Monday 25th May 2020

Resource Clips

Posts tagged ‘AuRico Gold Inc (AUQ)’

April 14th, 2015

SWOT analysis: Several gold companies release positive drilling results and production updates GoldSeek
AuRico and Alamos to become one in $1.5-billion deal Stockhouse
In a world filled with gluts, one metal is suddenly hard to find NAI 500
Disruptive stock watcher Chris Berry cautions investors about the real potential of deflation Streetwise Reports
Cuba awakening: What the country has to offer mining investors Industrial Minerals
U.S. Labor Department, ADP admit: “We’ve just been making this up” Equities Canada
Great deposits of the world—Hishikari, Japan Geology for Investors

April 13th, 2015

SWOT analysis: Several gold companies release positive drilling results and production updates GoldSeek
AuRico and Alamos to become one in $1.5-billion deal Stockhouse
In a world filled with gluts, one metal is suddenly hard to find NAI 500
Disruptive stock watcher Chris Berry cautions investors about the real potential of deflation Streetwise Reports
Cuba awakening: What the country has to offer mining investors Industrial Minerals
U.S. Labor Department, ADP admit: “We’ve just been making this up” Equities Canada
Great deposits of the world—Hishikari, Japan Geology for Investors

Week in review

November 16th, 2012

A mining and exploration retrospect for November 10 to 16, 2012

by Greg Klein

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Three dead in Mexican mining accidents

Three people died in two accidents at Canadian projects in Mexico this week. On Tuesday two contractors at AuRico Gold’s TSX:AUQ El Chanate open pit gold mine in Sonora state lost their lives “when a pressure vessel in one of the three separate ADR [adsorption, desorption and recovery] processing plants ruptured,” the company stated.

President/CEO Scott Perry said the accident “is incredibly distressing as the safety of our employees and contractors is the company’s highest priority and this incident is a tragic shock to everyone.”

On Thursday a construction contractor died at Baja Mining’s TSX:BAJ Boleo project in Baja California. Baja holds a 49% interest in the project, with a Korean consortium holding the remainder.

Investigations are underway into both accidents.

Quebec’s Plan Nord: Who pays how much?

That question was hotly debated in last summer’s provincial election. The victorious Parti Quebecois argued that resource companies should pay significantly more for the huge infrastructure program that the previous Liberal government envisioned. But a Thursday announcement by Stornoway Diamond TSX:SWY suggests Quebec’s minority government doesn’t intend to stray far from its predecessor’s plan—at least not for the time being.

A mining and exploration retrospect

Stornoway’s framework agreement and letter of intent with the province sees the government building a 143-kilometre extension from Route 167 in Quebec’s James Bay region. The company will use a government loan to build 97 kilometres of road from there to its Renard Diamond Project.

According to a Montreal Gazette article by Robert Gibbens, the deal differs little from a previous arrangement worked out with the previous government.

“Parti Quebecois Finance Minister Nicolas Manseau said the renegotiated road access pact will lead to $124 million of savings for Quebec taxpayers with Stornoway’s takeover of the final 97 kilometres,” Gibbens reported. “In fact, Stornoway is borrowing $77 million from the province to cover the single-lane road’s cost, amortized over 15 years at 3.35% interest. Total cost will be comparable with the old pact when Stornoway would have contributed $44 million.”

With its all-season road slated for completion in Q4 2013, the Route 167 extension would make Renard Canada’s first road-accessible diamond mine. Mine construction is scheduled to begin next year.

Relative calm, but uncertainty prevails in South Africa

The country’s major mining strikes have ended, Reuters stated on Thursday. “Around 80,000 South African miners or 15% of the workforce had been off the job at one point,” the news agency reported.

Doubt continues, however, regarding the viability of some mining operations. Additionally the National Union of Mineworkers, “which has delivered above-inflation wage hikes but contained militancy, has lost control over much of its rank and file, a source of concern to the ruling African National Congress and corporate bosses alike.”

Kitco News provided another Friday recap of the major companies affected. Strike-related violence has killed over 50 people so far.

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B.C. rejects mine

October 2nd, 2012

But was the government decision environmental or political?

by Greg Klein | October 2, 2012

Another British Columbia mine proposal has flunked its environmental review for reasons that might not be environmental. But the company, Pacific Booker Minerals TSXV:BKM, vows to continue with its Morrison copper-gold-molybdenum proposal for north-central B.C.

It was back in 1998 that the company began drilling the property, which is directly east of Morrison Lake, home to a genetically distinct type of sockeye salmon. The environmental assessment process began in 2003 and in 2009 the company applied for an environmental assessment certificate. On October 1 Pacific Booker announced that two B.C. government ministries refused to grant the certificate. They based their decision largely on the possible failure of environmental mitigation and opposition from local natives.

But was the government decision environmental or political?

“We plan to move forward,” company Director Erik Tornquist tells ResourceClips. “We were required by law to do an effects assessment to determine whether there were any significant adverse environmental, social, heritage, economic and health effects, which we did. Our findings were supported by three third-party reviews. The environmental assessment concluded there were no significant adverse effects. The report that went to the minister from the EAO [Environmental Assessment Office] and dealt with the various components, like water, fish, wildlife, etc., determined that there were no significant adverse effects. Well [the government says], ‘What about the risk?’ But it’s not a risk assessment, it’s an effects assessment.”

Indeed the EAO’s August 21 207-page report addressed some 16 concerns, mostly related to the environment but also issues such as heritage, economic effects, social effects, cultural foods and native land title. The conclusions repeatedly stated that, with successful implementation of mitigation measures and conditions, the mine is “not likely to have significant adverse effects.”

A September 20 report by EAO Executive Director Derek Sturko reiterated those conclusions. But he recommended the government take a “risk/benefit approach” that considers what might happen if mitigation measures, especially those affecting Morrison Lake, prove unsuccessful. Sturko also emphasized strong native opposition and a “moderate to strong prima facie case for aboriginal title.” He recommended the government reject the proposal. Environment Minister Terry Lake and Energy, Mines and Natural Gas Minister Rich Coleman did just that in a September 28 letter which was publicly released October 1.

We’re at a loss on how you can have a project with no significant environmental effects yet a certificate is denied.—Pacific Booker Minerals Director Erik Tornquist

An October 2 statement from the Lake Babine Nation said that two former copper-gold mines “continue to leach toxic acid and metals into the lake. Concern that the Morrison Mine would add to the cumulative discharges from the two closed mines was a recurring theme raised during the assessment process.”

The government decision was only the second time a mine has been rejected in the history of B.C. environmental reviews. In 2008 Northgate Minerals (now AuRico Gold TSX:AUQ) failed at both the federal and provincial level to get approval for a $200-million open-pit expansion to the now-closed Kemess South Gold-Copper Mine. In 2010 the Canadian Environmental Assessment Authority rejected Taseko Mines’ TSX:TKO Prosperity Gold-Copper Project, even though it passed B.C.’s environmental review. The federal agency expressed concerns about Prosperity’s potential effects on established native rights, potential rights, potential title and culture. In September Taseko re-applied with a $300-million revision for what is now the $1.1-billion New Prosperity proposal.

But currently the most controversial proposal in the always controversial subject of B.C. resources is the Enbridge Northern Gateway pipeline.

In an October 2 column, Vancouver Province writer Michael Smyth suggested the provincial government’s opposition to Enbridge is purely political: “With the pipeline so unpopular in B.C. right now, it seems [Premier Christy Clark] was determined to pick a fight, and hope that earns her points with B.C. voters.”

Clark’s BC Liberal party is trailing far behind the opposition New Democratic Party, which is generally expected to win the provincial election next May. The NDP’s 1991 to 2001 period in office, however, was rated a disaster by the mining industry.

B.C.’s environment minister denied any connection between the government’s Enbridge stance and his Pacific Booker decision. Lake told Canadian Press (in a story published by CBC), “It would send a very negative message to the investor community if we were to pick things to say ‘No’ to just to make a point.”

Speaking to ResourceClips, Pacific Booker’s Tornquist says, “We’re at a loss on how you can have a project with no significant environmental effects yet a certificate is denied. We have to look at our options here. It’s a bit early. The phone’s been ringing off the hook. On the federal side, I talked to the federal government yesterday [October 1] and they’re continuing with their process and their decisions are made independently.”

Stuart Bertrand, a Public Affairs Officer with B.C.’s Ministry of Environment, informs ResourceClips that the decision can’t be appealed. A judicial review may be possible if there are perceived violations of the environmental assessment act. Otherwise the company can submit a new application “with a new project design, as a decision has now been made that the current design is not acceptable.”

The Morrison proposal had proven and probable reserves of 1.37 billion pounds copper, 658,090 ounces gold and 10.05 million pounds molybdenum. A February 2009 feasibility study projected a conventional open pit with a 30,000-tonne-per-day mill for a capex of $516.68 million, with a pre-tax IRR of 20.05%, an NPV of $495.9 million at an 8% discount rate and payback in 4.2 years.

Pacific Booker shares opened and closed October 1 at $14.95, just five cents short of its 52-week high. But on October 2 they opened at $5.11 and closed at $4.95, a 52-week low.

In With Zijin

January 3rd, 2012

Chinese Giant Backs Equitas BC Copper-Gold Project

By Greg Klein

“Climb the mountain”—for Equitas Resources TSXV:EQT the challenge is both metaphorical and literal. While his drill crew thinks nothing of a late autumn scramble up a northern BC mountainside, President/Director Jay Roberge is more likely to scale figurative obstacles in the boardrooms of Hong Kong. As a result, the company’s Day Copper-Gold Porphyry Project now has the backing of Zijin Mining Group, China’s biggest gold producer.

“Most companies would not have tried to drill in that neck of the woods in October,” Roberge says. “But that reflects the kind of company we’re building here at Equitas. I wasn’t going to make the decision from Vancouver. So I told the guys to go up there and make the call from the mountain.”

Chinese Giant Backs Equitas BC Copper-Gold Project

Once mobilized, the crew hit a brief spell of clear weather and “climbed like goats” for 1,300 snow-covered metres to drill a 285-metre hole, “which is a great accomplishment under the circumstances,” Roberge says. “That indicates the type of company we are—very aggressive.”

Aggressive in the financial world too, as Roberge showed by snagging Zijin as Equitas’ largest shareholder. He points out the Asian giant is “the number 1 producer of gold in China, the number 3 of copper, the number 6 in zinc, [and] they have ambitions to be one of the top five miners in the world. Their current market cap is about $15 billion on the Hong Kong exchange. They’ve invested around a billion dollars in projects around the world. I was able to get their support for investing in early exploration.”

That support, Roberge emphasizes, allows for a unique business model. “Our company is being set up as an exploration company for Zijin,” he explains. “Other companies take their projects to a certain stage and then look for a joint-venture partner. We’ll be doing the same, but we already have our partner. We’ll be joint-venturing everything back to Zijin.

“So our model is to get six to eight projects and prove them out or disprove them as fast as possible,” he continues. “The ones that graduate, we’ll joint-venture. We’ll take capital from that joint venture and do more projects. It’s quite unique. It’s not at all common to see a company of our size hitching its wagon to a major. We have the backing and support of a multibillion-dollar company.”

Last October’s quick but intrepid mountainside adventure brought the following assay, released December 15:

  • 0.64 grams per tonne gold and 0.11% copper over 123 metres
  • (including 0.81 g/t gold and 0.13% copper over 53.1 metres)

“We know we’re in a porphyry system; the hole was mineralized throughout with some decent results; we’re very close to the source of the porphyry; and we’ll continue to explore on our first opportunity to get back up there,” Roberge says.

The result follows surveying, mapping and sampling that includes 211 rock and soil samples and nearly 400 historic drill cores that have been sent for assaying.

It was the historic drilling that really attracted Zijin, Roberge says. Falconbridge (acquired by Xstrata in 2006) drilled the property in 1974, followed by Skeena Resources TSXV:SKE in 1994.

It’s not at all common to see a company of our size hitching its wagon to a major. We have the backing and support of a multibillion-dollar company —Jay Roberge

Other companies also like the Toodoggone region, Roberge points out. “There’s the Kemess South Mine, which shut down in March, the Kemess Underground or Kemess North [AuRico Gold Inc TSX:AUQ], and Mount Milligan [Thompson Creek Metals TSXV:TCM] is being built to the south. Between us and Mount Milligan there’s Serengeti’s TSXV:SIR Kwanika Project. So we’re in the right area. With this historic drilling and the one hole we have now, we’re very, very optimistic about our chances up there.”

Among his company’s other advantages, Roberge includes its relationship with shareholder Zimtu Capital TSXV:ZC. “We work out of Zimtu’s office and share back-end resources with a number of other companies. That’s administrative, accounting, an in-house geo who we can all tap into, marketing and so on. So there’s a lot of expertise we can rely on to cut down on costs.”

Zijin, however, holds the largest chunk of Equitas, now about 19.9% with an option to reach 31%. Last November, geologist Richard Yu, general director of Zijin’s International Exploration Division, joined the Equitas board of directors.

Although the Day Project is very much early stage, Roberge sees an extremely busy 2012 on a number of fronts. Fundamental Research will release its initial report on Equitas. Roberge plans to spend more time in Hong Kong, including an appearance at the Mines and Money event, to recruit additional backers. “Quite frankly, the Asian market understands the value of our partnership with Zijin better than the market here,” he says. “Nobody here knows what Zijin is.” With more capital, Roberge hopes to acquire more projects—and to do so quickly. His optimism can take on the tone of urgency.

“With the markets the way they are, good opportunities are presenting themselves on the asset side. So we’re looking at a number of opportunities in British Columbia, Arizona, New Mexico and South America. The priority would probably lean towards BC and Arizona. We’d like to see a couple of acquisitions and maybe get some drilling done in Arizona before we get back to the Day property.”

Very optimistic indeed, especially given the company’s press-time share price of $0.095. With 51.33 million shares outstanding, that comes to a very modest market cap of $4.9 million.

That hardly deters Roberge. “People are going to realize Zijin Mining had good reason to invest in a little junior on the TSX Venture,” he says. “We think that’s going to bode well for our company and our shareholders.”