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Posts tagged ‘chromium’

King’s Bay Gold to acquire never-drilled copper-cobalt property in Labrador

October 28th, 2016

by Greg Klein | October 28, 2016

An intriguing chance find has King’s Bay Gold TSXV:KBG hoping the Trans-Labrador Highway will be a road to discovery. That’s the story behind the company’s October 27 announcement of a definitive agreement to acquire the Lynx Lake copper-cobalt property in south-central Labrador.

King’s Bay Gold to acquire never-drilled copper-cobalt property in Labrador

Powerlines and the Trans-Labrador Highway
run adjacent to the Lynx Lake copper-cobalt property.

As Newfoundland was building the highway in 2008, a provincial contractor with prospecting experience noticed evidence of disseminated and massive sulphides, King’s Bay geologist/director Nick Rodway explains. Some geological sleuthing eventually drew the contractor to the property’s east side, where a quarry had been blasted for aggregate.

Grab samples assayed the following year showed non-43-101 results up to 1.39% copper, 0.94% cobalt, 0.21% nickel and 6.5 g/t silver. Regional low-res magnetic surveys undertaken by the province and preliminary work in 2014 with a hand-held EM-16 device suggest strong conductors underlying the area.

Grab samples taken on the property’s west side in 2015 brought non-43-101 results up to 1.03% copper, 0.566% cobalt, 0.1% nickel, 5 g/t silver, 0.36% chromium, 0.39% molybdenum and 0.23% vanadium.

With a team returning to Lynx Lake next week, King’s Bay intends to conduct a sampling program to bring 43-101 results, along with further EM-16 surveys. Should all go to plan, airborne geophysics could follow this winter.

Open to year-round work, highway-accessible and with adjacent powerlines, the 20-square-kilometre property sits about 100 kilometres southeast of the town of Happy Valley-Goose Bay.

Subject to approvals, the acquisition costs King’s Bay $100,000 over three years and 900,000 shares over two years. On October 27 the company also announced a private placement of up to $1 million.

The news comes amid growing concerns over future cobalt supply. Nearly 60% of global production comes from the Democratic Republic of Congo, a country rife with political instability and conflict mining.

At the same time increased demand comes from “the energy storage revolution,” reports Benchmark Mineral Intelligence. Its data shows “2015 total global supply at 100,000 tpa, of this the battery market consumed 48,000 tpa.

“With a lithium-ion battery production surge well underway—and Benchmark recently revising its megafactories tracker to now 14 that are under construction ranging from three- to 35-GWh capacity—lithium-ion battery demand for cobalt is set to exceed 100,000 tpa by 2020.”

KWG promotes its own legislation for Ring of Fire development

June 2nd, 2014

by Greg Klein | June 2, 2014

With Ontario’s Ring of Fire subject to competing development proposals, KWG Resources TSXV:KWG has taken an unusual approach to sell its vision for the resource-rich region. The company has drafted its own proposed legislation, which it’s promoting to provincial election candidates and voters through a social media campaign.

Ontario elects a new government on June 12. Among the issues is the Ring of Fire, the infrastructure-less region that’s touted as containing mineral potential worth $60 billion, if not hundreds of billions. Other rough estimates thrown around by stakeholders and media say the region needs over $2 billion of initial development before mine development can be viable. The incumbent Liberals have so far pledged $1 billion. But with little agreement among stakeholders on how—or whether—to develop the region, KWG says it’s “happy to take a leadership role that helps end the political gridlock.”

KWG promotes its own legislation for Ring of Fire development

Not surprisingly, a railway is central to KWG’s plan. While the company has advocated a north-south rail link, Noront Resources TSXV:NOT has called for an east-west road. Before Cliffs Natural Resources NYE:CLF suspended its Black Thor project last November, that company had conditional provincial support for a north-south road.

But to push its plan, KWG now takes a shot at the northern development corporation that Ontario created to co-ordinate and advise on the Ring of Fire. “Ontario already has a northern development corporation,” the company states. “It is the Ontario Northland Transportation Commission.” Helpfully, “the principal operating asset of the ONTC is the Ontario Northland [railway].”

KWG sees the railway revitalized by revenue from hauling the region’s chromite, nickel and other valuable minerals. “If the ONTC were made into a non-share capital corporation similar to Canada’s port and airport authorities, it could be governed by the northern residents of Ontario whose communities it serves,” including native bands, the company emphasized. The ONTC could then raise money in capital markets, enabling development “with the necessary social licence together with the discipline of the capital markets, rather than from the public purse.”

KWG encourages people to sign an online petition, contact candidates and distribute the company’s pitch through social media.

Through its subsidiary Canada Chrome Corp, KWG holds a 330-kilometre line of mining claims from the region to rail and road infrastructure to the south. Canada Chrome has spent $15 million on a surveying and soil testing program for the engineering and construction of a railway. The mining claims were the subject of a legal dispute with Cliffs, which wanted to build an all-weather road through much of the same route before the company suspended its Ring of Fire project.

See KWG’s online petition, an overview of its proposal or the entire bill.

Read more about Ring of Fire transportation proposals.

Read an April 1 commentary about the Ring of Fire.

EU names six new critical materials, warns of industry challenges

May 26th, 2014

by Greg Klein | May 26, 2014

Six new critical raw materials bring the European Commission’s list up to 20, posing a “major challenge for EU industry,” the EC announced May 26. An update to the original 2011 collection, the set now includes borates, chromium, coking coal, magnesite, phosphate rock and silicon metal. No longer included is tantalum, now considered to have a lower supply risk. The division of rare earths into two categories, light and heavy, brings the total to 20 materials:

Raw materials are everywhere—just consider your smartphone. It might contain up to 50 different metals, all of which help to give it its light weight and user-friendly small size. Key economic sectors in Europe—such as automotive, aerospace and renewable energy—are highly dependent on raw materials. These raw materials represent the lifeblood of today’s industry and are fundamental for the development of environmental technologies and the digital agenda.—EC Enterprise and Industry

  • antimony
  • beryllium
  • borates
  • chromium
  • cobalt
  • coking coal
  • fluorspar
  • gallium
  • germanium
  • graphite (natural)
  • indium
  • magnesite
  • magnesium
  • niobium
  • phosphate rock
  • platinum group metals
  • rare earths (heavy)
  • rare earths (light)
  • silicon metal
  • tungsten

With 54 candidates considered, materials were evaluated largely on two criteria, economic importance and supply risk. Economic importance was determined by “assessing the proportion of each material associated with industrial megasectors” and their importance to the EU’s GDP.

Supply risk was assessed through the World Governance Indicator, which considers factors “such as voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law or control of corruption.”

Not surprisingly, the report names China as the biggest global supplier of the 20. “Several other countries have dominant supplies of specific raw materials, such as Brazil (niobium). Supply of other materials, for example platinum group metals and borates, is more diverse but is still concentrated. The risks associated with this concentration of production are in many cases compounded by low substitutability and low recycling rates.” About 90% of the critical materials’ primary supply comes from outside the EU.

The commission hopes its list will encourage European production of the materials. The list will also be considered when negotiating trade agreements and promoting R&D, as well as by companies evaluating their own supplies.

As for the future, the EC sees growing demand for all 20 critical raw materials, “with niobium, gallium and heavy rare earth elements forecast to have the strongest rates of demand growth, exceeding 8% per year for the rest of the decade.”

The commission adds that “all raw materials, even when not critical, are important for the European economy” and therefore should not be neglected.

The EC intends to update its list at least every three years.

Download the EU report on critical raw materials.

Indonesia ban rocks nickel market

January 13th, 2014

by Frik Els | January 12, 2014 | Reprinted by permission of MINING.com

Indonesia rocked the mining world on January 12, putting into effect an outright ban on nickel, bauxite and tin ore exports.

The Asian nation is the world’s premier thermal coal and tin exporter and is also a gold and copper powerhouse, but the ban on nickel and bauxite ore would have the most dramatic effect on markets.

Last week Indonesian energy and resource ministry officials scrambled to ease provisions of the raw mineral export prohibition that President Susilo Bambang Yudhoyono signed into law on January 12, the most controversial decision of his 10-year presidency.

Indonesia dominates the nickel export business, accounting for over a fifth of global supply at an estimated 400,000 tonnes of contained metal. Chinese nickel pig iron producers imported more than 30 million tonnes of nickel ore from Indonesia last year and China’s aluminium smelters rely on Indonesia for 20% of their feedstock.

According to the latest rules under the ban, base metals including copper, manganese, lead, zinc and tin will be allowed to be exported in concentrate until 2017.

This benefits producers like Freeport-McMoRan Copper & Gold NYE:FCX, which operates the world’s third-largest copper mine at Grasberg in the West Papua province and warned about a 60% drop in output should copper form part of the ban. Phoenix-based Freeport-McMoRan and Newmont Mining NYE:NEM together account for 97% of Indonesia’s copper exports.

[The ban] is the biggest supply risk facing base metals in a long time. The market has been very complacent, thinking the Indonesians would backtrack.

However against expectations of a last-minute climbdown by authorities, the nickel and bauxite ore ban, as well as the prohibition of unprocessed exports of tin, chromium, gold and silver, went into effect January 12.

FT.com quoted Gayle Berry, base metals analyst at UK bank Barclays earlier as saying the ban “is the biggest supply risk facing base metals in a long time. The market has been very complacent, thinking the Indonesians would backtrack.”

Privately owned Ibris Nickel last week announced it will cease operations in Indonesia, laying off 1,400 workers at its two-million-tonne-per-year mine. The nickel industry employs some 200,000 Indonesians across hundreds of small-scale operations.

Reuters reports the Indonesian Mineral Entrepreneurs Association said it planned to challenge the ban in the Supreme Court and Constitutional Court while almost 30,000 mine workers have been laid off, sparking protest in the capital Jakarta:

“We call on all mining workers to prepare to go on the streets and swarm the presidential palace if the government goes ahead with the implementation of the ban,” said Juan Forti Silalahi of the National Mine Workers Union in a statement on January 11.

So far the price of nickel has not reacted in a big way to the looming ban, but now all bets are off.

 

 

Three-months nickel on the LME retreated more than 20% in 2013 from opening levels of $17,450 and, after hitting a high of $18,700 in February, dropped to a four-year low in October amid an oversupplied market.

After a brief uptick in December to over $14,200, the steelmaking raw material last week fell back to the mid-$13,000s and on January 10 the contract closed at $13,725.

Even without the Indonesian ban, the prospects for nickel aren’t rosy.

Global output is forecast to rise for the first time to over two million tonnes in 2015. That’s up from 1.4 million tonnes in 2007.

Stockpiling of ore and metal in anticipation of Indonesian disruptions and the inexorable rise of nickel warehouse levels over the past two years—hitting a record 260,000 tonnes last week—have also kept prices subdued.

 

 

Indonesia, with a population of 240 million, goes to the polls for parliamentary elections in April and in July will choose a new president, so much can change over the course of the year before the true extent of the ban can be felt.

Reprinted by permission of MINING.com

Which way to the Ring of Fire?

June 13th, 2013

As Cliffs stands down, Noront and KWG propose alternate transport routes

by Greg Klein

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As Cliffs stands down, Noront and KWG propose alternate transport routes

Left: KWG Resources’ rail proposal. Right: A north-south route from the
Eagle’s Nest vicinity shows Cliffs’ road proposal, while Noront’s plan veers southwest.

 

It’s a suspension, not a cancellation. Yet the June 12 announcement from Cliffs Natural Resources dumped cold water all over Ontario’s Ring of Fire. By putting the region’s largest project on hold, the company has also shelved plans for an all-weather road to the south, a vital link some other companies were counting on to develop the McFaulds Lake area about 540 kilometres northeast of Thunder Bay. But Noront Resources TSXV:NOT quickly responded that its own projects are “still good to go” thanks to a proposed east-west road. Not to be outdone, KWG Resources TSXV:KWG pursues the feasibility of north-south rail.

Seemingly a Plan B, Noront’s east-west corridor was actually the company’s first idea. It would link the Eagle’s Nest project to Highway 808, roughly 230 kilometres southwest. But in May 2012, the Ontario government conditionally agreed to help finance the north-south route, part of Cliffs’ $3.3-billion proposal to build the Black Thor mine with road access to a new processing facility near Sudbury. On that basis, Noront used the north-south route in the base case for the September 2012 Eagle’s Nest feasibility study. Noront retained the east-west route as back-up.

A mining and exploration retrospect

Northern Ontario’s muskeg poses development challenges, as this photo from Noront Resources shows.

Prudently, it now seems. Explaining the suspension of what would have been North America’s first major chromite mine, Cliffs’ senior vice-president of global ferroalloys Bill Boor said, “Certain critical elements of the project’s future are not solely within our control and require the active support and participation by other interested parties such as government agencies and impacted first nation communities.”

Reacting to Cliffs’ suspension, Noront chairman/interim CEO Paul Parisotto said his company’s east-west proposal “balances first nations objectives, the environment and job growth. We’re confident this alternative will be attractive to each level of government, the local communities and the people who will benefit from this sensible approach.”

The route would upgrade an existing winter road to all-weather status. Among its advantages, it “avoids provincial parks, avoids areas of special interest to aboriginal groups and provides the greatest benefit to first nation communities,” the feasibility report stated. The native bands are currently served by air travel and winter road.

With Cliffs temporarily out of action, Noront emerges as the regional bigshot. Its Eagle’s Nest project achieved feasibility last September, using an 8% discount rate to calculate an after-tax net present value of $543 million and a 28% internal rate of return. With initial capital costs of $160 million, payback would come after three years of the 11-year mine life for a project showing:

  • proven reserves of 5.26 million tonnes averaging 2.02% nickel, 1.04% copper, 1.01 grams per tonne platinum, 3.45 g/t palladium and 0.19 g/t gold
  • probable reserves of 5.87 million tonnes averaging 1.38% nickel, 0.72% copper, 0.78 g/t platinum, 2.76 g/t palladium and 0.18 g/t gold.

Less than two kilometres away, the company’s Blackbird project has a March 2012 resource showing:

  • a measured category of 9.29 million tonnes averaging 37.44% chromite with a chromium-to-iron ratio of 2
  • an indicated category of 11.17 million tonnes averaging 34.36% with a Cr:Fe ratio of 1.95
  • an inferred category of 23.48 million tonnes averaging 33.14% with a Cr:Fe ratio of 1.97.

Noront PR rep Janice Mandel tells ResourceClips two levels of government know about the company’s east-west proposal. “Noront’s been talking to the provincial government and the federal government, and the environmental assessment has been underway for a while, so there have been lots of discussions. But [Ontario’s] formal proposal had been made with Cliffs.”

She added that Goldcorp TSX:G has shown interest in Noront’s proposal as a route for transmission infrastructure. The major’s fly-in/fly-out Musselwhite mine lies roughly 130 kilometres southwest of Eagle’s Nest and Blackbird.

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