Sunday 21st July 2019

Resource Clips


Posts tagged ‘greenland’

Senkaku revisited

May 29th, 2019

China-U.S. trade tactics highlight rare earths peril and potential

by Greg Klein | May 29, 2019

China-U.S. trade tactics highlight rare earths peril and potential

 

They’re vital to several categories of modern essentials including military defence. But rare earths have themselves become weapons in an escalating conflict between China and the U.S. Despite Washington’s heightened awareness of its critical minerals conundrum, the U.S., like the rest of the non-Chinese world, remains almost completely dependent on its rival-turned-enemy for the rare earths that China threatens to cut off.

Among recent hints, comments and implied threats was last week’s well-publicized visit to a Chinese RE plant by President Xi Jinping and his top trade negotiator, where the leader reportedly steeled his country’s resolve with talk of an impending “Long March.” Additionally significant and non-cryptic code came in a May 29 admonition from the state-run People’s Daily: “Don’t say I didn’t warn you.”

China-U.S. trade tactics highlight rare earths peril and potential

Northern Minerals’ Browns Range pilot plant readies
a Western Australia project for Chinese customers.

If a full-blown trade war’s imminent, it’s not without irony. In a change of plans the U.S. has dropped rare earths from a long list of tariff-attached imports, tacitly acknowledging its dependency on China. China did the opposite, increasing its tariff from 10% to 25% on RE imports from America, a small portion of China’s supply but nevertheless an increase to the cost of its trade war weaponry.

The 17 elements comprise essential components for a host of modern necessities including phones, computers and other communications and electronic devices, electric vehicles, batteries, renewable energy and military defence.

China already mines over 70% of global supply, according to 2018 data from the U.S. Geological Survey, and that doesn’t include illegal Chinese production. The U.S. relies on China for 80% of RE compounds and metals. America imports another 11% from Estonia, France and Japan, but that stuff’s “derived from mineral concentrates and chemical intermediates produced in China and elsewhere,” the USGS added.

The risks of an all-out trade war might be demonstrated by the 2010 East China Sea conflict, where China and Japan both claim the islands of Senkaku. When a Chinese fishing boat captain felt emboldened to twice ram a Japanese naval vessel, Japan arrested him. Within days, China banned all rare earths exports to Japan, crippling its globally important but RE-dependent manufacturers. China also imposed heavy cutbacks and duties on exports to other countries.

China-U.S. trade tactics highlight rare earths peril and potential

A Greenland Minerals MOU would commit the
proposed Kvanefjeld mine’s total RE production to China.

Desperate for RE supply, some non-Chinese manufacturers relocated to China. Meanwhile Western resource companies strove to develop alternative supplies. By 2013 two new mines reached production, Lynas Corp’s Mount Weld in Western Australia and Molycorp’s Mountain Pass in California. The following year the World Trade Organization ordered China to drop its export restrictions on rare earths, as well as tungsten and molybdenum.

China complied with a vengeance, flooding the world with cheap RE supply. America’s WTO victory proved Pyrrhic as a burgeoning non-Chinese supply chain failed to compete. The most salient casualty was Mountain Pass, which suspended operations during 2015 bankruptcy proceedings.

The mine resumed production in early 2018 under new owner MP Materials. But with China’s Shenghe Rare Earth Company a minority shareholder, North America’s only RE producer exports its entire output to China.

Lynas, meanwhile, remains committed to serving non-Chinese markets through a non-Chinese supply chain. But skeptics might consider the company’s strategy precarious. Plans announced last week include a refinery in Texas that’s merely at the MOU stage, an AU$500-million financing commitment that appears inadequate to the company’s needs and an unconvincing proposal to meet a Malaysian ultimatum with alternative ideas.

Home to Lynas’ refining and separation facility, Malaysia insists the company remove over 450,000 tonnes of radioactive waste by September or face a shutdown. The country also wants future Mount Weld material rendered non-radioactive prior to arrival. (Update: On May 30 Malaysia’s prime minister said the government will likely allow Lynas’ plant to continue operation, according to Reuters.)

China-U.S. trade tactics highlight rare earths peril and potential

At a northern Quebec rare earths deposit, Commerce
Resources’ Ashram project moves towards pre-feasibility.

An AU$1.5-billion takeover bid from deep-pocketed giant Wesfarmers might offer a made-in-Australia solution. But Lynas has so far held itself aloof.

The CEO’s commitment to non-Chinese markets, however, differs from some other Australian companies. ASX-listed Northern Minerals, self-described as “the first and only meaningful producer of dysprosium outside of China,” has committed the total production of its Western Australia Browns Range project to China, apparently at the behest of minority shareholder Huatai Mining. Last August ASX-listed Greenland Minerals signed an offtake MOU with majority shareholder Shenghe Resources, which would give China the proposed Kvanefjeld mine’s total RE production.

Technology metals expert Jack Lifton emphasizes the need for non-Chinese resources and expertise: “If we don’t reconstitute a total American supply chain, if the Europeans don’t do the same, for the critical materials like rare earths, cobalt, lithium, we’re going to be out of luck,” he told ResourceClips.com.

Heightened awareness in Washington led to 35 minerals getting a formal “critical” classification, a prelude to last year’s Secretary of Defense study calling for government initiatives to encourage domestic supply chains. More recently, a bipartisan group of U.S. senators proposed legislation to prod the country into action.

That approach rankles those who prefer laissez-faire solutions. Moreover government meddling in the form of trade wars can backfire, libertarians believe. As Rick Rule said last week, “If the Chinese decided to obviate their competitive advantage with some stupid political ploy, they would find themselves with a much smaller proportion of the global market.”

Many investors seem to have agreed. Following China’s May 29 rhetoric, stock prices surged for advanced-stage RE projects.

Turbulent times for Lynas

May 17th, 2019

Rare earths provide a cautionary tale about supply chain weaknesses

by Greg Klein | Updated May 21, 2019

Rare earths provide a cautionary tale about supply chain weaknesses

One of the world’s biggest supplies of magnet metals
undergoes separation at Lynas’ Malaysian facility. (Photo: Lynas Corp)

 

How often does an investor presentation draw such keen interest from non-investors?

No doubt representatives from a number of governments and industries watched intensely on May 21 as Lynas CEO/managing director Amanda Lacaze accentuated her company’s “will to win.” Lynas has plans in place and funding en route to overcome what previously appeared to be an unattainable ultimatum. Far from becoming a takeover target, let alone a jurisdictional fatality, the miner expects to continue building a rare earths supply chain “focused on rest-of-the-world markets, that is non-Chinese markets.”

That was her message, and if stirring delivery could convince listeners, Lacaze made her case. But insufficient details cast a pall of uncertainty. Clearly the company can’t meet a September 2 deadline to remove over 450,000 tonnes of radioactive waste from Malaysia and thereby avert a processing plant shutdown in that country which would render useless the company’s Mount Weld mine in Western Australia.

Rare earths provide a cautionary tale about supply chain weaknesses

One of the world’s richest rare earths deposits, Mount Weld boasts reserves expected to give over 25 additional years of production at 22,000 tonnes of rare earth oxides annually. Included is an especially bountiful distribution of the magnet metals neodymium and praseodymium. Lynas concentrates ore in WA before shipping material to Malaysia for refining and separation. But while rare earths metallurgy has stymied some other non-Chinese operations, this facility has operated successfully since 2012.

At least it did so under Malaysia’s previous government. Its first electoral defeat since the country’s 1957 independence brought to office a party long opposed to Lynas’ operation in Kuantan. Concerns about waste containing thorium and uranium brought to mind a Malaysian RE refinery operated by Mitsubishi up to 1992. The plant closed down after an increase in leukemia and birth defects that critics attributed to the operation’s waste.

Following an environmental review of Lynas’ facility late last year, the new government delivered two formidable demands: Ensure that all material brought into the country has been rendered non-radioactive. And remove seven years of accumulated radioactive tailings from the country by September 2. Failure to do so will shut down the plant, the government warned.

An enormous logistical problem notwithstanding, Lacaze and her “dream team” told investors they have solutions backed by a AU$500-million “capital envelope” from senior lender Japan Australia Rare Earths (JARE) and the Japanese trading company Sojitz Corp.

“Of course we cannot do this on the smell of an oily rag, much as we might like to,” Lacaze acknowledged.

Rare earths provide a cautionary tale about supply chain weaknesses

Lynas managing director Dato’ Mashal Ahmad at the
podium, CEO Amanda Lacaze holding the microphone
at the company’s May 21 shareholder presentation.

A new cracking and leaching plant to be built in WA would “detox” Mount Weld material. Plans to pour money into Malaysia to upgrade the company’s Kuantan facility also sounded an optimistic note. But accumulated waste remains troublesome.

As managing director Dato’ Mashal Ahmad explained, the company will counter the ultimatum by asking the government to choose one of two options: Allow Lynas to treat the waste by producing a type of fertilizer, or allow Lynas to build another waste depository in Malaysia. The company already has four years of research backing Option 1. As for Option 2, “which Lynas is prepared to do anytime,” the company has already chosen three potential sites.

To those skeptical that Malaysia would accept the proposals, Ahmad said the environmental review, which hasn’t been officially translated, pronounced the Kuantan operation safe. Politicians, not the report’s authors, issued the ultimatum, he maintained. Discussions with the government continue and another decision will come from the entire government, not individual politicians, Lacaze added. Based on what she termed “relatively constructive” public comments from Prime Minister Mahathir Mohamad, she expressed “confidence in the outcome.”

An entirely different possibility for Lynas arose last March when Wesfarmers launched a AU$1.5-billion bid for the miner. One of Australia’s largest listed companies and a multi-billion-dollar conglomerate with interests including chemicals, energy, fertilizers and industrial products, Wesfarmers imposed a daunting condition: Kuantan must retain a valid permit for a “satisfactory period following completion of the transaction.” 

Lynas spurned the offer, provoking talk from Wesfarmers of going hostile. Undeterred, and the day before proclaiming its “will to win,” Lynas joined one of its customers, downstream rare earths processor Blue Line Corp, to announce a memorandum of understanding to build an RE separation plant in Texas. The proposed joint venture “would be the only large-scale producer of separated medium and heavy rare earth products in the world outside of China,” the companies stated.

Of course the Blue Line MOU lacks certainty, as does the strategy of presenting options in the face of a government ultimatum. $500 million isn’t all that much. To industry observers, the predicament once again emphasizes the need to create non-Chinese supply chains.

Rare earths provide a cautionary tale about supply chain weaknesses

A founding principal of Technology Metals
Research LLC and a senior fellow at the
Institute for Analysis of Global Security,
Jack Lifton has over 55 years’ experience
with technology metals.

Speaking with ResourceClips.com the week before Lynas’ May 20-21 announcements, Jack Lifton discussed the urgency of addressing critical minerals challenges.

A chemist specializing in metallurgy, a consultant, author and lecturer focusing on rare earths, lithium and other essentials that he labels “technology metals,” Lifton was one of four scientists hired by the previous Malaysian government to evaluate the Kuantan facility prior to its initial permit.

Wesfarmers “would have the money and the time” to solve Lynas’ problems, he said. “A $38-billion company can spend a year fixing problems and stay in business. If Lynas were shut down for a year, I think that would be the end of it.”

Earlier this month Wesfarmers offered AU$776 million for ASX-listed Kidman Resources, which shares a 50/50 JV with Sociedad Quimica y Minera de Chile SA (SQM) on the advanced-stage Mount Holland lithium project in Western Australia.

“Wesfarmers clearly knows all the problems with Lynas but they’re still interested in buying it,” Lifton pointed out.

The possibility of a Chinese buy-out, on the other hand, could meet opposition from either of two governments. Malaysia’s previous administration feared Chinese influence, Lifton says.

As for Australia, “I do not think that the government, as it will be constituted after this election, will allow the Chinese to buy what is basically the largest high-grade deposit of magnet rare earths on the planet,” he says. Even so, Chinese control could eliminate the Malaysian problem. “China has immense facilities and excess capacity for treating ore like that. They wouldn’t need the Malaysian plant, not at all.”

Control need not mean total ownership. Following Molycorp’s bankruptcy, California’s Mountain Pass mine quietly resumed production last year under MP Materials. With China’s Shenghe Rare Earth Company a minority shareholder, North America’s sole rare earths producer exports all its output to China.

Shenghe Resources comprises the world’s second-largest RE company by output. It holds a majority stake in ASX-listed Greenland Minerals, which describes its Kvanefjeld polymetallic deposit as having “potential to become the most significant Western world producer of rare earths.” Last August the companies signed an offtake MOU for the proposed mine’s total RE production.

Huatai Mining, a subsidiary of Chinese coal trader Shandong Taizhong Energy, holds 15.9% of ASX-listed Northern Minerals, which plans to become the “first significant dysprosium producer outside China” at the Browns Range project in Western Australia.

“Everything from Browns Range is now going to China for refining and use,” Lifton notes. “My understanding is that’s what’s going to happen in Greenland.”

Neither Greenland nor Northern can handle separation, he explains. “They can concentrate the ore, but where are the facilities to separate individual rare earths from the mixed concentrate? They are, today, overwhelmingly in China. The Chinese have an advantage in excess refining capacity.”

While Lifton thinks Malaysia would welcome Japanese ownership of Lynas, the Japanese no longer have processing abilities. They’re also burdened by Mitsubishi’s legacy.

“China does not, to the best of my knowledge, have ore as rich as Mount Weld. I don’t know of any other deposit on earth that’s so high-grade and well-distributed with magnet materials. So anyone who has processing would love to have that.”

If we don’t reconstitute a total American supply chain, if the Europeans don’t do the same, for the critical materials like rare earths, cobalt, lithium, we’re going to be out of luck.—Jack Lifton

Such a fate is now pure speculation but should Lynas face a Sino-scenario, it would only intensify a trend well underway, he adds. “They already have the largest RE industry on the planet and they’re buying RE, cobalt and other critical assets in Greenland, Africa, Australia, South America.

“If we don’t reconstitute a total American supply chain, if the Europeans don’t do the same, for the critical materials like rare earths, cobalt, lithium, we’re going to be out of luck. The Chinese in my opinion are already self-sufficient in rare earths, lithium and cobalt. They have mines all over the world that they own and operate, they have the bulk of chemical processing. They’re going to take care of their domestic needs first, and then if they want to export, they’ll control the price, the supply, and they do control the demand because at this time about 60% of all world metals goes to China.

“In America there’s a lot of talk now about critical minerals and some people are saying we need ‘a conversation’ on the subject. So while we think about it and have conversations, the Chinese are setting themselves up for the rest of this century.”

Athabasca Basin and beyond

August 2nd, 2014

Uranium news from Saskatchewan and elsewhere for July 26 to August 1, 2014

by Greg Klein

Next Page 1 | 2

Fission off to a scintillating summer at Patterson Lake South

Fourteen widely mineralized holes released July 28 mark Fission Uranium’s (TSXV:FCU) first summer results from Patterson Lake South. All tested R780E, the middle and largest of five zones along a 2.24-kilometre potential strike. Two holes extended the eastern part of the zone about 50 metres north. Among other PLS news is a new technique that allows barge-based angle drilling to better determine the mineralization’s size and shape. And new technology—a scintillometer can now measure radioactive drill core up to 65,535 counts per second, replacing a model that maxed out at 9,999 cps.

Scintillometer readings, as the usual disclaimer relates, are no substitute for assays, which are pending. But the brand new gizmo shows measurements that would have been well off scale for the older device. Some examples from Fission’s multi-page chart include:

Hole PLS 14-219

  • <300 to 33,000 counts per second over 17 metres, starting at 160 metres in downhole depth
Uranium news from Saskatchewan and elsewhere for July 26 to August 1, 2014

PLS 14-220

  • <300 to 15,000 cps over 32 metres, starting at 59.5 metres

  • <300 to 30,000 cps over 14.5 metres, starting at 97 metres

  • <300 to 41,000 cps over 11 metres, starting at 163 metres

PLS 14-223

  • <300 to 41,000 cps over 13.5 metres, starting at 176.5 metres

PLS 14-224

  • <300 to 42,000 cps over 19.5 metres, starting at 128.5 metres

PLS 14-225

  • <300 to 30,000 cps over 39 metres, starting at 145.5 metres

PLS 14-229

  • <300 to 31,300 cps over 27.5 metres, starting at 96.5 metres

One interval in hole PLS 14-230 came close to maxing out the new scintillometer:

  • <300 to 65,500 cps over 24 metres, starting at 229 metres

True widths weren’t provided.

Forty-three holes of the 63-hole, 20,330-metre summer program will attack the project’s main mineralized trend in hopes of extending it north, south and along strike to the east, as well as delineating the December resource. In the meantime, the market awaits assays for the last 24 holes from 92 sunk last winter.

Denison steps out at Wheeler’s Gryphon zone

On the southeastern Athabasca Basin, step-out drill results from Denison Mines’ (TSX:DML) Wheeler River showed some strong numbers, although possibly not as strong as the company had hoped. Out of 10 holes reported July 29 from the project’s Gryphon zone, seven were 50-metre step-outs from two previously announced holes: Gryphon discovery hole WR-556, which assayed 15.3% U3O8 over 4 metres, and WR-560, which showed 21.2% over 4.5 metres.

The latest batch was provided as radiometric-equivalent uranium from a downhole probe. Lab assays are pending. Some highlights showed:

Hole WR-564

  • 0.8% uranium oxide-equivalent (eU3O8) over 20.5 metres, starting at 736.3 metres in downhole depth
  • (including 3% over 2.3 metres)
  • (also including 4.5% over 1 metre)

WR-567

  • 1.1% over 2.7 metres, starting at 727.2 metres

WR-569A

  • 3.1% over 3 metres, starting at 662.6 metres

  • 9.4% over 3.7 metres, starting at 679.3 metres

  • 8.1% over 1.1 metres, starting at 692.3 metres

  • 5.3% over 5.9 metres, starting at 702.1 metres

  • 3% over 2 metres, starting at 724 metres

WR-571

  • 2.3% over 6.5 metres, starting at 755.8 metres
  • (including 10.9% over 1 metre)
  • (also including 1.9% over 1.1 metres)

True widths were estimated at approximately 75%. Three other step-outs failed to find significant mineralization, as did two extensions of historic holes.

Denison described the area as a zone of mineralization above 1% eU3O8 enveloped by lower-grade stuff. “The higher-grade mineralization plunges to the northeast and has now been drilled over 150 metres in the along-plunge direction and over 50 metres across the plunge,” the company added. “Mineralization is open down plunge to the northeast, up plunge to the southwest and across the plunge at depth.”

Last March’s Gryphon discovery diverted attention from Wheeler River’s Phoenix deposit three kilometres southeast. Nevertheless, in June Denison announced a 34% increase in Phoenix indicated resources.

Wheeler’s agenda calls for another 10 holes at Gryphon this summer. Denison acts as operator and holds 60% of the 12,333-hectare property, along with Cameco Corp TSX:CCO (30%) and JCU Canada Exploration (10%).

The previous week Denison announced a $13.04-million bought deal that’s expected to close around August 12. In June the company closed its acquisition of International Enexco. Denison plans to spend $15 million on Canadian exploration this year.

Next Page 1 | 2

Quebec uranium inquiry attacked by 70 geologists and engineers

June 10th, 2014

by Greg Klein | June 10, 2014

Quebec uranium inquiry attacked by 70 geos and engineers

Now stalled by Quebec’s moratorium on uranium, Strateco’s Matoush project has a January 2012
resource estimate of 7.78 million pounds U3O8 indicated and 19.22 million pounds inferred.

 

This story has been updated and moved here.

Athabasca Basin and beyond

March 9th, 2014

Uranium news from Saskatchewan and elsewhere for March 1 to 7, 2014

by Greg Klein

Next Page 1 | 2

Fission Uranium merges two zones, narrows gap between two others at Patterson Lake South

Fission Uranium merges two zones, narrows gap between two others at Patterson Lake South

Fission Uranium has four of its five rigs trying
to fill the gaps in the now six-zone PLS project.

With several zones stretched along a 1.78-kilometre potential strike at Patterson Lake South, Fission Uranium TSXV:FCU obviously wants to find one big, shallow, high-grade deposit. That dream came closer to reality with radiometric results released March 5 and 7. Zones R780E and R945E are now one, forever intertwined, while the gap between two zones to the west has been narrowed.

Scintillometer results from 20 holes released March 5 show mineralization at depths as shallow as 54 metres and as deep as 459 metres. Thirteen holes showed off-scale intervals, reaching the maximum 9,999 counts per second on the hand-held device that measures drill core for gamma radiation. Scintillometer readings are no substitute for assays, which are pending.

Apart from the hope of merging more zones—the goal of this winter’s drill program—Fission Uranium sees expansion potential. The best hole of this batch was the most easterly of the newly merged zone, which “bodes extremely well for high-grade expansion to the east.”

Two days later Fission Uranium unveiled scintillometer results for four more holes, each from a different zone, starting with R780E and moving west to the discovery zone. The interval nearest to surface started at 51 metres and the deepest ended at 276 metres. Intervals from one hole showed a total of 16.18 metres of off-scale radioactivity, while another hole gave up an off-scale composite of 2.65 metres. The gap between R390E and R585E has been narrowed to about 60 metres.

With 36 of the planned 85 winter holes complete, Fission Uranium claims a 100% hit rate. The company has one rig exploring outside the mineralized trend and four others attacking the gaps between these six zones:

The discovery zone, R00E, has a 165-metre strike and a lateral width up to about 45 metres. About 135 metres east, R390E has a 255-metre strike and a lateral width up to about 50 metres. Sixty metres east again, R585E has a 75-metre strike and a lateral width up to about 20 metres. About 105 metres east, R780E now has an approximately 270-metre strike, as a result of subsuming R945E. The lateral width reaches up to about 90 metres.

R780E’s geology “is similar to other zones,” Fission Uranium stated, “consisting of mineralization primarily associated with sequences of steeply south-dipping pelitic lithology with localized mylonites and cataclasites.”

Two other zones at the eastern and western extremities, R1155E and R600W, bring the potential strike to 1.78 kilometres.

Two weeks earlier Fission Uranium released lab assays from R585E that showed the project’s best hole ever—or maybe that should be “so far.”

Update: On March 10 Fission released its “second-best” radiometric results from PLS. Read more.

NexGen announces $10-million bought deal for Athabasca Basin exploration

Uranium news from Saskatchewan and elsewhere for March 1 to 7, 2014

With Fission Uranium’s PLS rigs in the background, NexGen drills Rook 1.

A $10-million bought deal for NexGen Energy TSXV:NXE reinforces the company’s new prominence in Athabasca Basin uranium exploration. Announced March 4, the private placement follows news of radiometric results from a new area of the company’s Rook 1 project, which is adjacent to PLS.

Subject to approvals, the deal involves 22.3 million units at $0.45 and gives the underwriters an option to buy an additional 15%. Each unit consists of a share and one-half warrant, with each entire warrant exercisable at $0.65 for two years. Proceeds will go to Basin exploration, working capital and general corporate purposes.

NexGen’s stock took off with the February 19 release of radiometric readings from the first hole in Rook 1’s Arrow area, which the company called “a totally new zone of uranium mineralization.” The news propelled the company from a 52-week low of $0.225 to a 52-week high of $0.65 in two days. The stock closed March 7 at $0.49.

Meanwhile NexGen has moved its other rig to Arrow to focus two drills on the new area.

NexGen holds several properties in the Basin. But it has yet to release results from last summer’s nine-hole campaign on the Radio project, where the company has a 70% earn-in.

NexGen expects to close the bought deal by March 26.

Zadar announces 2014 plans for PNE and Pasfield projects

With permit applications submitted, Zadar Ventures TSXV:ZAD announced plans for two projects on March 3. The 15,292-hectare PNE, about 11 kilometres northeast of PLS, has about 3,500 metres scheduled for winter and summer drilling, along with ground-based geophysics. Previously identified radon anomalies and conductive trends will help determine targets.

Plans for the 37,445-hectare Pasfield Lake property, within the Cable Bay shear zone in the east-central Basin, include airborne and ground geophysics and a proposed 3,800 metres of drilling “followed by a staged program of uranium exploration culminating in [a] 32,000-metre drilling program,” the company stated.

Pasfield Lake is one of a number of properties that Zadar acquired from Canterra Minerals TSXV:CTM late last year.

Noka Resources/Alpha Exploration begin radon surveys on Carpenter Lake

Radon surveys on lake water and sediment have begun at Carpenter Lake on the Basin’s south-central edge. Announced March 4 by Noka Resources TSXV:NX and Alpha Exploration TSXV:AEX, the four-to-five-week agenda will include sampling from about a thousand locations over a 16-kilometre stretch of the Cable Bay shear zone, which the companies have described as a “major regional shear zone with known uranium enrichment.”

Spring and summer plans for the 20,637-hectare property include high-resolution airborne radiometrics to search for near-surface uranium boulders, followed by ground prospecting and geochemical sampling. The work is part of the Alpha Minerals spinco’s 60% earn-in from Noka, a member of the Western Athabasca Syndicate that plans to drill its PLS-vicinity Preston Lake property this month.

Late last month Noka closed a $1.13-million private placement. Alpha Exploration announced plans for other projects in December and January.

Hodgins Auctioneers pursues Basin uranium claims

A company specializing in auctioning equipment and real estate has signed a conditional agreement to acquire uranium interests in the Basin. Under a deal announced March 6 with Majesta Resources Inc, Hodgins Auctioneers TSXV:HA would get a 25% interest in a 39,125-hectare contiguous package that comes within 10 kilometres of the Key Lake mill.

Apart from TSXV approval, the transaction hinges on raising a $350,000 private placement.

An initial 25% would cost Hodgins $100,000 in cash or debt, two million shares and $300,000 in exploration spending. An additional 35% would require an extra four million shares and $400,000 in spending. A further 30% would call for another $400,000 cash or debt and two million shares.

Hodgins attributed a “low cost relative to similar transactions in the area due to the relationship between two of the insiders of the corporation and the party which owns the mineral claims.” Majesta would act as project operator.

Next Page 1 | 2

Greenland says yes to uranium mining

October 25th, 2013

by Ana Komnenic | October 25, 2013 | Reprinted by permission of MINING.com

Greenland has taken a major step in opening up its mining industry. The country’s parliament voted on October 24 to end a decades-long ban on mining for radioactive materials. The decision clears the way for uranium and rare earths mining.

Greenland says yes to uranium mining

“We cannot live with unemployment and cost of living increases while our economy is at a standstill. It is therefore necessary that we eliminate zero tolerance towards uranium now,” Greenland Prime Minister Aleqa Hammond said according to Reuters.

Some major REE deposits had been off limits because they are connected to radioactive materials.

Lawmakers passed the decision 15 to 14 votes.

With the restrictions lifted, China might have something to worry about. The Asian giant currently produces 95% of the world’s REE supply. Greenland is believed to have enough of these metals to satisfy one-quarter of global demand over the next 50 years.

One company in particular stands to benefit. Greenland Minerals and Energy, an Australian company, has both uranium and REE projects in the country.

See also: Greenland to revise controversial mining law
China growing uneasy over Greenland’s rare earth ambitions

Reprinted by permission of MINING.com

China growing uneasy over Greenland’s rare earth ambitions

August 9th, 2013

by Ana Komnenic | August 9, 2013 | Reprinted by permission of Mining.com

China has long enjoyed its supremacy in the rare earths field but lately this position has been challenged by an often overlooked, massive island nation: Greenland.

The Asian giant produces 95% of the world’s Rare Earth Elements (REE) supply—a fact that has caused much unease among U.S. lawmakers—and has never had to face any real contenders, until now. Late last year the industry was buzzing with rumours that Greenland could hold enough of these metals to satisfy one-quarter of global demand over the next 50 years.

A recent visit by Chinese President Hu Jintao to Denmark—Greenland’s official hegemon—caused some analysts to speculate that the People’s Republic may be getting a little antsy over the country’s valuable deposits, Ice News reports.

According to European Commission data, Greenland has “especially strong potential in six of the 14 elements on the EU critical raw materials list.”

In fact, one company is well on its way to becoming a real threat: Greenland’s Tanbreez Mining—of Australian parentage—has been eyeing the island’s southern region since 2010. According to a company news release, they planned to file a final application for an exploration licence by July 2013.

But the People’s Republic may find some solace in the fact that Greenland is overwhelmingly concerned about the environmental and safety implications of mining rare earths, which may cause some roadblocks. However, Tanbreez asserts that these concerns do not apply to the areas it plans on mining.

Meanwhile, China’s domestic REE industry is hitting a rough patch. According to Ice News, “excessive mining” has made extraction difficult for the country’s miners. Illegal mining has also plagued the sector.

Aside from Greenland, China’s rare earths industry has other challengers to consider. According to Greenland’s Bureau of Minerals and Petroleum, Brazil has 37% of the world’s rare earth potential—12% more than China—and Vietnam 10%.

The U.S. is also ramping up exploration and recently tasked the U.S. Geological Survey with uncovering domestic supplies in old mine site tailings.

Chinese officials and REE producers addressed these concerns at the country’s Baotou Rare Earth Industry Forum on Thursday.

“The output of each rare earth mine in the United States, Australia and Russia is often less than 25,000 tonnes,” Zhang Zhong, president of China’s top rare earth producer told Xinhuanet. “Although Vietnam, India, Canada and South Africa have launched some rare earth projects, they need plenty of time to put them into operation and realize the capacity.”

Week in review

March 15th, 2013

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

by Greg Klein

Next Page 1 | 2

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.

GATA on CNBC

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.

Next Page 1 | 2

Week in review

February 8th, 2013

A mining and exploration retrospect for February 2 to 8, 2013

by Greg Klein

Next Page 1 | 2

Dangerous work

A Quebec rescue team recovered the bodies of two quarry workers on Saturday, four days after a landslide buried them in an open gravel pit. Daniel Brisebois and Marie-Claude Laporte worked for Maskimo Construction at L’Epiphanie, about 50 kilometres northeast of Montreal.

On Tuesday Eastern Platinum TSX:ELR reported the death of Allan Swartz, a shift supervisor at the Crocodile River Mine in South Africa, after he fell through an empty ore pass.

Five workers from Braeval Mining’s TSX:BVL Snow Mine project in northern Colombia remain missing after being abducted by the National Liberation Army (ELN) on January 18.

Natives end De Beers protest

A four-day blockade outside De Beers Victor diamond mine in northern Ontario ended peacefully Thursday night, the Timmins Press reported. A company spokesperson told the paper that De Beers agreed to discuss changes to an existing impact benefit agreement regarding employment, training “and maximizing the benefits.”

Supply convoys were prevented from reaching the site by about 16 protestors from the native community of Attawapiskat, 90 kilometres away.

Vague definitions give aboriginals enormous power

A mining and exploration retrospect

In Saturday’s Globe and Mail, columnist Jeffrey Simpson rather candidly addressed the vague but powerful native rights that have created a “de facto veto” over resource development in Canada.

Native demands, he wrote, stem from “treaty rights, however defined, and from aboriginal rights, however defined, in the Charter of Rights and Freedoms.” In its 1997 Delgamuukw decision, Canada’s Supreme Court established the duty to consult natives before working on Crown land. But the court didn’t define the consultation process except to say, in effect, “the stronger the aboriginal [land] claim, the more serious the consultation,” Simpson stated.

Consequently “it’s obviously in the interests of aboriginals to make the most sweeping initial claims possible, whether they have much justification in history, current reality or law. As long as the claim is there, aboriginals can interpret Delgamuukw as giving them a de facto veto, even if that isn’t what the ruling said.”

In a later court ruling, “once again, the meaning and reality of ‘consult’ was left vague, perhaps necessarily so, since how can one define a process of consultation that would be agreed to by all parties. In practice, what ‘consult’ means to aboriginals is ‘we must agree.’”

Most recently, a December decision from the Yukon Court of Appeal declared that the territorial government must consult and “accommodate” the Ross River Dena Council even before very early-stage prospecting in the Ross River area. The ruling is considered to have strong repercussions for other jurisdictions as well.

“Even before a company does anything, the government’s obligation to consult kicks in. From now on—in ways yet to be determined—governments have to consult aboriginals before anything is done that might some day, somehow, have an impact on whatever land they might claim, or have claimed, even if such claims haven’t been tested or resolved,” Simpson wrote.

The Yukon government may appeal the decision. But Simpson’s conclusion might imply that judges already have their minds made up.

“Aboriginals must be delighted with goalposts moving closer all the time toward their conception of consultation as approval by them of anything and everything that might occur on land over which they claim rights, proven or unproven.”

Next Page 1 | 2

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.

Next Page 1 | 2

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.

Next Page 1 | 2