Tuesday 14th August 2018

Resource Clips


March, 2018

Jonathan Buchanan of the Association for Mineral Exploration comments on B.C.’s substantial increase in activity

March 29th, 2018

…Read more

March 29th, 2018

Mining IPOs have returned, says TMX Group’s Dean McPherson SmallCapPower
Audits of U.S. monetary gold lack credibility GoldSeek
Could the stars be aligned for $1,500 gold? Stockhouse
A quick history lesson on the TSX Venture Exchange Equities.com
Kaolin: The answer to TiO2 price hikes? Industrial Minerals
Volatility in lithium: A gift or a curse? The Disruptive Discoveries Journal
China’s Qinghai targets mammoth lithium carbonate expansion Benchmark Mineral Intelligence
Geology fundamentals—veins, dykes and sills Geology for Investors

“Gold, sir—gold!”: Peter Munk 1927-2018

March 28th, 2018

by Greg Klein | March 28, 2018

“He was the greatest gold miner of the modern age, a silvery, immaculate, dashing, and indefatigable tycoon with the menacing aplomb of a Florentine prince.” Matthew Hart’s 2013 description presaged the tributes that poured in after Peter Munk died in Toronto on March 28 at the age of 90.

Gold, sir-gold Peter Munk 1927-2018

Peter Munk 1927-2018

Saying “much nonsense has been written about Munk,” Hart profiled the celebrated miner in Gold: The Race for the World’s Most Seductive Metal. It was a bribe of cash and gold that bought 16-year-old Munk and his family out of wartime Hungary, but he didn’t return to the yellow metal until much later, and that followed a few spectacular business failures.

“We needed to find a business before it became popular, a business that was so unfashionable no one wanted to get into it,” said Munk. Such was the state of gold in 1983. Such was Munk’s eureka moment, which came not through a mineral discovery but a realization:

“Gold, sir,” Munk declared. “Gold! It carried the highest multiples. Gold shares sell at a very high value in relation to their earnings because a gold share is perceived to be not just a share but an option or a call on gold as well. If you buy Swatch watches, if you buy Nestlé, you buy the earnings. If you buy gold shares you buy it because, hey!— this company has 2 million ounces of gold and I think that gold will go up in five years!”

But the newly minted miner “had no patience for rummaging in the bush,” Hart continues. “Barrick’s strategy would be to buy reserves, not find them. Growth would mean rapid growth. Munk built his company like Lego, snapping gold mines into place after deciding what would fit. He bought some mines for their gold and others for their people.”

He did rather well, allowing him to donate nearly $300 million to good causes. He’s survived by his wife of 45 years, five children and 14 grandchildren.

Read some of the tributes to Peter Munk here and here.

March 28th, 2018

Could the stars be aligned for $1,500 gold? Stockhouse
A quick history lesson on the TSX Venture Exchange Equities.com
Kaolin: The answer to TiO2 price hikes? Industrial Minerals
Why the world’s central banks hold gold—in their own words GoldSeek
Silver will break out, says David Morgan SmallCapPower
Volatility in lithium: A gift or a curse? The Disruptive Discoveries Journal
China’s Qinghai targets mammoth lithium carbonate expansion Benchmark Mineral Intelligence
Geology fundamentals—veins, dykes and sills Geology for Investors

CSA considers regulatory reform; Supreme Court hears challenge to proposed national regulator

March 27th, 2018

by Greg Klein | March 27, 2018

Without guaranteeing results, the Canadian Securities Administrators intends to study ways to unravel some regulatory red tape. Acting on last year’s public consultations, the umbrella group for Canadian securities commissions now plans to establish working groups from its member organizations to examine a number of recommendations. Under consideration will be proposals to:

CSA considers regulatory reform Supreme Court hears challenge to national regulator

  • remove or modify the criteria for reporting issuers to file a business acquisition report

  • facilitate at-the-market offerings

  • revisit the primary business requirements to provide greater clarity to issuers preparing an IPO prospectus

  • consider a potential alternative prospectus model

  • reduce or streamline some continuous disclosure requirements

  • enhance electronic document distribution to investors

Some of the projects will take longer than others and there’s no assurance that any changes will be implemented, the CSA cautioned. But if adopted, the measures “could meaningfully reduce regulatory burden for public companies in Canada’s capital markets,” said Louis Morisset, CSA chairperson and president/CEO of l’Autorité des marchés financiers.

The proposals result from 57 letters received during a consultation period that ended last July. Among the respondents were public companies, investors, stock exchanges, law and accounting firms, industry groups and others. In some jurisdictions, securities commission staff also consulted directly with stakeholders.

Meanwhile a federal government proposal to unite the country’s commissions under a single national regulator faces a Supreme Court challenge. On March 22 a lawyer representing Quebec introduced arguments that the plan would be unconstitutional. A proposal rooted in the 1930s, given new prominence in the 1970s, rejected by the Supremes in 2011 and subject of an optimistic announcement in 2013 would supposedly have come to fruition this summer.

“The argument for a national regulator is that it will make the rules more consistent across the country, help regulators manage systemic risks, which are national in scope, and improve enforcement by making it easier to coordinate with police and prosecutors both within and outside of Canada,” according to the Globe and Mail.

“Those opposed to the plan are concerned that the move is a power grab by Ottawa, or that regulation is better done on the local level, to take into account issues specific to that region.”

Speaking to Canadian Lawyer magazine, Osgoode Hall law professor Bruce Ryder suggested judges might allow Ottawa to create a national regulator without forcing Quebec and co-opponent Alberta to join.

Inefficiencies between jurisdictions were among the reasons cited for ineffective action against investor fraud, according to recent articles by Postmedia and the Globe and Mail.

PricewaterhouseCoopers reports on the state of Canada’s top 25 miners

March 27th, 2018

…Read more

March 27th, 2018

Could the stars be aligned for $1,500 gold? Stockhouse
A quick history lesson on the TSX Venture Exchange Equities.com
Kaolin: The answer to TiO2 price hikes? Industrial Minerals
Why the world’s central banks hold gold—in their own words GoldSeek
Silver will break out, says David Morgan SmallCapPower
Volatility in lithium: A gift or a curse? The Disruptive Discoveries Journal
China’s Qinghai targets mammoth lithium carbonate expansion Benchmark Mineral Intelligence
Geology fundamentals—veins, dykes and sills Geology for Investors

March 26th, 2018

Kaolin: The answer to TiO2 price hikes? Industrial Minerals
How bad will the next recession be? Equities.com
Why the world’s central banks hold gold—in their own words GoldSeek
Silver will break out, says David Morgan SmallCapPower
With U.S. banking regs rollback, Dodd-Frank is now officially a dud Stockhouse
Volatility in lithium: A gift or a curse? The Disruptive Discoveries Journal
China’s Qinghai targets mammoth lithium carbonate expansion Benchmark Mineral Intelligence
Geology fundamentals—veins, dykes and sills Geology for Investors

Can’t live without them

March 23rd, 2018

The U.S. Critical Materials Institute develops new technologies for crucial commodities

by Greg Klein

A rare earths supply chain outside China? It exists in the United States and Alex King has proof on his desk in the form of neodymium-iron-boron magnets, an all-American achievement from mine to finished product. But the Critical Materials Institute director says it’s up to manufacturers to take this pilot project to an industry-wide scale. Meanwhile the CMI looks back on its first five years of successful research while preparing future projects to help supply the stuff of modern life.

The U.S. Critical Materials Institute develops new technologies and strategies for crucial commodities

Alex King: “There’s a lot of steps in rebuilding that supply chain.
Our role as researchers is to demonstrate it can be done.
We’ve done that.” (Photo: Colorado School of Mines)

The CMI’s genesis came in the wake of crisis. China’s 2010 ban on rare earths exports to Japan abruptly destroyed non-Chinese supply chains. As other countries began developing their own deposits, China changed tactics to flood the market with relatively cheap output.

Since then the country has held the rest of the world dependent, producing upwards of 90% of global production for these metals considered essential to energy, defence and the overall economy.

That scenario prompted U.S. Congress to create the CMI in 2013, as one of four Department of Energy innovation hubs. Involving four national laboratories, seven universities, about a dozen corporations and roughly 350 researchers, the interdisciplinary group gets US$25 million a year and “a considerable amount of freedom” to pursue its mandate, King says.

The CMI channels all that into four areas. One is to develop technologies that help make new mines viable. The second, “in direct conflict with the first,” is to find alternative materials. Efficient use of commodities comprises the third focus, through improvements in manufacturing, recycling and re-use.

“Those three areas are supported by a fourth, which is a kind of cross-cutting research focus extending across a wide range of areas including quantum physics, chemistry, environmental impact studies and, last but certainly not least, economics—what’s the economic impact of the work we do, what’s its potential, where are the economically most impactful areas for our researchers to address,” King relates.

With 30 to 35 individual projects underway at any time, CMI successes include the Nd-Fe-B batteries. They began with ore from Mountain Pass, the California mine whose 2015 shutdown set back Western rare earths aspirations.

The U.S. Critical Materials Institute develops new technologies and strategies for crucial commodities

Nevertheless “that ore was separated into individual rare earth oxides in a pilot scale facility in Idaho National Lab,” explains King. “The separated rare earth oxides were reduced to master alloys at a company called Infinium in the Boston area. The master alloys were brought to the Ames Lab here at Iowa State University and fabricated into magnets. So all the skills are here in the U.S. We know how to do it. I have the magnets on my desk as proof.”

But, he asks, “can we do that on an industrial scale? That depends on companies picking up and taking ownership of some of these processes.”

In part, that would require the manufacturers who use the magnets to leave Asia. “Whether it’s an electric motor, a hard disk drive, the speakers in your phone or whatever, all that’s done in Asia,” King points out. “And that means it is most advantageous to make the magnets in Asia.”

America does have existing potential domestic demand, however. The U.S. remains a world leader in manufacturing loudspeakers and is a significant builder of industrial motors. Those two sectors might welcome a reliable rare earths supply chain.

“There’s a lot of steps in rebuilding that supply chain. Our role as researchers is to demonstrate it can be done. We’ve done that.”

Among other accomplishments over its first five years, the CMI found alternatives to both europium and terbium in efficient lighting, developed a number of improvements in the viability of rare earths mining and created much more efficient RE separation.

“We also developed a new use for cerium, which is an over-produced rare earth that is a burden on mining,” King says. “We have an aluminum-cerium alloy that is now in production and has actually entered the commercial marketplace and is being sold. Generating use for cerium should generate additional cash flow for some of the traditional forms of rare earths mining.”

Getting back to magnets, “we also invented a way of making them that is much more efficient, greatly reduces sensitive materials like neodymium and dysprosium, and makes electric devices like motors and generators much more efficient.”

All these materials have multiple uses. It’s not like they don’t have interest in the Pentagon and other places.—Alex King

Future projects will focus less on rare earths but more on lithium. The CMI will also tackle several others from the draft list of 35 critical minerals the U.S. released in February: cobalt, manganese, gallium, indium, tellurium, platinum group metals, vanadium and graphite. “These are the ones where we feel we can make the most impact.”

While the emphasis remains on energy minerals, “all these materials have multiple uses. It’s not like they don’t have interest in the Pentagon and other places.”

But the list is hardly permanent, while the challenges will continue. “We’ve learned a huge amount over the last five years about how the market responds when a material becomes critical,” he recalls. “And that knowledge is incredibly valuable because we anticipate there will be increasing incidences of materials going critical. Technology’s moving so fast and demand is shifting so fast that supply will have a hard time keeping up. That will cause short-term supply shortfalls or even excesses. What we need to do is capture the wisdom that has been won in the rare earths crisis and recovery, and be ready to apply that as other materials go critical in the future.”

Alex King speaks at Argus Specialty Metals Week, held in Henderson, Nevada, from April 16 to 18. For a 15% discount on registration, enter code RARE2018.

Infographic: The five biggest market risks that billionaires hedge against

March 23rd, 2018

by Jeff Desjardins | posted with permission of Visual Capitalist | March 23, 2018

If you’ve studied the history of markets, you know that sentiment can turn on a dime.

Whether it is an unexpected wake-up call like the collapse of Lehman Brothers, or simply the popping of a bubble that’s blown too big, the tides can shift in a matter of hours or days.

No one knows this better than the world’s most elite investors—and that’s why billionaires like Warren Buffett, Ray Dalio, Bill Gross, Paul Tudor Jones II and Carl Icahn take the necessary precautions available to protect themselves from these big and unexpected market swings.

Five risks that keep billionaires up at night

This infographic comes to us from Sprott Physical Bullion Trusts and it highlights some of the potential market risks that could move markets, as well as how these elite investors are hedging to protect their fortunes.

The five biggest market risks that billionaires hedge against

 

While these are all market risks that billionaires are concerned about, it’s worth mentioning that these kinds of events are almost impossible to predict or forecast.

Despite the unlikelihood of them occurring, they all have the potential to impact markets—and that’s why elite investors are always active in hedging their investments.

A note on net worth

Why are billionaires so concerned—after all, don’t they have lots of cash to protect themselves?

It’s worth noting that on a relative basis, billionaires often aren’t very liquid at all. In fact, most of their net worth is usually tied up in business interests or other investments, and the value of these assets fluctuates with the market.

That means a big market movement could wipe out millions or billions of dollars in the span of hours. For an extreme example of this, just look at Mark Zuckerberg, who saw his net worth plunge $6 billion in just one day in the wake of his company’s most recent privacy crisis.

The five big market risks

Here are the risks keeping the world’s most elite investors up at night:

1. The return of inflation
Have central banks mastered monetary policy or is there a chance that inflation could come back with a vengeance? After trending down for decades, billionaire Carl Icahn says that creeping inflation could lead to higher interest rates, which he thinks would be “difficult to deal with for the market.”

2. Record-high debt
The most recent number for global debt is $233 trillion, and about $63 trillion of that is central government debt.

Bill Gross, the Bond King, says that our system is dependent on leverage, and the critical values that affect this are debt levels, availability and the cost of leverage. He said in a recent interview, “When one or more of these factors deteriorates, the probability of the model’s success and stability go down.”

3. Bond market worries
Last year, 84% of investors said that the corporate bond market was overvalued—and 82% said that the government bond market was overvalued.

In a recent interview, hedge fund billionaire Paul Tudor Jones II predicted a price plunge, saying that “bonds are the most expensive they’ve ever been by virtually any metric. They’re overvalued and over-owned.”

4. Geopolitical black swans
Elite investors continue to worry about geopolitical surprises that could impact markets, such as a trade war with China. We looked at this broad topic in depth in our previous infographic on geopolitical black swans.

5. Overzealous central banks
Lastly, many world-class investors are also concerned about the unintended after-effects of massive central bank programs in recent years. With $13 trillion in total QE pumped into global markets since 2008, investors are worried about how much room central banks have left to manoeuvre in a situation where the central bank “tool kit” is needed.

Posted with permission of Visual Capitalist.