Saturday 3rd December 2016

Resource Clips


Posts tagged ‘japan’

An expert view

October 27th, 2016

ALX Uranium’s new CEO Mark Lackey discusses the commodity and the company

by Greg Klein

Thirty-six years in key positions give Mark Lackey a well-rounded perspective on the uranium sector. Added to that is an investor’s outlook gained by experience in the brokerage industry. A prolific media commentator—with over 300 TV appearances—he’s frequently asked to discuss commodities, often focusing on uranium trends and uranium companies. Lackey spoke with ResourceClips.com on October 26, the day he joined ALX Uranium TSXV:AL as president/CEO/director.

Industry expert Mark Lackey takes the helm at ALX Uranium

Mark Lackey brings extensive
expertise to ALX Uranium.

Lackey has served as Bank of Canada economist responsible for U.S. economic forecasting and senior commodities manager at the Bank of Montreal. Stints with Gulf Canada, a uranium producer like many other oil companies of the time, and Ontario Hydro, a major uranium consumer, enhanced his supply/demand insight.

That uranium career includes his 16 years in the brokerage industry, serving with Brawley Cathers, Blackmont Capital, Hampton Securities and Pope & Company. More recently he’s been executive VP at CHF Investor Relations and technical adviser at Presmont Group.

To those who watch uranium, its underachieving price hasn’t just been an ongoing disappointment. It’s a source of frustration to those who’ve made bullish forecasts. Lackey has been less surprised than others, however.

“I spoke at a conference last year and might have been the only one who thought uranium was actually going to go down this year,” he recalls. “It did go down, but way more than I thought, which was about $29 or $28. I thought everybody else was too optimistic about Japan restarting all the units and we’ve seen excess supply coming out of places like Kazakhstan. So the weakness this year didn’t surprise me.”

History gives him a sense of perspective, not to mention optimism. “I’ve seen this from $8 in the late ’90s to $136 in 2007. It fell during the 2008 recession, then came back nicely to $72 in 2011, the day Fukushima was hit. So we’ve had some big moves both ways over the years but now we’re down to a price that’s not sustainable. How many new mines would you get at these prices? I can’t think of too many unless you find something huge in the Basin, because high-volume, low-grade projects in many other places have people looking for $50 to $60—not $21.”

ALX Uranium’s new CEO Mark Lackey discusses the commodity and the company

He sees a number of price catalysts over the next few years: increased buying from utilities, a possible reduction in Kazakhstan supply, Japanese restarts and nuclear expansion elsewhere.

Kazakhstan provided 39% of world supply last year (compared with Canada’s 22%). But Lackey wonders whether low prices will force the global leader to cut output. Kazakhstan has been disregarding a 2011 self-imposed production cap of 20,000 tonnes per year, the World Nuclear Association states. WNA data attributes last year’s output to 23,800 tonnes.

As for Japan, it “will have to do something ultimately,” Lackey maintains. “There are 51 of the 54 reactors idled, that’s six or seven billion dollars a plant, roughly three or four hundred billion dollars of infrastructure. Thirty of the units have been tested positively. There are political concerns and the closer you are to Fukushima the more difficult it would be to restart them, but southern Japan doesn’t seem to have the same anti-nuclear view. Japan’s burning a lot of coal, they’re burning LNG and I hear from my sources that there are brownouts and blackouts. You can’t have that in an industrial country.”

Japan’s restarts would have a symbolic effect. But it is, after all, just one country. “There are about 60 plants under construction around the world right now, and more and more of them are coming into play,” Lackey points out.

“It’s cleaner than most baseload sources and relatively cheap. The planet has 1.2 billion people with no power and another two billion with just intermittent power.”

As someone who’s been watching uranium companies for 36 years, I’ve seen it’s the team you have, the projects you have and the jurisdiction you’re in.—Mark Lackey,
president/CEO of ALX Uranium

Although near-term price scenarios can certainly influence investors, there are other priorities in assessing junior explorers. “As someone who’s been watching uranium companies for 36 years, I’ve seen it’s the team you have, the projects you have and the jurisdiction you’re in. My favourite jurisdiction’s been the Athabasca Basin. It’s got the highest grades and Saskatchewan’s a great province to work in.

“I follow the companies in this space and I can see that ALX has a very strong board, management and technical staff,” he adds. “I’m extremely bullish about uranium and extremely excited about working with such an impressive team. It’s a great opportunity and I’m glad to be part of it.”

Lackey replaces Jon Armes, who steps down to pursue other opportunities but stays on as a consultant. During his six years of leadership at ALX and its predecessor Lakeland Resources, Armes helped build one of the Athabasca Basin’s largest and most prospective uranium exploration portfolios. Most recently he negotiated the Hook-Carter transaction that benefits ALX with the budget and experience of Denison Mines TSX:DML.

Pushing the boundaries

October 12th, 2016

Technology opens new mining frontiers, sometimes challenging human endurance

by Greg Klein

This is the second of a two-part feature. See Part 1.

“Deep underground, deep sky and deep sea” comprise the lofty goals of Three Deep, a five-year program announced last month by China’s Ministry of Land and Resources. Part 1 of this feature looked at the country’s ambitions to take mineral exploration deeper than ever on land, at sea and into the heavens, and also outlined other countries’ space programs related to mineral exploration. Part 2 delves into undersea mining as well as some of the world’s deepest mines.

Looking to the ocean depths, undersea mining has had tangible success. De Beers has been scooping up alluvial diamonds off southwestern Africa for decades, although at shallow depths. Through NamDeb, a 50/50 JV with Namibia, a fleet of six boats mines the world’s largest-known placer diamond deposit, about 20 kilometres offshore and 150 metres deep.

Technology opens new mining frontiers, sometimes pushing human endurance

Workers at AngloGold Ashanti’s Mponeng operation
must withstand the heat of deep underground mining.

Diamond Fields International TSXV:DFI hopes to return to its offshore Namibian claims, where the company extracted alluvial stones between 2005 and 2008. The company also holds a 50.1% interest in Atlantis II, a zinc-copper-silver deposit contained in Red Sea sediments. That project’s now on hold pending a dispute with the Saudi Arabian JV partner.

With deeper, more technologically advanced ambitions, Nautilus Minerals TSX:NUS holds a mining licence for its 85%-held Solwara 1 project in Papua New Guinea waters. A seafloor massive sulphide deposit at an average depth of 1,550 metres, its grades explain the company’s motivation. The project has a 2012 resource using a 2.6% copper-equivalent cutoff, with the Solwara 1 and 1 North areas showing:

  • indicated: 1.03 million tonnes averaging 7.2% copper, 5 g/t gold, 23 g/t silver and 0.4% zinc

  • inferred: 1.54 million tonnes averaging 8.1% copper, 6.4 g/t gold, 34 g/t silver and 0.9% zinc

Using the same cutoff, the Solwara 12 zone shows:

  • inferred: 2.3 million tonnes averaging 7.3% copper, 3.6 g/t gold, 56 g/t silver and 3.6% zinc
Technology opens new mining frontiers, sometimes pushing human endurance

This Nautilus diagram illustrates
the proposed Solwara operation.

A company video shows how Nautilus had hoped to operate “the world’s first commercial high-grade seafloor copper-gold mine” beginning in 2018 using existing technology from land-based mining and offshore oil and gas. Now, should financial restructuring succeed, Nautilus says it could begin deployment and testing by the end of Q1 2019.

Last May Nautilus released a resource update for the Clarion-Clipperton Fracture Zone in the central Pacific waters of Tonga.

Another deep-sea hopeful, Ocean Minerals last month received approval from the Cook Islands to explore a 12,000-square-kilometre seabed expanse for rare earths in sediments.

A pioneer in undersea exploration, Japan’s getting ready for the next step, according to Bloomberg. A consortium including Mitsubishi Heavy Industries and Nippon Steel & Sumitomo Metal will begin pilot mining in Chinese-contested waters off Okinawa next April, the news agency stated. “Japan has confirmed the deposit has about 7.4 million tons of ore,” Bloomberg added, without specifying what kind of ore.

Scientists are analyzing data from the central Indian Ocean where nodules show signs of copper, nickel and manganese, the Times of India reported in January. The country has a remotely operated vehicle capable of an unusually deep 6,000 metres and is working on undersea mining technology.

In August the World Nuclear News stated Russia is considering a nuclear-powered submarine to explore northern seas for mineral deposits. A government report said the sub’s R&D could put the project on par with the country’s space industry, the WNN added.

If one project alone could justify China’s undersea ambitions, it might be a 470.47-ton gold deposit announced last November. Lying at 2,000 metres’ depth off northern China, the bounty was delineated by 1,000 workers and 120 kilometres of drilling from 67 sea platforms over three years, the People’s Daily reported. Laizhou Rehi Mining hopes to extract the stuff, according to China Daily.

China’s deep underground ambitions might bring innovation to exploration but have been long preceded by actual mining in South Africa—although not without problems, as the country’s deplorable safety record shows. Greater depths bring greater threats from rockfalls and mini-earthquakes.

At 3.9 kilometres’ depth AngloGold Ashanti’s (NYSE:AU) Mponeng holds status as the world’s deepest mine. Five other mines within 50 kilometres of Johannesburg work from at least three kilometres’ depth, where “rock temperatures can reach 60 degrees Celsius, enough to fry an egg,” according to a Bloomberg article posted by Mineweb.com.

In his 2013 book Gold: The Race for the World’s Most Seductive Metal, Matthew Hart recounts a visit to Mponeng, where he’s told a “seismic event” shakes the mine 600 times a month.

Sometimes the quakes cause rockbursts, when rock explodes into a mining cavity and mows men down with a deadly spray of jagged rock. Sometimes a tremor causes a “fall of ground”—the term for a collapse. Some of the rockbursts had been so powerful that other countries, detecting the seismic signature, had suspected South Africa of testing a nuclear bomb.

AngloGold subjects job-seekers to a heat-endurance test, Hart explains.

In a special chamber, applicants perform step exercises while technicians monitor them. The test chamber is kept at a “wet” temperature of eighty-two degrees. The high humidity makes it feel like ninety-six. “We are trying to force the body’s thermoregulatory system to kick in,” said Zahan Eloff, an occupational health physician. “If your body cools itself efficiently, you are safe to go underground for a fourteen-day trial, and if that goes well, cleared to work.”

Clearly there’s more than technological challenges to mining the deeps.

By the way, credit for the world’s deepest drilling goes to Russia, which spent 24 years sinking the Kola Superdeep Bore Hole to 12,261 metres, halfway to the mantle. Work was halted by temperatures of 180 degrees Celsius.

This is the second of a two-part feature. See Part 1.

Russia plans 11 new nuclear reactors by 2030, Japanese restarts forecast to pick up

August 10th, 2016

by Greg Klein | August 10, 2016

Not counting six already under construction, Russia’s government calls for 11 new nuclear reactors by 2030, according to an August 10 World Nuclear News story. The report follows a July 28 WNN article citing forecasts that Japan will have 19 reactors back in operation by the end of March 2017.

[The Russian project’s] ultimate aim is to eliminate production of radioactive waste from nuclear power generation.—World Nuclear News

Russia also approved expansions of six existing nuclear power plants. In addition the government approved construction of a facility “to produce high-density uranium-plutonium neutron fuel and the construction by 2025 of the BREST-OD-300 fast neutron reactor,” WNN added. “BREST-OD-300 is part of the Russian state nuclear corporation’s ‘Proryv,’ or Breakthrough project, to enable a closed nuclear fuel cycle. The ultimate aim is to eliminate production of radioactive waste from nuclear power generation.”

The Japanese forecast comes from the country’s Institute of Energy Economics, the WNN stated. Seven of the 19 predicted restarts could take place by the current fiscal year-end on March 31. Four reactors have already restarted, although court injunctions put two of them back offline. Judicial rulings and local consents will continue to influence the rate of restarts, the institute pointed out.

Should the 19 units come back into operation, they would generate “some 119.8 terawatt-hours of electricity annually, compared with total nuclear output of 288.2 TWh in FY2010, the year prior to the accident at the Fukushima Daiichi plant,” WNN stated.

China leads the world in nuclear energy expansion with 20 reactors under construction, 42 planned and 136 proposed, according to August 1 figures from the World Nuclear Association. Globally the numbers come to 61 under construction, 170 planned and 339 proposed by 2030.

All those plans, proposals and forecasts have had little if any effect on uranium’s price, however. Ux Consulting’s August 8 price indicator shows energy’s yellow metal floundering at $26, not far above its post-Fukushima lows.

How a Brexit could affect the gold price

July 7th, 2016

The precious metal’s recent run could just be getting started

by SmallCapPower.com | July 7, 2016

Gold was already one of the best-performing asset classes in 2016 before British citizens unexpectedly voted to leave the European Union on June 23. We believe this will turn out to be the most important catalyst for the precious metal since it began its most recent bull run.

How a Brexit could affect the gold price

Despite beginning the New Year below $1,100, gold had failed a few times to hold above the $1,300 level since its upward move began back in January. We feel confident that the Brexit uncertainty will hang over the markets for at least the remainder of 2016, providing a firm support above $1,300.

The most immediate catalyst likely coming gold’s way is U.S. employment data for the month of June, which is expected to be released on July 8. The Labor Department expects 170,000 new jobs to be created during the month.

Given May’s dismal 38,000 employment gain, only a figure well above 200,000 will create any potential headwinds for the precious metal.

This all leads to the next U.S. Federal Reserve meeting that is happening during the final week of July. Minutes from the last Federal Open Market Committee meeting (released on July 6) suggested that the impact of a Brexit would need to be more certain before the Fed would decide to raise interest rates again, all of which is good news for gold bulls.

Also helping gold is negative interest rates on long-term debt in Germany, France, Japan and, most recently, Switzerland, which has seen its 50-year interest rates go negative for the first time.

Could the United States be next? In fact, that country’s 10- and 30-year interest rates on July 6 reached all-time lows of 1.32% and 2.1% respectively. According to data released by Fitch Ratings, a record US$11.7 trillion of global sovereign debt has dipped to sub-zero yield territory.

Continue reading this article on SmallCapPower.com.

Commerce Resources president Chris Grove remarks on China’s manipulation of an ongoing territorial dispute

June 27th, 2016

…Read more

Renewed tensions between China and Japan recall 2010 rare earths crisis

June 9th, 2016

by Greg Klein | June 9, 2016

A territorial conflict in the East China Sea flared up again as Japan protested a Chinese warship entering disputed waters. Japan’s vice foreign minister formally objected to the Chinese ambassador on June 8, according to Reuters.

Renewed tensions between China and Japan recall 2010 rare earths crisis

China’s defence ministry defended its actions, telling the news agency, “Chinese naval ships sailing through waters our country has jurisdiction over is reasonable and legal. No other country has the right to make thoughtless remarks about this.”

The dispute concerns islands known as Senkaku in Japan and Diaoyu in China, Reuters added. Coastguard vessels from both countries enter the area regularly, but this is the first visit by a Chinese warship, the agency stated.

A September 2010 incident in the same waters set off a supply crisis for rare earths. Japan arrested a Chinese fishing captain after he twice rammed his boat against a Japanese naval vessel. China responded by cutting off rare earths exports to Japan, pushing REE prices as high as 3,000%, recalls Commerce Resources TSXV:CCE president Chris Grove.

With a rare earths project in northern Quebec and a tantalum-niobium project in British Columbia, he follows geopolitical issues affecting critical supply and demand. Grove says the recent incident reflects a larger problem of “simmering animosity towards the Japanese, which is being stoked by the Chinese government,” as well as the country’s nationalist aggression towards its other neighbours.

“Probably all Chinese governments since 1939 have been more than willing to remind their people about Japan and the Rape of Nanking. From all my time in China, I find it jaw-dropping how often the government, through their media, exhort the people of China to remember Nanking.”

Grove considers China’s 2010 actions “nothing short of brilliant, using a really small geopolitical incident to unilaterally cut off supplies of rare earth elements to Japan, and that’s the world’s second-biggest market. Japan was completely screwed. It brings to mind the tools China has at its disposal.”

Around the same time as the Chinese navy’s June 8 incursion, three Russian naval vessels also sailed near the disputed islands, “raising concern in Japan of a co-ordinated show of force by Beijing and Moscow,” Reuters stated.

One day earlier the U.S. said a Chinese fighter jet confronted an American spy plane at an “unsafe, excessive speed” in international airspace over the East China Sea, the Wall Street Journal reported. It was the second encounter of its kind in a month.

The 2010 incident inspired David S. Abraham’s book The Elements of Power: Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age.

May 25th, 2016

The worst urban crisis in history could be upon us Equities.com
Former IMF economist calls on countries to buy gold GoldSeek
Gold takes a breather. Is this the buying opportunity investors are looking for? Stockhouse
Solar energy: Harnessing the heat Industrial Minerals
China’s ICBC to buy 2,000-ton London gold vault from Barclays NAI 500
Total makes $1.1-billion battery bid for foothold in the new oil Benchmark Mineral Intelligence
When will uranium emerge from the shadow of Fukushima? Streetwise Reports
Gold stock rally’s market cap bias may surprise you SmallCapPower

May 24th, 2016

Gold takes a breather. Is this the buying opportunity investors are looking for? Stockhouse
Solar energy: Harnessing the heat Industrial Minerals
Rookie Chinese commodity traders run trillions Equities.com
China’s ICBC to buy 2,000-ton London gold vault from Barclays NAI 500
Infographic: COMEX gold futures market GoldSeek
Total makes $1.1-billion battery bid for foothold in the new oil Benchmark Mineral Intelligence
When will uranium emerge from the shadow of Fukushima? Streetwise Reports
Gold stock rally’s market cap bias may surprise you SmallCapPower

May 19th, 2016

Solar energy: Harnessing the heat Industrial Minerals
Rookie Chinese commodity traders run trillions Equities.com
China’s ICBC to buy 2,000-ton London gold vault from Barclays NAI 500
Infographic: COMEX gold futures market GoldSeek
Total makes $1.1-billion battery bid for foothold in the new oil Benchmark Mineral Intelligence
When will uranium emerge from the shadow of Fukushima? Streetwise Reports
China: Still the world’s number one heavy metal rock star Stockhouse
Gold stock rally’s market cap bias may surprise you SmallCapPower

May 18th, 2016

Think Buffett’s billion-dollar Apple investment is exciting? Think again. Equities.com
China’s ICBC to buy 2,000-ton London gold vault from Barclays NAI 500
Infographic: COMEX gold futures market GoldSeek
EU funds rare earths mining project to cut imports Industrial Minerals
Total makes $1.1-billion battery bid for foothold in the new oil Benchmark Mineral Intelligence
When will uranium emerge from the shadow of Fukushima? Streetwise Reports
China: Still the world’s number one heavy metal rock star Stockhouse
Gold stock rally’s market cap bias may surprise you SmallCapPower