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Posts tagged ‘Pacific Booker Minerals Inc (BKM)’

Week in review

March 15th, 2013

A mining and exploration retrospect for March 9 to 15, 2013

by Greg Klein

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Getting a fix on “the fix”

“When the Libor scandal broke, my first reaction at the time was, ‘Wait ‘til they look at gold.’” Dow Jones Newswires reporter and Wall Street Journal contributor Tatyana Shumsky discussed “the fix” in a Thursday WSJ Live interview after breaking the news that the U.S. Commodity Futures Trading Commission was looking into the way gold prices are set.

In a Thursday follow-up, Reuters explained the process this way:

The subject of gold price manipulation hit CNBC, Reuters and the Wall Street Journal this week

The subject of gold price manipulation hit CNBC,
Reuters and the Wall Street Journal this week.

“Currently, gold-fixing happens twice a day by teleconference with five banks: Bank of Nova Scotia-ScotiaMocatta [BNS], Barclays Bank Plc (BARC.L), Deutsche Bank AG (DBKGn.DE), HSBC Bank USA, NA and Société Générale (SOGN.PA). The fixings are used to determine prices globally.

“At the start of each gold price-fixing, the chairman announces an opening price to the other four members who relay that to their customers and, based on orders received from them, instruct their representatives to declare themselves as buyers or sellers at that price. The gold price is adjusted up and down until demand and supply is matched at which point the price is declared “fixed.” The fixings are used to determine spot prices for the billions of dollars of the two precious metals traded each day. Buyers and sellers can get insight on price changes and the level of interest during the fixing process. They can cancel, increase or decrease their interest based on that information.”

According to Ross Norman, owner of bullion broker Sharps Pixley, “The fix is open, consequential, transparent and has stood the test of time,” he told Reuters. “It’s not open to manipulation in the same way as Libor.” But Shumsky told WSJ Live, “To even deal with these banks, you have to have 20, 50 million dollars in gold alone.”

CFTC head Scott O’Malia downplayed his office’s interest. “I think we’ve had a couple of conversations. We’re looking at energy, indexes, prices, how they’re set,” Reuters quoted him. “We’ll look at all of the range of index-setting.”

Shumsky acknowledged, “It is very early days right now. But it is interesting that they’re looking at it because a lot of commodities markets are opaque like this. You have coal, iron ore, platinum….” And silver, the interviewer added.


Chris Powell, on the other hand, said he’s “always suspicious” of the CFTC. “This is not an investigation,” the Gold Anti-Trust Action Committee secretary/treasurer said in a Thursday CNBC interview. “They’ve been investigating silver for four and a half years and have not issued any report…. The attorney general of the United States said before the Senate judiciary committee a few days ago that the big banks and investment houses in the United States are not only too big to fail, they’re too big to jail.”

An interviewer asked, “What needs to be done to make the market more transparent, less susceptible to manipulation? Do we need to scrap the gold fix?”

“No, I think we need to commit journalism,” Powell responded. “You simply have to ask the central banks very specific questions about gold, as GATA has done over the years … what are you doing in the gold market today? Show us your gold books, your gold swaps, your gold leases. What is the purpose of your trading secretly in the gold market?”

While Eastern central banks keep buying gold, their Western counterparts swap, lease and sell the stuff to protect their currencies, he maintained. “None of us alive today has ever seen a free gold price.”

CNBC buried the video within a story that quotes Jeffery Christian of the commodities research firm CPM Group, who said he thinks GATA are “outright liars … pretty much what they do is nonsense.”

Who’ll get Venezuela’s gold?

As for gold repatriation, it might prove tumultuous to Venezuela. A Wednesday Reuters commentary by Peter Christian Hall said the 160 tons President Hugo Chavez brought home in 2011 would be worth about $9 billion today. But during the first eight months of 2012 about $550 million was sold. “Did further sales follow over the past six months, with proceeds partly paying for the public largesse that helped fuel Chavez’s victorious up-from-the-sickbed presidential run?” Hall asked.

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Week in review

February 22nd, 2013

A mining and exploration retrospect for February 16 to 22, 2013

by Greg Klein

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What’s behind the scenes for graphene?

Graphene may have sparked an explosion of patents but results of the boffins’ brainstorms “remain shrouded in secrecy,” according to Friday’s Industrial Minerals. CambridgeIP chairman Quentin Tannock told the journal, “Some companies will never publish their patents and … there are probably many very valuable ideas out there that haven’t been disclosed.”

A mining and exploration retrospect

Graphene’s unique properties suggest a host of possibilities,
but much recent research has focused on touch screen technology.

That could be the case even if only a small fraction of last year’s 5,000-plus patent applications pan out. On February 13 CambridgeIP, which encourages “development, deployment and dissemination of valuable technologies,” released its top 10 list of companies and agencies that filed patents for graphite’s wonder-derivative. A January CambridgeIP report prompted the BBC to speak of “an intensifying global contest to lead a potential industrial revolution.”

But regardless of whether some research stays secret, Focus Graphite TSXV:FMS president/CEO Gary Economo told IM, “We see 2013 as a breakout year.” Focus holds a 40% interest in Grafoid Inc, a company with its own top-secret graphene laboratory. IM said Economo “[predicted] the first raft of graphene-based consumer products will emerge on the market within months.”

Much of the research so far has been on touch screens and bio-sensors, Tannock added.

Rule of law lost in Canadian resource shakedowns

“What is the message being sent to the world” when “five or six disgruntled ex-employees … can shut down a business of 500 people at a cost of millions? That there is no law in northern Ontario?”

That’s how Wednesday’s Timmins Daily Press quoted Neal Smitheman, a lawyer representing De Beers, which faces a native blockade to its Victor diamond mine. The company has now lost nearly three weeks of an approximately 45-day season to transport heavy equipment and supplies over a winter ice road. This week only about half a dozen protestors were in place, apparently ex-employees who want to renegotiate an existing impact benefit agreement. Police refused to intervene, forcing the company to apply for a court injunction. On February 15 Judge Robert Riopelle issued an order that specifically “required” police to act. They still refused. De Beers went back to court on Wednesday.

If Smitheman sounded exasperated, a lawyer representing the Ontario Provincial Police seemed infinitely patient as he explained that the OPP takes a more “measured approach” towards natives than other people. Plus the weather was cold, he said.

Thursday’s Daily Press reported a plea to the demonstrators from two local politicians. “We have hundreds of families across James Bay and the Timmins region who rely on work at the Victor mine to pay their bills and save for their kids’ college education,” said MP Charlie Angus.

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Week in review

February 15th, 2013

A mining and exploration retrospect for February 9 to 15, 2013

by Greg Klein

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Negligence, aging infrastructure behind Russian mining disasters

Just two days after at least 18 people died in Russia’s latest coal mining accident, an investigation wrapped up into a much bigger disaster that took place in 2007. Six mine employees and three government officials now face criminal charges for safety violations causing a methane gas explosion that killed 110 workers, RIA Novosti reported on Wednesday.

Negligence, aging infrastructure behind Russian mining disasters

Monday’s Komi mine disaster took place 1,200 miles from Moscow
in “a grim part of northern Russia that was initially developed as
part of the Gulag system of labour camps.”

Methane gas has been blamed for Monday’s Komi accident as well, although some sources also point to aging infrastructure. The Komi blast took place about 800 metres underground in “a grim part of northern Russia that was initially developed as part of the Gulag system of labour camps,” the Independent stated. About 250 miners were present. In 2010 another Russian mine disaster claimed over 60 lives.

On Friday the owner of the Komi mine, Russian steel giant Severstal, announced production had resumed.

RIA Novosti published an infographic illustrating the danger of methane gas.

Some improvement in China despite high death toll

A death-to-tonnage ratio paints a disturbing picture of Chinese mine safety. For every 100 million tonnes of coal produced in the country last year, 37 workers died, China Daily reported on Tuesday. Citing government sources, the paper said the death rate was down “from 56.4 deaths per 100 million tonnes of coal output in 2011, but still well above the U.S. level of 1.9 in 2011.” Coal mining accidents killed 1,384 last year compared to 1,973 in 2011, the paper added.

So far this year China has had at least 45 people die in coal mining accidents with seven others missing, according to the U.S. Mine Rescue Association. The organization attributes its info to news reports that “do not represent the actual total number of miners killed or missing in China mine disasters.”

Would-be miner to sue B.C. government

Pacific Booker Minerals TSXV:BKM has hired a lawyer “to advance litigation against the province of British Columbia” for rejecting its proposed Morrison copper-gold-molybdenum mine, the company announced on Wednesday. Last October two B.C. ministries denied the project an environmental assessment certificate even though it passed an environmental assessment review.

De Beers blockade typifies Canada’s country risk

One native blockade ended February 7 only to be replaced by another three days later. On Sunday a new group of about 16 protestors prevented winter convoys from reaching De Beers’ Victor diamond mine in northeastern Ontario. By Friday afternoon the company was reportedly in court asking for an injunction.

The blockades struck at a crucial time when a winter road allows approximately 45 days to haul heavy equipment, fuel and other supplies to the isolated location. The rest of the year the ground is too soft. As a result, De Beers spokesperson Tom Ormsby said the blockades could “jeopardize the health and safety of our employees and the future of the mine,” the Toronto Sun reported on Friday.

The grievances seem to stem from a 2005 impact benefit agreement with the Attawapiskat native community 90 kilometres away. Paraphrasing Ormsby, the Timmins Daily Press wrote, “Sometimes it’s because someone who was dismissed wants to be rehired, or they feel they are owed money from a contractor or they are not being compensated properly for their trap line.”

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Year in review: Part II

December 29th, 2012

A mining and exploration retrospect for 2012

by Greg Klein

Read Part I of Year in Review.

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Graphite boom, bust and echo

One of the commodities that excited the 2012 market, graphite began stirring interest in 2011 and really gained momentum early this year. But the precipitous fall, right around April Fool’s Day, let cynics bask in schadenfreude. It was a bubble all along, they insisted.

Well, not quite. Despite reduced share values, work continued as the front-runners advanced their projects and earlier-stage companies competed for position in graphite’s second wave of potential producers. By autumn some of the advanced-stage outfits, far from humbled by last spring’s events, boldly indulged themselves in a blatant bragging contest.

Old king coal to regain its throne

If clean carbon doesn’t excite investors like it used to, plain old dirty carbon might. By 2017 coal’s share of the global energy market will rival that of oil. So says the International Energy Agency, which issued its Medium-Term Coal Market Report in December.

A mining and exploration retrospect for 2012

The forecast sees China consuming over half the world’s production by 2017. “Even if Chinese GDP growth were to slow to a 4.6% average over the period, coal demand would still increase both globally and in China,” the report stated. India, with the world’s “largest pocket of energy poverty,” will take second place for consumption.

Coal’s growth in demand is slowing, however. But its share of the energy mix continues to increase even though Europe’s “coal renaissance” (sic) appears to be temporary.

Bringing coal miners to new hassle

Chinese provide much of the market and often the investment. So why shouldn’t they provide the workers too? That seems to be the rationale of Chinese interests behind four British Columbia coal projects.

The proponents plan to use Chinese underground workers exclusively at the most advanced project, HD Mining International’s Murray River, for 30 months of construction and two additional years of mining. Only then would Canadians be initiated into the mysteries of Chinese longwall mining. But with only 10% of the workforce to be replaced by Canadians each year, Chinese “temporary” workers would staff the mine until about 2026. The B.C. government has known about these intentions since at least 2007.

The HD Mining saga has seen new developments almost every week since the United Steelworkers broke the story on October 9.

As Greenland’s example suggests, the scheme might represent another facet of China’s growing power.

Geopolitical geology

Resource imperialism aside, resource nationalism and other aspects of country risk continued throughout 2012. South American Silver TSX:SAC continues to seek compensation after spending over $16 million on a silver-polymetallic project that the Bolivian government then snatched as a freebie. Centerra Gold TSX:CG escaped nationalization in Kyrgyzstan but works its way through somewhat Byzantine political and regulatory intrigue, as does Stans Energy TSXV:HRE. In November the latter claimed a court victory over a hostile parliamentary committee.

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100 years of AME BC

November 23rd, 2012

The Association for Mineral Exploration British Columbia embarks on its second century

by Greg Klein

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When Gavin Dirom talks about drawing on the past to address future challenges, he might be speaking from personal experience. The president/CEO of the Association for Mineral Exploration British Columbia is actually Gavin Dirom III, named after his father and grandfather. They both held senior positions with the organization. “My grandfather was the association’s president in the ’60s, my father was a director in the late ’80s and early ’90s,” he explains. Now, with AME BC celebrating its 100th anniversary, Dirom might hold an ideal position to appreciate the group’s past and help guide its future.

“All this grew from somebody’s idea in 1912, just a few people to start. Then it became an organization that’s still going strong a hundred years later,” he says.

“It’s a big part of our history. It’s province-building history that prospecting, mineral exploration and mining has contributed to in a major way. Most of the province was opened up through the efforts of those early pioneers.”

The Association for Mineral Exploration British Columbia embarks on its second century

This 2008 photo from the Ball Creek Project in northwestern B.C. has an almost timeless quality, suggesting continuity between the past, present and future. (Photo: John Fleishman, courtesy AME BC)

It’s a colourful story too. Douglas Fetherling’s The Gold Crusades: A Social History of Gold Rushes 1849 to 1929 relates how mining transformed what was a land of native settlements, Hudson Bay Company posts and, on Vancouver Island, a few colonial officials. By 1852, as the California gold rush played out, over 500 prospectors wandered north. A major strike was found on the Fraser River in 1856. The following year hundreds more would-be miners, mostly American, showed up en masse, transforming the isolated outpost of Victoria and threatening British sovereignty. Then in 1858 Governor James Douglas, who by no means wanted more Americans cluttering up his colony, made the mistake of shipping 800 gold ounces to the San Francisco Mint for refining. Word spread quickly and about 30,000 additional adventurers arrived that year. The Fraser River Gold Rush was on. But by 1862 even that was superseded by Billy Barker’s spectacular find, sparking the Cariboo Gold Rush of Barkerville fame. And that was just another stepping stone towards the granddaddy of all gold rushes at the mother of all motherlodes, the Klondike of Dawson City fame in 1898.

Prospectors fanned out to other regions too. Margaret Ormsby’s definitive work British Columbia: A History lists some of the deposits found by the 1880s in southeastern B.C. “Silver-lead and zinc had been discovered in Slocan, coal in East Kootenay, copper near Phoenix and lode gold at Camp McKinney, Fairview and Hedley.” Rising silver prices in 1895 sparked a regional boom in 1896. Ormsby quotes an historic source describing the town of Nelson as “short of frills, boiled shirts, parsons, lawyers and prohibition orators” but not “mule skinners, packers, trail blazers, remittance men and producers, with a slight trace of tenderfeet.”

The region, Ormsby writes,

had something of the character of the rushes to the placer mines of Cariboo [in central B.C.], Omineca [north-central B.C.] and Cassiar [far-northern B.C.]. In its first years, Rossland had as colourful a floating population of Americans, “Cousin Jacks” (Cornishmen), Irish, Croats and Scandinavians as ever graced the camps of Idaho and Colorado. For these flamboyant and roistering prospectors, claim-jumpers and stock-manipulators, Sourdough Alley provided every kind of entertainment: prize fights in theatres, keno tables in gaming-houses; boa-feathered dance-hall girls; bars; and orchestras and bands which played round the clock.

Yes, exploration and mining brought civilization—in a manner of speaking. It also helped bring about settlement, law, infrastructure and economic diversification. Overall it played a profound role in shaping Canada’s most westerly province.

Meanwhile, that small group in 1912 has grown to 4,800 AME BC members categorized as junior and major companies, geoscientists, prospectors, engineers, entrepreneurs, suppliers, mineral producers and associations. They also hold expertise in law, accounting and public policy, all mutually beneficial vocations that support the sector. They work in about 100 countries, with Vancouver boasting the world’s highest concentration of exploration and mining professionals. “That’s what the evolution of exploration and mining in B.C. has led to,” says Dirom. “We’re fortunate to be the centre of mineral exploration excellence in the world.”

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Week in review

November 9th, 2012

A mining and exploration retrospect for November 3 to 9, 2012

by Greg Klein

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“So why buy the seniors?”

Briefly but significantly, Goldcorp TSX:G overtook Barrick TSX:ABX to become the world’s biggest gold miner by market cap. Goldcorp closed Tuesday with a $35.32-billion cap, slightly above Barrick’s $35.3 billion, Reuters stated.

That, despite the fact Barrick produces far more gold, with guidance of 7.3 million to 7.5 million ounces this year, compared to Goldcorp’s 2.35 million to 2.45 million ounces. Newmont, the world’s second-largest gold producer, expects to come in “at the low end” of its projected 5 million to 5.1 million ounces.

A mining and exploration retrospect

“It’s not necessarily that Goldcorp is doing so well, it’s just that Barrick is doing so poorly,” Reuters quoted John Ing, Maison Placements Canada president and mining analyst. The news agency noted that Barrick shares fell nearly 25% so far this year, while Goldcorp weathered the storms with a mere 3.5% drop.

In a Friday Bloomberg article, one of Barrick’s fired CEOs pointed out the proportionately greater potential of smaller companies. “You’ve got no growth in total in the industry and a lot of your mines are aging and closing down, so you have to work very hard just to stay even,” Randall Oliphant told the news agency. Now executive chairman of New Gold TSX:NGD, Oliphant was Barrick’s CEO from 1999 to 2003. He told Bloomberg that once a company’s producing more than two million ounces a year, shareholders’ growth expectations are hard to meet.

Bloomberg’s index of 20 mid-tier gold miners “rose 1.3% in the past three years through [Thursday], compared with a 19% decline in a gauge of 14 seniors. In the same period, New Gold has climbed 154% in Toronto, while Barrick slumped 18%,” the agency reported.

Craig West, an analyst with GMP Securities, told Bloomberg, “Barrick isn’t going to grow by 50% in the next three years. I can name eight different juniors that will, so why buy the seniors?”

The juniors West referred to might have been mid-caps like New Gold, which closed Friday with 462.55 million shares outstanding at $10.74 for a market cap of $4.97 billion. But some micro-caps don’t do too badly. On Monday Brixton Metals’ TSXV:BBB share price rose 33%, from $0.15 to $0.20, on news from its Thorn silver-gold-polymetallic project in British Columbia. The $13.55-million-market-cap company closed Friday at $0.215, with 63.03 million shares outstanding.

By Wednesday’s close, Barrick’s market cap was back on top. The giant closed Friday with a billion shares outstanding at $36.06 for a market cap of $36.08 billion. On October 31 Barrick announced a quarterly dividend of $0.20.

Goldcorp closed the week with 811.21 million shares at $44.24 for a market cap of $35.89 billion. Goldcorp announced a monthly dividend on November 5 of $0.045.

Friday’s closing bell found Newmont with 491.54 million shares at $48.07 for a $23.63-billion market cap. On October 31 the company announced a quarterly dividend of $0.35.

Cow Mountain no bull, says Barkerville

Still under a Cease Trade Order imposed last August, Barkerville Gold Mines TSXV:BGM intends to release a revised resource estimate later this month, Business in Vancouver reported on Tuesday. The CTO remains in effect until the company’s Cow Mountain resource estimate meets the B.C. Securities Commission’s satisfaction.

Last June Barkerville shocked and awed the market with an indicated resource of 69 million tons (not tonnes) grading an average 5.28 g/t gold for 10.63 million gold ounces.

On June 28 close, Barkerville’s stock sat at $0.81. The following day, when the Cow resource was announced, Barkerville opened at $1.35 and closed at $1.21. That evening the company announced “incentive stock options to certain directors, officers, employees and consultants of the company to purchase up to an aggregate of 634,980 common shares” at $1.21 a share. The next trading day, July 3, the stock hit a 52-week high of $1.67. On the August 13 CTO it closed at $1.22.

Investor enthusiasm aside, some observers were skeptical, even derisive of the resource estimate. “Hilarious” was the Northern Miner’s response.

Barkerville’s June 29 press release also suggested a non-43-101 “total geological potential” for the Island Mountain/Cow Mountain/Barkerville Mountain trend of 405 million to 684 million tons with an average grade between 4.11 g/t and 5.49 g/t for 65 million to 90 million gold ounces. Those numbers, the company stressed, were potential “and it is uncertain if further exploration will result in the delineation of mineral resources.”

Referring to the 43-101 resource estimate, Barkerville president/CEO Frank Callaghan told BIV, “We’re really confident in the numbers. We support the guy that’s done the work and we’re not prepared to throw him under the bus. He’s done a good job.”

The company has been twinning holes and drilling deeper, and has contracted Snowden Mining Industry Consultants to oversee the new 43-101. As a result it should be “very, very comprehensive to a point where a 10-year-old is going to be able to read it and understand it,” Callaghan told BIV.

The story quoted Northern Securities mining analyst Matthew Zylstra, who said that Snowden “adds some credibility. So whatever they come out with, I think this is going to be viewed a lot more positively.”

But he added, “I think they’re going to use a lot more strict criteria, so my feeling is that they won’t come out with the same kind of numbers that [the previous QP] Peter George did.”

Sub-Saharan Klondike

Where better to find an elephant country than in elephant country? Except for oil, South Sudan’s underground riches have long been neglected. But, according to a Friday Reuters dispatch, artisanal miners talk of finding the occasional nugget grading 200 grams or more. Now foreign companies are lining up in anticipation of new mining legislation scheduled to pass later this month. It’s expected to spark a licensing and exploration rush for several minerals.

“Nobody knows the extent of South Sudan’s mineral reserves because the 22-year war prevented exploration,” Reuters stated. “The latest geological surveys date back to the 1970s and ‘80s, but mining officials say diamond and gold deposits in South Sudan’s mineral-rich neighbours are encouraging. They describe the 16-month-old country as virgin territory.” South Sudan split from Sudan last year.

The news agency noted the trials of working “in a landlocked country with just 300 kilometres of paved road.” As government adviser Rainer Hengstmann told Reuters, “You need a railway if you want to go large-scale. It will take time. They really need roads and power.”

In the meantime artisanal miners prevail. Reuters described dozens of “Toposa tribesmen and women, festooned with plastic necklaces, brass piercings and beaded amulets, hack[ing] away at the red soil with metal poles and shovels, digging small craters in a boozy revelry.”

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Defining a problem

October 15th, 2012

Canada continues to expand its interpretation of environmental issues

by Greg Klein

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Amnesty International has not only joined the campaign against a Canadian mining proposal. It’s been granted “interested party” status by a federal environmental review panel. So has a nationalist group, the Council of Canadians. The news suggests that Canada has expanded its definition of “environmental” issues even further than the cultural and spiritual matters, and native rights and potential rights, that it has previously considered.

Canada continues to expand its interpretation of environmental issues

That’s the result of legislation passed last June. At the time environmentalists were critical, saying the new law would weaken the review process for resource proposals. But this announcement from a Canadian Environmental Assessment Agency review panel seems to suggest otherwise.

The three-member panel was appointed by the CEAA to review the $1.1-billion New Prosperity Gold-Copper Project proposed by Taseko Mines TSX:TKO for south-central British Columbia. On October 12 the panel announced its selection of interested parties from the groups and individuals who applied for the distinction. Although the panel will also hear from the public, “only those persons with interested party status will be permitted to participate in all aspects of the review during the public hearing phase,” the announcement stated.

An international human rights organization and a Canadian nationalist group made the cut. According to the panel they’re directly affected by the project, or have relevant information or expertise. The panel’s announcement stated that “the explicit definition of ‘interested party’ and the requirement for the panel to determine whether a person qualifies as an interested party are new” under last June’s legislation. To define interested parties, “the panel has followed a liberal and generous approach.”

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Week in review

October 5th, 2012

A mining and exploration retrospect for September 29 to October 5, 2012

by Greg Klein

So much for the environmental review

Monday’s news from British Columbia indicates another level of uncertainty has hit the province’s mining sector. Two B.C. cabinet ministers refused an environmental assessment certificate for Pacific Booker Minerals TSXV:BKM, even though the company passed a provincial environmental review. As a result, the half-billion-dollar Morrison copper-gold-molybdenum proposal has been put on hold.

A new development at the provincial level, it does have similarities to a federal decision to reject Taseko Mines’ TSX:TKO Prosperity gold-copper mine proposal for B.C. A November 2010 report from the Canadian Environmental Assessment Authority convinced the federal government to reject the $800-million proposal. The three-member CEAA panel found few significant adverse environmental effects but emphasized significant adverse effects on established native rights, potential rights, potential title, tradition and culture.

Mining and exploration week in review

Now B.C. has taken a comparable approach, although the supposedly “environmental” arguments come from politicians, not the people who conducted the environmental review. In fact the provincial review repeatedly stated that, with successful implementation of mitigation measures and conditions, the Morrison mine is “not likely to have significant adverse effects.”

Nevertheless Derek Sturko, who’s both executive director of B.C.’s Environmental Assessment Office and an associate deputy minister of the environment, seemed to reject his own department’s 270-page report. He suggested instead that the government take a “risk/benefit approach.” Sturko also emphasized strong native opposition and a “moderate to strong prima facie case for aboriginal title.” On that basis, two cabinet ministers representing mining and the environment nixed the proposal.

The decision might be related to the pre-election BC Liberal government’s prevaricating but currently negative stance towards the proposed Northern Gateway pipeline. But the province’s decision, like the federal decision regarding Taseko, also raises the question of whether native rights are handled according to the principle of law or appeasement.

Taseko submitted a revised $1.1-billion New Prosperity proposal to the feds on September 20. On Tuesday Business in Vancouver cited analysts, for some reason speaking anonymously, who said Taseko’s $300-million revision remains viable despite a drop in copper prices. But “with a large question mark as to whether the federal government will approve the project on a second go-round, they’re currently ascribing no value to the project in their target stock prices for the company,” BIV reported.

On Tuesday Pacific Booker Director Erik Tornquist told ResourceClips his company is reviewing its options.

Confiscation without compensation

If miners haven’t given up on B.C., it might be a case of the devil they know. Wednesday’s announcement that the Bolivian government would not provide compensation for nationalizing the Malku Khota Project followed months of uncertainty for South American Silver TSX:SAC. Since 2007, the company had spent over $16 million building a resource of 158 million ounces silver and 1,184 tonnes indium with lead, zinc and copper credits.

The company claimed the support of 43 out of 46 land-owning indigenous groups. SAC blamed illegal artisanal miners and activists from outside the region for intense opposition from the three dissident communities.

But last May, the company said, Mining Minister Mario Virreira signed an agreement with the 43 supportive groups stating that the government will not reverse the mining concession and that the company should continue exploration.

Protests turned violent in June, with one death and several injuries. Later that month seven people were taken hostage, including three drill contractors, two SAC employees, a government prosecutor and a police officer. The final three hostages were released unharmed after 11 days, when the government decreed that it would nationalize Malku Khota.

Reuters quoted a confident-sounding Vice-President Alvaro Garcia saying, “If we have to invest $500 million or $700 million or even $1 billion for a large-scale project at Malku Khota, which benefits Bolivia, the state is prepared and has the capacity to do that.”

At the time he added that government might pay compensation of $2 million or $3 million. Then came Wednesday’s decree. In an Agence France-Presse dispatch printed in the Globe and Mail, Virreira stated, “The nation has no financial obligation to South American Silver.”

By press time South American hadn’t responded. In an August 2 statement Greg Johnson, then the company’s president/CEO, said the company is prepared to go to international arbitration.

But, as Financial Times correspondent Andres Schipani pointed out, “Getting fair compensation, or any for that matter, from Bolivia has proved tricky since 2007. A year after [President Evo] Morales took office, the Andean country pulled out of the World Bank body that conducts arbitration between businesses and governments …”

Schipani noted other troubled nationalizations in Bolivia, including the Colquiri tin mine taken from Glencore in June. The government rationalized the move by saying it could then end disputes between independent and unionized miners. But the conflict flared up again with more violent clashes which shut down operations. On September 14 Reuters quoted Hector Cordova, president of the state-owned mining company, who said, “We’re losing more than $250,000 per day through lost production and this has been going on for two weeks. That means an accumulated loss of almost $4 million.”

Last Sunday the government said it solved the dispute by dividing the mine’s richest vein between the rival groups.

Friends and foes in the Kyrgyz Republic

On Friday three Kyrgyzstan MPs faced criminal charges while political unrest focused on Centerra Gold’s TSX:CG Kumtor Gold Mine. Prosecutors say the three attempted to overthrow the government by leading a mob that stormed the parliament building on Wednesday, Reuters reported. The incident grew out of a protest demanding that Kumtor be nationalized.

Violence has turfed previous Kyrgyzstan governments in 2005 and 2010. Last June a motion to nationalize Kumtor failed to pass parliament but MPs did pass a motion to consider increasing the country’s 33% stake in the Centerra subsidiary that owns the mine, as well as redefining the concession and boosting taxes.

But reassuring news came on Monday when Kyrgyzstan’s new president Zhantoro Satybaldiyev declared, “Kumtor will not be nationalized.” He told Reuters, “Problems will be resolved. I asked [the Kumtor venture] to keep up its output.” He added, “The way they extract gold, it’s really a state-of-the-art job. To be honest, I am jealous of their skills.”

The news agency pointed out, however, that the government had cancelled a televised auction of mining licences on August 28 after protesters stormed the TV studio.

Kumtor produced 583,156 gold ounces in 2011 at $482 an ounce. But in August the company blamed its $54.6-million Q2 loss largely on Kumtor’s “abnormal mining costs.”

Last September Kyrgyzstan ordered Stans Energy Corp TSXV:HRE to suspend drilling at its Kutessay II REE Deposit. According to the company, the government wanted “a firm proposal for the gratuitous transfer of a percentage of ownership” of a company subsidiary to the state. The stop-work order ended as the company met with Satybaldiyev and Economic Minister Temir Sariev.

In a statement issued Monday, Stans quoted Sariev saying, “Our state does not have the necessary financial and technical resources for the development of deposits and we have, so far, no such specialists. Development of the mining industry of our country at this stage is only possible by attracting investment. And the investors will come to our country when they will be confident in the safety of their financial investments.”

South Africa: A tragic outcome from a positive move?

Another striking miner was killed in South Africa Thursday night. On Friday Anglo-American Platinum fired 12,000 strikers. A Reuters dispatch in the Globe and Mail stated, “When rival Impala Platinum fired 17,000 workers in January to squash a union turf war, it led to a six-week stoppage in which three people were killed, the company lost 80,000 ounces in output and platinum prices jumped 21%.”

One disturbing aspect of the crisis is that a generous pay hike in a poor country can cause so much controversy. In last month’s “Lonmin settlement,” the platinum producer raised miners’ wages between 11% and 22%. Nic Borain, described as “an independent political analyst,” told Reuters, “Amplats had been giving signals that it was going to hold the line after Lonmin had folded—but it’s a huge gamble. Someone had to take it on the chin or this would have kept on unravelling and spread through the economy. It’s difficult to know whether this causes the unrest to spread or whether it takes some of the sting out of it. It could go either way.”

B.C. rejects mine

October 2nd, 2012

But was the government decision environmental or political?

by Greg Klein

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.