Sunday 28th May 2017

Resource Clips


Posts tagged ‘diamonds’

‘Everyone’s hiring again’

May 24th, 2017

Mining headhunter Andrew Pollard says executive recruiting presages a wave of M&A

by Greg Klein

As an executive search firm, the Mining Recruitment Group might serve as a bellwether for the industry. Founder and self-described mining headhunter Andrew Pollard says, “I put together management teams for companies, I connect people with opportunities and opportunities with people.” In that role, he experienced the upturn well before many industry players did.

To most of them, the long-awaited resurgence arrived late last year. Pollard saw it several months earlier.

Mining headhunter Andrew Pollard says executive recruiting could presage a wave of M&A

“The market came back in a huge way, at least in the hiring side, early last year when my phone started ringing a hell of a lot more,” he explains. “There was a huge volume. And what I’ve found is that the available talent pool for executives shrank in a period of about six months. In January 2016, for example, I was working on a search and there was almost a lineup out the door of some really big-name people. What I’m finding now, a year and a half later, is that the available talent has almost evaporated. It’s much harder to recruit for senior positions.”

Lately his work suggests another industry development. “The major upturn I’m seeing in the market now is a huge demand for corporate development people who can do technical due diligence on projects. Over the last few years large mining companies and investment banks cut staff almost to the bone in that regard because no one was interested in doing deals or looking at acquisitions.”

Just completed, his most recent placement was for Sprott. “They had me looking for someone with a technical background who can do due diligence for their investments. In doing so I spoke with everyone on the street, from investment banks to some big name corporate development people and they all said the same thing: Everyone’s hiring again. These are people who couldn’t get job offers a year ago, now every single candidate on the short list for this last search has multiple offers from companies looking to get them. I haven’t seen that in five years.

“So that leads me to believe companies have been staffing up their corporate development teams. I see that as a major sign that you’re going to see M&A pick up in a huge, huge way, probably over the next three to six months.”

An early example would be last week’s Eldorado Gold TSX:ELD buyout of Integra Gold TSXV:ICG—“one of my best clients over the years”—in a deal valued at $590 million.

Mining headhunter Andrew Pollard says executive recruiting could presage a wave of M&A

Andrew Pollard: Executive recruiting “leads me to believe companies have been staffing up their corporate development teams.”

“I think there’s leverage for other companies to start pulling the trigger faster because they’re adding the expertise to get these things done.”

Having founded the Mining Recruitment Group over a decade ago at the age of 20, “a snotty kid” with only a single year of related experience, he’s placed people in companies with market caps ranging from $5 million to well over $200 million. Now in a position to pick and choose his assignments, Pollard’s business concentrates on “the roles that will have the most impact on a company’s future.” That tends to be CEO, president, COO and board appointments.

Last year he placed five CEOs, as well as other positions. Among those assignments, Pollard worked with Frank Giustra on a CEO search for Fiore Exploration TSXV:F and filled another vacancy for Treasury Metals TSX:TML as it advances Goliath toward production.

But the hiring surge coincides with an industry-wide recruitment challenge. Pollard attributes that to a demographic predicament complicated by mining’s notorious cyclicality.

During the 1990s, he points out, fewer people chose mining careers, resulting in a shortage of staffers who’d now be in their 40s and 50s. Greater numbers joined up during the more promising mid-2000s, only to “get spat out” when markets went south. Now Pollard gets a lot of calls to replace baby boomers who want to retire. Too many of those retirements are coming around the same time, he says, because stock losses during the downturn had forced executives to postpone their exit.

Now, with a wave of retirements coinciding with a demographic gap, Pollard sees a “perfect storm to identify the next batch of young leaders.”

But he also sees promise in a new generation. That inspired him to assemble Young Leaders, one of two panel discussions he’ll present at the International Metal Writers Conference in Vancouver on May 28 and 29.

“By talking with some very successful executives age 35 and under, I want to show that we need to look at people one generation younger, and foster and develop this talent.”

By talking with some very successful executives age 35 and under, I want to show that we need to look at people one generation younger, and foster and develop this talent.

Well, it’s either talent or a precocious Midas touch that distinguishes these panel members. Maverix Metals TSXV:MMX CEO Dan O’Flaherty co-founded the royalty/streaming company just last year, already accumulating assets in 10 countries and a $200-million market cap.

As president/CEO of Skyharbour Resources TSXV:SYH, Jordan Trimble proved adept at fundraising and deal-making while building a 250,000-hectare uranium-thorium exploration portfolio in Saskatchewan’s Athabasca Basin. Integra president/CEO Steve de Jong raised the company from a $10-million market cap in 2012 to last week’s $590-million takeout.

And, demographic gap notwithstanding, Pollard’s second panel features three other success stories, just a bit older but with lots of potential left after guiding three of last year’s biggest M&A deals. They’ll take part in the Vision to Exit discussion, which closes the conference on May 29.

Eira Thomas burst into prominence at the Lac de Gras diamond fields where she discovered Diavik at age 24. Her most recent major coup took place last year on the Klondike gold fields with Goldcorp’s (TSX:G) $520-million buyout of Kaminak Gold.

Featherstone Capital president/CEO Doug Forster founded and led Newmarket Gold, producing over 225,000 ounces a year from three Australian mines and enticing Kirkland Lake Gold’s (TSX:KL) billion-dollar offer.

Now chairperson of Liberty Gold TSX:LGD and a director of NexGen Energy TSX:NXE, Mark O’Dea co-founded and chaired True Gold Mining, acquired in April 2016 by Endeavour Mining TSX:EDV. Three other companies that O’Dea co-founded, led and sold were Fronteer Gold, picked up by Newmont Mining NYSE:NEM in 2011; Aurora Energy, sold to Paladin Energy TSX:PDN in 2011; and True North Nickel, in which Royal Nickel TSX:RNX bought a majority interest in 2014.

“We’ll be looking at how they go into deals, what their philosophy is, what’s their current reading of the market and what they’re going to do next. They each have a big future ahead of them.”

Pollard’s two panel discussions take place at the International Metal Writers Conference on May 28 and 29 at the Vancouver Convention Centre East. Pre-register for free or pay $20 at the door.

In all, the conference brings generations of talent, expertise and insight to an audience of industry insiders and investors alike.

Read more about the International Metal Writers Conference.

Margaret Lake, Arctic Star begin geophysical search for NWT diamonds

May 9th, 2017

by Greg Klein | May 9, 2017

Modern geophysics and a new approach come to a property with diamondiferous kimberlites in the Northwest Territories’ prolific Lac de Gras region, as Margaret Lake Diamonds TSXV:DIA and Arctic Star Exploration TSXV:ADD start work on their Diagras JV. Expected to finish in mid-May, the program consists of ground gravity, magnetics and Ohm Mapper EM.

Margaret Lake, Arctic Star begin geophysical search for NWT diamonds

Margaret Lake and Arctic Star hold a 60% and 40% stake respectively, with Margaret Lake acting as project operator.

The companies hope to find non-magnetic evidence that was missed in the 1990s when De Beers flew airborne surveys that identified the property’s magnetic kimberlites.

Diagras hosts 13 known kimberlites, most of them diamondiferous, according to historic data. The property’s Jack Pine kimberlite shows “multiple phases with different geophysical responses,” the JV stated. “It is hoped that our planned surveys will reveal similar geology around the other pipes. There is also a good chance to find new kimberlites using these new ground geophysical techniques.”

In November the JV attributed those techniques to Kennady Diamonds’ (TSXV:KDI) progress at Kennady North, Lac de Gras’ most advanced exploration project.

Results of the Diagras program will be considered for follow-up drilling.

In January Arctic Star applied for a drill permit for its 100%-held CAP niobium-tantalum-REE property in north-central British Columbia. The company raised over $1.47 million in private placements that closed late last year.

China’s “disgusting” behaviour disrupts conflict diamonds meeting

May 3rd, 2017

by Greg Klein | May 3, 2017

An indigenous welcoming ceremony at a meeting to address illicit gems might command dignified respect. But not on May 3, not from the Chinese delegates.

The scene was a Perth conference of the Kimberley Process hosted by Australia’s foreign minister. Australia acts as this year’s chair of the group formed in 2000 by governments, industry and activists to fight the trade of rough diamonds used to undermine legitimate governments.

China’s “disgusting” behaviour disrupts conflict diamonds meeting

“It was disgusting,” the Sidney Morning Herald quoted an unnamed senior Australian official. “It was extraordinary, so uncalled for and so inappropriate, and so disrespectful.” The paper said the Chinese government delegation shouted over the indigenous speaker, forcing proceedings to a halt. Order wasn’t maintained until after Taiwanese observers were “ejected.”

The SMH reported that the Chinese “used the microphone at their table to speak over the chairman of the meeting, senior Department of Foreign Affairs and Trade official Robert Owen-Jones, as he tried to introduce the foreign minister Julie Bishop and the indigenous welcome ceremony, attendees said. The Chinese delegation said they had a point of order and demanded to know if everyone in the room had been ‘formally invited.’ The interruptions continued until the agenda was changed to address the so-called ‘point of order’ as the first item. Only then was the welcome to country permitted to go ahead, followed by Ms. Bishop’s speech.”

But more outbursts erupted later, according to the article. “Fairfax Media understands that another session later in the morning involving a panel discussion with executives from mining companies was abandoned altogether because of continual interruptions by various African delegations in support of the Chinese position.”

The Australian Broadcasting Corporation reported that an attendee said “he had heard the Chinese were sending WhatsApp messages to their allies in the room, asking for support.”

If Australia had decided not to give into Chinese pressure on Monday I would be mightily surprised if China stopped buying Australia’s natural resources as a result because China desperately needs them for its economical development.—J. Michael Cole, quoted by ABC

The SMH stated a foreign affairs spokesperson said Australia had invited the Rough Diamond Trading Entity of Chinese Taipei “in line with earlier precedent.

“Continual disruption to the proceedings in the opening session was regrettable and the Australian government’s concerns with respect to the behaviour of Chinese delegates have been raised with the Chinese ambassador,” she added.

ABC spoke with J. Michael Cole of the University of Nottingham’s China Policy Institute, who noted that Australia’s one of the countries economically dependent on China. But he added, “I also want to emphasize that China needs those countries as much as those countries need China.

“If Australia had decided not to give into Chinese pressure on Monday I would be mightily surprised if China stopped buying Australia’s natural resources as a result because China desperately needs them for its economical development.”

Having loved and lost, a man offers to sell a diamond engagement ring that he insists was worn by Satan herself

April 27th, 2017

…Read more

The Devil owned this diamond and now you can too

March 15th, 2017

by Greg Klein | March 15, 2017

Provenance sometimes sways the price of diamond jewelry, so whenever possible sellers will emphasize an esteemed previous owner. But one man’s selling a stone he insists was worn by Satan herself.

She’s his ex.

The devil owned this diamond and now you can too

The Devil’s diamond: Be sure to read the disclaimer.

The rock was mounted on her engagement ring, which he offered after three years of courtship. Only then did her true identity reveal itself. As he explains, her “rage, it boiled, her eyes glazed over and her head span 360 degrees on a daily basis and she spewed venomous insults toward my aching heart.”

Possibly after breaking an especially big mirror, he endured seven years before walking out. “Now I’m happy,” he declares.

Offering no details on colour, clarity or cut, the seller simply describes the item as one-quarter carat on a gold ring, “size fat.” He does provide this disclaimer: “Although worn by Satan herself it does not possess any magical powers or any black magic. Cannot guarantee it’s 100% safe to be worn by those of faith.”

He adds: “Serious offers only.”

Past ownership by royalty, aristocrats or celebrities can enhance a diamond’s value. Last May the 14.62-carat Oppenheimer Blue broke auction records with a $58.25-million price possibly influenced by its association with De Beers bigshot Sir Philip Oppenheimer. The previous month, however, a 9.54-carat stone associated with a phenomenally famous actor-turned-diplomat disappointed auctioneers. Having hoped for $25 million to $35 million, Sotheby’s rejected a $22-million bid for the Shirley Temple Blue diamond.

See the Devil’s diamond ad.

See an infographic with some quirky details about the world’s most famous diamonds.

Global survey and diamond discovery raise Manitoba’s mining profile

March 7th, 2017

by Greg Klein | March 7, 2017

Roughly 170 crow-flying kilometres southeast of Thompson, prospectors’ perseverance has paid off in Manitoba’s first-ever diamond discovery. Making the announcement at PDAC on March 6, provincial minister of growth, enterprise and trade Cliff Cullen couldn’t resist mentioning Manitoba’s #2 worldwide ranking in the latest Fraser Institute survey of mining jurisdictions, up from #19 the previous year.

Global survey and diamond discovery raise Manitoba’s mining profile

“The world’s mining sector is taking notice of Manitoba’s mineral resource potential and our business and investment-friendly environment,” he said. “Our government is very pleased by these recent developments and will continue to create the welcoming conditions necessary for the attraction of investment in our mineral resources.”

The Manitoba Prospectors and Developers Association credits the discovery—of microdiamonds, but in bedrock—to three of its members, Mark Fedikow, John Lee and Harold Westdal, along with Robin Day of Alberta and the Manitoba Geological Survey, “especially Scott Anderson.” The four prospectors call themselves the Lynx Consortium.

Ruth Bezys, Manitoba PDA president and Fedikow’s wife, told the Winnipeg Free Press the consortium will likely option their claim to a company with more financial resources.

Mining contributes about $1.5 billion or 2.7% to Manitoba’s GDP, sustaining about 3,200 jobs, Cullen told the conference.

Diggers shed new light on Biblical fight for strategic metals

January 19th, 2017

by Greg Klein | January 19, 2017

Fable and fiction have often associated King Solomon’s mines with diamonds or gold. But Israeli archeologists say they’ve gained a new perspective on a 10th century BC site that produced the critical element of its time—copper.

An ancient smelting facility in southern Israel’s Timna Valley was discovered in 1934 but recent excavations have revealed a military fortification, shedding new light on long-distance trade and wars fought over a strategic metal.

Diggers shed new light on the Biblical fight for strategic metals

An aerial view shows remains of the gatehouse, indicating
a “substantial investment in deterrence and defence.”
Secondary metallurgical processes took place nearby.

“While there is no explicit description of ‘King Solomon’s mines’ in the Old Testament, there are references to military conflicts between Israel and the Edomites in the Arava Valley,” said archeologist Erez Ben-Yosef in a statement from Tel Aviv University. “According to the Bible, David travelled hundreds of miles outside of Jerusalem and engaged in military conflict in the desert—striking down ‘18,000 Edomites in the Valley of Salt.’ Now, having found evidence of defensive measures—a sophisticated fortification—we understand what must have been at stake for him in this remote region: copper.”

The reddish metal “was a rare product and very challenging to produce,” he continued. “Because copper—like oil today, perhaps—was the most coveted commodity, it landed at the very heart of military conflicts. The discovery of the fortification indicates a period of serious instability and military threats at that time in the region.”

Focus of ongoing study by Tel Aviv University, the Timna Valley hosts a number of ancient smelting operations and thousands of mine shafts.

“The historical accuracy of the Old Testament accounts is debated, but archaeology can no longer be used to contradict them,” Ben-Yosef added. “On the contrary, our new discoveries are in complete accordance with the description of military conflicts against a hierarchical and centralized society located south of the Dead Sea.”

Arctic Star looks to B.C. for rare metals and rare earths

January 17th, 2017

by Greg Klein | January 17, 2017

A previously acquired property gets new attention as Arctic Star Exploration TSXV:ADD applies for a drill permit to search for niobium, tantalum and rare earth elements in central British Columbia.

Arctic Star looks to B.C. for rare metals and rare earths

Field work during 2010 on the 2,825-hectare CAP project found 481 to 981 parts per million niobium, 1,125 to 3,191 ppm zirconium, over 100 ppm lanthanum, over 100 ppm cerium and over 50 ppm neodymium. Two historic, non-43-101 samples returned strongly anomalous results of 0.13% and 0.1% rare earth elements, the company stated.

A circular magnetic anomaly of about three to five kilometres’ diameter could indicate a carbonatite or similar intrusion at depth, Arctic Star added. “Carbonatite-related deposits are a major host for rare metals, such as niobium and tantalum, and rare earth elements.”

Located about 80 kilometres from Prince George, CAP can be reached by logging roads during the summer and helicopter year-round.

In December the company closed a second tranche of financings totalling $1.47 million, including $300,000 of flow-through earmarked for CAP.

In November Arctic Star announced a JV with Margaret Lake Diamonds TSXV:DIA on their newly compiled Diagras property in the Northwest Territories’ diamondiferous Lac de Gras region.

Diamonds—2016 glitter in review

December 22nd, 2016

by Greg Klein | December 22, 2016

The stones began the year still mired in their 2015 slump, in which rough prices reportedly fell 15%. The two biggest players, representing nearly two-thirds of global production, didn’t exactly agree on strategy. De Beers cut production and lowered prices while Alrosa initially boosted production, held prices stable and stockpiled some output. By April De Beers raised prices and Alrosa lowered production. The following month had De Beers talking about a “fragile recovery.”

Diamonds—2016 glitter in review

Sales records for polished got pulverized, though. In May Sotheby’s raked in $32 million for the 15.38-carat Unique Pink in a jewelry sale that totalled a world record $175.1 million. The next day Christie’s scooped up $58.25 million for the 14.62-carat Oppenheimer Blue, “a new record price for any gemstone and per carat.”

Rough rode roughshod over records, too. The week before Sotheby’s and Christie’s big sales, Lucara Diamond TSX:LUC got $63.11 million for its fresh-from-the-mine 812.77-carat Constellation. High expectations led to disappointment in late June, however, when the company rejected a $61-million offer for its 1,109-carat Lesedi La Rona rough stone, the second-biggest diamond ever found. Lucara wanted at least $70 million.

As for Canadian diamond mining, it thrived.

A 100-million-carat production milestone brought celebrations to Diavik, the Northwest Territories JV of Rio Tinto NYSE:RIO and Dominion Diamond TSX:DDC. In July Dominion finally decided to add the Jay pipe and its 78.6 million carats to the company’s majority-held Ekati mine.

The year brought new mines to Canada too. Gahcho Kué, the world’s largest new diamond producer in 13 years, was officially opened in September by partners De Beers and Mountain Province Diamonds TSX:MPV. October saw Stornoway Diamond TSX:SWY do the same at Renard, Quebec’s first diamond mine. It reached commercial production just days before Christmas.

Looking at potential mines-to-be, Peregrine Diamonds TSX:PGD took its Chidliak project on Baffin Island to PEA in July. In Saskatchewan’s Fort à la Corne region, meanwhile, Shore Gold TSX:SGF continued working on a feasibility update for its majority-held Star-Orion South project. Back in the NWT, Kennady Diamonds TSXV:KDI completed its maiden resource in December.

The company’s Kennady North project sits in the same Lac de Gras region hosting Ekati, Diavik and Gahcho Kué. November marked the 25th anniversary of the Chuck Fipke/Stewart Blusson Ekati discovery that triggered the world’s biggest staking rush, brought diamond mining to Canada and helped transform the diamond industry.

In December the vertically integrated company Almod Diamonds announced plans to broaden the NWT diamond industry, the backbone of the territorial economy, by re-opening a Yellowknife cutting and polishing facility.

A few days after that announcement, the allure of diamonds played out differently in an Atlanta department store. Eighty-six-year-old Doris Payne, a determined, unrepentant and often unsuccessful diamond thief, wracked up another arrest. She’s been stealing stones for over sixty years.

With maiden resource complete, Kennady Diamonds sees PEA late next year

December 14th, 2016

by Greg Klein | December 14, 2016

It’s “quite possibly a record timeframe in the history of Canadian diamond exploration,” according to Kennady Diamonds TSXV:KDI president/CEO Rory Moore. One of several small dykes discovered by the De Beers/Mountain Province Diamonds TSX:MPV JV in 2000, the Kelvin kimberlite wasn’t drilled until 2012. By that time Mountain Province, preoccupied with the adjacent Gahcho Kué, had created Kennady to investigate the neighbouring turf. On December 12 the spinout released Kelvin’s resource, the first such estimate for the 71,000-hectare Kennady North property.

With maiden resource complete, Kennady Diamonds sees PEA late next year

Kennady has a busy year ahead, with plans for resource
estimates on two additional kimberlites prior to PEA.

Using a one-millimetre bottom cutoff, the all-indicated resource shows 8.5 million tonnes averaging 1.6 carats per tonne for 13.62 million carats of diamonds. Average value comes to $63 per carat.

The deposit extends to a depth of 510 metres, with about 85% within a potential open pit to 330 metres’ depth and the rest a possible underground mine.

It’s been a productive four years and five months since Kennady first put rigs to work. The resource considered 175 holes totalling 40,041 metres, microdiamond samples totalling 20.23 tonnes. a mini-bulk sample of 44.8 tonnes and two more bulk samples totalling 1,067 tonnes. The bulk samples gave up 2,262 carats for valuation.

Announced last month, Antwerp’s verdict—actually two separate valuations that arrived at the same amount—came to an average $52 per carat. But Kennady emphasized the lopsided values of bigger diamonds, including a 2.84-carat stone valued at $2,640 per carat.

Moore pointed to a “similar trend” at Gahcho Kué, five kilometres away. “The five highest-value Kelvin diamonds represent 1% of the sample weight but 20% of the total value. This trend is a key determinant of overall value.”

A PEA’s now scheduled for late 2017 and would incorporate resource estimates to come from the Faraday 2 and 3 kimberlites, which will undergo bulk sampling this winter. Kennady also plans geophysics over 4,233 hectares acquired in August just south of Gahcho Kué. The company will consider exploration drilling following the bulk samples.

Earlier this month Kennady, along with Athabasca Basin uranium standout NexGen Energy TSX:NXE, shared the 2016 Exploration Company of the Year award at Mines and Money London.