20 positive trends to make you feel good about 2018 Equities.com
Coming housing boom could mean it’s time to add raw materials Stockhouse
Magmatic arc hydrothermal systems: An introduction Geology for Investors
Jayant Bhandari dumps on democracy and the Third World, praises colonialism and east Asia, discusses investment strategies SmallCapPower
Eric Sprott discusses the gold market GoldSeek
Another uranium company to slash production in 2018 Streetwise Reports
Rise of the lithium-ion battery megafactories: What does 2018 hold? Benchmark Mineral Intelligence
Q2 energy metals earnings review—crunch time for the lithium majors The Disruptive Discoveries Journal

Zimtu’s Dave Hodge reminds companies to maintain European market requirements by obtaining a Legal Entity Identifier

December 21st, 2017

…Read more

Critical attention

December 21st, 2017

The U.S. embarks on a national strategy of greater self-reliance for critical minerals

by Greg Klein

A geopolitical absurdity on par with some aspects of Dr. Strangelove and Catch 22 can’t be reduced simply through an executive order from the U.S. president. But an executive order from the U.S. president doesn’t hurt. On December 20 Donald Trump called for a “federal strategy to ensure secure and reliable supplies of critical minerals.” The move came one day after the U.S. Geological Survey released the first comprehensive update on the subject since 1973, taking a thorough look—nearly 900-pages thorough—at commodities vital to our neighbour’s, and ultimately the West’s, well-being.

U.S. president Trump calls for a national strategy to reduce foreign dependence on critical minerals

The U.S. 5th Security Forces Squadron takes part in a
September exercise at Minot Air Force Base, North Dakota.
(Photo: Senior Airman J.T. Armstrong/U.S. Air Force)

The study, Critical Mineral Resources of the United States, details 23 commodities deemed crucial due to their possibility of supply disruption with serious consequences. Many of them come primarily from China. Others originate in unstable countries or countries with a dangerous near-monopoly. For several minerals, the U.S. imports its entire supply.

They’re necessary for medicine, clean energy, transportation and electronics but maybe most worrisome, for national security. That last point prompted comments from U.S. Secretary of the Interior Ryan Zinke, whose jurisdiction includes the USGS. He formerly spent 23 years as a U.S. Navy SEAL officer.

“I commend the team of scientists at USGS for the extensive work put into the report, but the findings are shocking,” he stated. “The fact that previous administrations allowed the United States to become reliant on foreign nations, including our competitors and adversaries, for minerals that are so strategically important to our security and economy is deeply troubling. As both a former military commander and geologist, I know the very real national security risk of relying on foreign nations for what the military needs to keep our soldiers and our homeland safe.”

Trump acknowledged a number of domestic roadblocks to production “despite the presence of significant deposits of some of these minerals across the United States.” Among the challenges, he lists “a lack of comprehensive, machine-readable data concerning topographical, geological and geophysical surveys; permitting delays; and the potential for protracted litigation regarding permits that are issued.”

[Trump’s order also calls for] options for accessing and developing critical minerals through investment and trade with our allies and partners.

Trump ordered a national strategy to be outlined within six months. Topics will include recycling and reprocessing critical minerals, finding alternatives, making improved geoscientific data available to the private sector, providing greater land access to potential resources, streamlining reviews and, not to leave out America’s friends, “options for accessing and developing critical minerals through investment and trade with our allies and partners.”

Apart from economic benefits, such measures would “enhance the technological superiority and readiness of our armed forces, which are among the nation’s most significant consumers of critical minerals.”

In fact the USGS report finds several significant uses for most of the periodic table’s 92 naturally occurring elements. A single computer chip requires well over half of the table. Industrialization, technological progress and rising standards of living have helped bring about an all-time high in minerals demand that’s expected to keep increasing, according to the study.

“For instance, in the 1970s rare earth elements had few uses outside of some specialty fields, and were produced mostly in the United States. Today, rare earth elements are integral to nearly all high-end electronics and are produced almost entirely in China.”

The USGS tracks 88 minerals regularly but also works with the country’s Defense Logistics Agency on a watch list of about 160 minerals crucial to national security. This week’s USGS study deems the critical 23 as follows:

  • antimony
  • barite
  • beryllium
  • cobalt
  • fluorite or fluorspar
  • gallium
  • germanium
  • graphite
  • hafnium
  • indium
  • lithium
  • manganese
  • niobium
  • platinum group elements
  • rare earth elements
  • rhenium
  • selenium
  • tantalum
  • tellurium
  • tin
  • titanium
  • vanadium
  • zirconium

A January 2017 USGS report listed 20 minerals for which the U.S. imports 100% of its supply. Several of the above critical minerals were included: fluorspar, gallium, graphite, indium, manganese, niobium, rare earths, tantalum and vanadium.

This comprehensive work follows related USGS reports released in April, including a breakdown of smartphone ingredients to illustrate the range of countries and often precarious supply chains that supply those materials. That report quoted Larry Meinert of the USGS saying, “With minerals being sourced from all over the world, the possibility of supply disruption is more critical than ever.”

As both a former military commander and geologist, I know the very real national security risk of relying on foreign nations for what the military needs to keep our soldiers and our homeland safe.—Ryan Zinke,
U.S. Secretary of the Interior

David S. Abraham has been a prominent advocate of a rare minerals strategy for Western countries. But in an e-mail to the Washington Post, the author of The Elements of Power: Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age warned that Trump’s action could trigger a partisan battle. He told the Post that Republicans tend to use the issue to loosen mining restrictions while Democrats focus on “building up human capacity to develop supply chains rather than the resources themselves.”

Excessive and redundant permitting procedures came under criticism in a Hill op-ed published a few days earlier. Jeff Green, a Washington D.C.-based defence lobbyist and advocate of increased American self-reliance for critical commodities, argued that streamlining would comprise “a positive first step toward strengthening our economy and our military for years to come.”

In a bill presented to U.S. Congress last March, Rep. Duncan Hunter proposed incentives for developing domestic resources and supply chains for critical minerals. His METALS Act (Materials Essential to American Leadership and Security) has been in committee since.

Speaking to ResourceClips.com at the time, Abraham doubted the success of Hunter’s bill, while Green spoke of “a totally different dynamic” in the current administration, showing willingness to “invest in America to protect our national security and grow our manufacturing base.”

Update: Read about Jeff Green’s response to the U.S. national strategy.