Wednesday 7th December 2016

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Posts tagged ‘madagascar’

Ever deeper, ever higher

October 11th, 2016

China takes on three mining frontiers, but not without competition

by Greg Klein

This is the first of a two-part feature. See Part 2.

Nearly a century before laggard Europeans got around to their Age of Exploration, Chinese merchant vessels had been travelling at least as far as eastern Africa, returning with vast shiploads of treasure. The voyages ended abruptly in 1433, for reasons debated by historians, and rulers ordered a massive merchant fleet destroyed. That largely left the New World to Westerners, evidently not a policy China intends to repeat. Now the country plans the conquest of three new frontiers: “deep underground, deep sky and deep sea.”

Such are the goals of Three Deep, a five-year plan announced last month by the country’s Ministry of Land and Resources. China’s funding R&D that would take mineral exploration deeper than ever on land and at sea, while exploring from outer space as well. But formidable as they are, the three frontiers aren’t completely uncharted. The expansionist, resource-hungry regime will have competition.

China takes on three mining frontiers, but not without competition

By 2020 the country wants the ability to mine land-based deposits that begin two kilometres in depth, find minerals at three kilometres, and identify oil and gas at 6.5 to 10 kilometres, the South China Morning Post reported October 5. China intends to develop underground communities too, although those details were even more scarce.

China also plans technology for undersea mineral exploration and mining, working towards the ability to send a remotely operated vehicle (ROV) to 11 kilometres’ depth by 2020, the paper added. That’s slightly beyond the deepest known point of any seabed. The country has already sent an ROV seven kilometres deep in the Pacific. In the Indian Ocean, Chinese have been studying seabed mining technology on a 10,000-square-kilometre area south of Madagascar, the SCMP stated.

Going from the depths to the heavens, China wants 27 satellites in orbit by 2020 to conduct surveys and research, partly on terrestrial mineral potential. The country also has expressed ambitions for moon and Mars landings, and for sending its citizens into space. A Chinese competitor to SpaceX, One Space Technology, plans its first commercial rocket launch in 2018.

SpaceX, of course, retains its Elon Musk confidence even after the Falcon 9 rocket blew up prior to take-off last month, destroying a $300-million communications satellite. Having received NASA contracts to ferry people and cargo to the International Space Station, Musk continues to talk about sending colonists to Mars. He’s already sent some lithium stocks to the moon.

Probably among the more credible companies talking about mining the heavens are Planetary Resources and Deep Space Industries. Both develop technology for NAFTA and both have signed MOUs with Luxembourg that would help finance mineral exploration and mining of near-Earth asteroids. The Grand Duchy, a global leader in satellite communications, has announced its willingness to invest in extra-terrestrial mining to become a world leader in other worlds. The country also plans to create a legal framework for its outer space endeavours, after the U.S. passed legislation giving Americans the right to keep any extra-terrestrial commodities they extract.

Deep Space says it will launch its Prospector X experimental asteroid explorer “in the near future.” By the first half of the next decade, Planetary expects to begin small-scale extraction of asteroid water for its oxygen and hydrogen.

Already a nine-year veteran of the main asteroid belt, NASA’s Dawn craft now orbits the dwarf planet Ceres after having studied the proto-planet Vesta. Last month the space agency’s NASA OSIRIS-REx set off for the asteroid Bennu, with arrival expected in 2018 and return in 2023.

JAXA, the Japan Aerospace Exploration Agency, has been to that neighbourhood and back after its Hayabusa craft delivered asteroid samples in 2010.

Last month the European Space Agency ended the 12-year, eight-billion-kilometre odyssey of its Rosetta craft, which spent the last two years studying a comet. In a joint project with Russia’s Roscosmos, the ESA expects to land a capsule on Mars on October 19 to search for signs of previous life.

Russia’s moon exploration program sees potential for minerals delivered by asteroid impact. “In the next few years, all scheduled moon flights will focus on its southern polar region, where low-temperature reservoirs of rare earths, as well as unknown volatile substances, have been detected,” Industrial Minerals quoted Vladislav Shevchenko of Moscow State University. Given higher commodity prices, mining could be viable, he added.

Boeing NYSE:BA recently matched Musk’s big talk as CEO Dennis Muilenburg spoke about sending holidayers to orbiting tourist traps prior to linking up with the Red Planet. “I’m convinced the first person to step foot on Mars will arrive there riding a Boeing rocket,” Bloomberg quoted him last week. As a NASA contractor Boeing competes with SpaceX on its own and through the United Launch Alliance, a JV with Lockheed Martin NYSE:LMT.

This is the first of a two-part feature. See Part 2.

China has likely reached peak graphite: Benchmark Mineral Intelligence

December 15th, 2014

by Greg Klein | December 15, 2014

Production from the world’s largest supplier of natural graphite dropped to a record low in 2014, according to a December note from Benchmark Mineral Intelligence. After hitting a high of 85% of global supply in 2013, China fell to 70% this year, writes Benchmark analyst Simon Moores. Over the next three to five years the country’s output will continue falling to about 50% or 60% of world production. That means “we have likely seen peak graphite supply in China.”

Although demand from the steelmaking industry should continue to grow between 1% and 3% a year, batteries will call for five to 10 times as much graphite, Moores adds. He asks whether consumers will turn to synthetic material to make up the shortfall.

But the market’s currently oversupplied with both natural and synthetic, according to Laura Syrett of Industrial Minerals. Reporting from the Graphite and Graphene Conference in Berlin on December 12, she attributed the glut to a three-year slowdown in steelmaking and slower-than-expected growth in the battery industry.

Still, “growth will come from the battery market,” she quoted Asbury Graphite Mills CEO Stephen Riddle. “This will be from batteries used in electric vehicles and energy storage—not cell phones or iPads. These don’t use enough graphite.”

Synthetic graphite could claim a larger share of the market despite its price, said Fabrizio Corti, senior VP for sales and business development at Imerys Graphite and Carbon. “Only a very small proportion of the graphite we have today is suitable for high-end markets and even this requires heavy processing.”

With natural graphite producers wasting about 60% of volume to create battery-grade material, natural and synthetic costs roughly the same, he told the conference.

Two former flake graphite mines re-opened in 2014, Syrett pointed out. Last April AIM-listed StratMin Global Resources began commercial production at its Loharano mine in Madagascar. In August Flinders Resources TSXV:FDR produced the first concentrate from its Woxna mine in central Sweden.

Flinders has signed a binding letter agreement to acquire Big North Graphite TSXV:NRT, which holds a number of projects in Canada and Mexico including Nuevo San Pedro in Sonora state, a joint venture in which the company test-mines and sells amorphous graphite.

Flinders first in graphite’s race to production

August 6th, 2014

by Greg Klein | August 6, 2014

Announcing its first graphite concentrate from the Woxna mine in central Sweden, Flinders Resources TSXV:FDR claims first place in the Canadian-listed juniors’ quest for flake graphite production. The company’s advantage came from a past-producer that had been on care and maintenance since 2001.

In an August 6 announcement Flinders said it began operations last month, has completed wet commissioning and produced its first graphite concentrate.

Flinders first in graphite’s race to production

“All is on track for full commissioning, with customers now coming to site to confirm our capabilities and discuss expanded supply contracts,” said president/CEO Blair Way.

Describing the operation as “a sustainable European alternative to Chinese supply,” he added, “Now that we have the confidence in our facility and product, we are working to expand our resource base through proving up our historical resources.”

While announcing its first sales contract last May, Flinders stated it was developing a European sales and distribution network. The company plans a formal opening ceremony for Woxna next month.

Flinders overtook another past-producer held by the privately owned Ontario Graphite. Having missed a 2013 re-start target, the company now says its Kearney mine, 250 kilometres north of Toronto, will re-open sometime this year and be fully operational in 2015. “At full capacity, Ontario Graphite projects annual production of 20,000 tonnes of high-quality (95% to 97% Cg) large flake graphite mineral concentrate.”

But Flinders’ production followed that of the UK’s only listed graphite company, Stratmin Global Resources AIM:STGR, which began commercial production at its Loharano mine in Madagascar last April. The company produced 195 tonnes of +90% graphitic carbon (Cg) during Q2 and expects to raise that to 300 tonnes per month in September, with a longer-range forecast of 1,000 tonnes per month.

One junior that outpaced everyone—albeit in a different contest—was Big North Graphite TSXV:NRT. The company has been test-mining an 11-hectare amorphous past-producer in Mexico’s Sonora state. Big North sells semi-processed run of mine from the 50/50 joint venture and from product purchased from other regional mines.

Read more about graphite’s front-runners.

Tesla talk electrifies stocks

March 13th, 2014

Huge plans for EV expansion would require several new graphite mines

by Greg Klein

Giga what?

It’s a “Gigafactory” and its dramatic announcement has frontrunners to graphite production basking in the news—a potential 37% increase in natural graphite demand by 2020, requiring six to nine new graphite mines. Those estimates come from the authoritative journal Industrial Minerals in the wake of Tesla Motors’ plans for a $5-billion plant to manufacture lithium-ion batteries for electric vehicles. While several caveats have to be considered, graphite companies have once again come to market prominence.

The Gigafactory’s not yet a fact. Start-up is slated for 2017 but Tesla needs a location, not to mention partners. Tesla’s putting up only two-fifths of the $5-billion price tag. Writing in Morning Notes, Chris Berry states that Panasonic and Sanyo are “rumoured to be contributing as well.” IM writers Simon Moores and Andy Miller caution that “the plant is in the planning stage and capacities depend strongly on market demand.”

Huge plans for EV expansion would require several new graphite mines

Even without growth elsewhere, Tesla Motors
would dramatically increase demand for energy minerals.

Berry, who has previously called Tesla a “bellwether or benchmark for green technology and by extension energy metals,” emphasizes that the Gigafactory’s success depends “less on a secure supply of raw materials and more on the long-term price of a gallon of gas.” He also says EVs face competition from other technologies. And, although “a long shot,” current battery technology could become obsolete.

Nor has Tesla specified that its batteries will use natural graphite. Synthetic graphite might be an option but, as Berry points out, the natural stuff would help the company meet its goal of cutting manufacturing costs by half.

Moores and Miller note alternatives to graphite, such as the non-graphitic carbon anodes now in the R&D stage. But, the writers state, graphite anodes remain “the current material of choice for Li-ion battery producers.”

Should all go according to plan and assumptions, IM Data offers some intriguing estimates. Capacity operation at the Gigafactory would call for 93,000 tonnes of large flake graphite. Those grades, +80 mesh and larger, “made up just over 20% of total flake graphite output of 375,000 tonnes in 2013,” IM stated. By 2020, even with no growth in other areas, the Gigafactory could require six new mines.

That’s just the conservative estimate. “In a bullish case this could rise as high as 140,000 tonnes,” IM states, calling for nine new mines. A number of projects rank among the contenders.

Canada’s next new graphite operation would likely be Ontario Graphite’s Kearney mine, 250 kilometres north of Toronto. Having missed its 2013 target date, the privately owned company now says Kearney will re-open early this year. The large, low-grade resource would produce an annual “20,000 tonnes of natural, large flake, high carbon graphite concentrate,” the company states.

Next in line might be Flinders Resources TSXV:FDR, which plans to skip feasibility and even pre-feas to begin commercial production at Sweden’s Woxna mine by July. The company calls itself the only publicly traded company that’s completely funded for production. Its primary market would be European refractories and crucible manufacturers.

The only graphite company with full feasibility complete, not to mention an expansion case PEA and major permitting, Northern Graphite TSXV:NGC hopes to begin construction on the Bissett Creek mine in southeastern Ontario by Q4 this year, with commercial production following in Q4 2015. Negotiations are underway with potential strategic partners to take up part of the $101.6-million initial capex. One of the company’s claims to fame has even greater significance following the Tesla news. Northern is “the only junior that has successfully produced and tested spherical graphite for Li-ion batteries,” the company says.

This year has Focus Graphite TSXV:FMS focusing on feasibility and financing. In December the company signed what it terms the graphite industry’s first offtake deal, a 10-year contract with a Chinese conglomerate that will buy 20,000 to 40,000 tonnes a year. The 2013 preliminary economic assessment for the Lac Knife project in northeastern Quebec forecast total annual production at 44,000 tonnes. The PEA projected an initial capex of $126 million, which Focus hopes to raise through a combination of debt and equity.

Mason Graphite’s (TSXV:LLG) timeline has feasibility scheduled for completion in Q3 and construction beginning in Q1 2015. Last April’s PEA gave the company’s Lac Gueret project in northeastern Quebec direct costs, including contingency, totalling $107.92 million.

A company hoping to begin production in 2015, Energizer Resources TSX:EGZ has a February 2013 PEA projecting a $162.04-million capex for its Molo deposit in Madagascar. The current plan is to start small with 50,000 tonnes per year but build to a 150,000-tpa capacity as the market requires.

Not as advanced, but a prominent company nonetheless, Zenyatta Ventures TSXV:ZEN plans to finish a PEA in Q2 following last December’s maiden resource for its Albany project. The “very rare hydrothermal deposit” rejuvenated early-stage graphite activity by sparking an area play around the north-central Ontario property.

One junior that’s already selling product is Big North Graphite TSXV:NRT. The company has so far sold 760 tons produced by test-mining its 11-hectare, 50/50 Nuevo San Pedro joint venture in Mexico and by purchasing output from other small, nearby operations. The less-expensive amorphous product doesn’t serve the battery market but the company’s also pursuing flake graphite at its other properties in Mexico and Canada.

IM writers Moores and Miller compare Tesla’s plans to Henry Ford’s introduction of the assembly line to car manufacture, saying the Gigafactory “could prove just as pivotal in the emergence of the EV market, unlocking a lucrative new layer of demand for natural graphite producers.”

In his Morning Notes article, Berry points out that graphite is the largest component of the numerous materials used to make Li-ion batteries, but not the most expensive. Though Tesla’s announcement boosted graphite and lithium companies, he observes, cobalt and nickel stocks somehow missed out.

“There are a multitude of factors which will ultimately determine the success or failure of the Gigafactory,” Berry concludes. “But it is clear that reliable supply of various energy metals remains at the heart of this strategy.”

Alberta most attractive mining destination in Canada, third worldwide

March 3rd, 2014

by Cecilia Jamasmie | March 3, 2014 | Reprinted by permission of MINING.com

Alberta most attractive mining destination in Canada, third worldwide

Oilsands development in northern Alberta.

 

For the second consecutive year, Alberta—home to the booming and controversial oilsands industry—ranked first in the country and third worldwide as the most attractive jurisdiction for mining investors in the Fraser Institute’s annual global survey of mining executives.

The study, released March 3 as the Prospectors and Developers Association of Canada convention kicked off in Toronto, is based on input from 690 mineral exploration and development company executives.

Sweden and Finland scored the top places in this year’s survey, which spotlighted 112 jurisdictions worldwide. Kyrgyzstan and Venezuela were named the worst two countries to venture.

“Miners praise Alberta for its transparent and productive approach to mining policy. The province offers competitive taxation regimes, sound legal systems and relatively low uncertainty around land claims. That’s what miners look for,” said Kenneth Green, Fraser Institute senior director of energy and natural resources.

Two other Canadian jurisdictions—New Brunswick (7), and Newfoundland and Labrador (9)—ranked in the top 10 worldwide, followed by Saskatchewan (12), Yukon (19), Quebec (21), Manitoba (26), Ontario (28), Nova Scotia (29), British Columbia (32), Nunavut (44) and the Northwest Territories (47).

Quebec, once the darling of mining investors, continued to fall down the rabbit hole. From 2007 to 2009, the French-speaking district topped the survey, then dropped to fifth in 2011, 11th in 2012 and finally 21st worldwide in 2013, due in part to amendments to Quebec’s mining act and recent tax policy changes.

“If Quebec wants to renew confidence in the global mining sector, it should reduce red tape, minimize the risk associated with policy changes and tax increases, and respect negotiated contracts,” Green said.

B.C. dropped to 32nd from 31st in 2012, though the survey recorded improved perceptions regarding the western province’s political stability and availability of labour and skills.

The Canadian public policy think tank also identified the 10 places mining enthusiasts should avoid. From the bottom, they are Kyrgyzstan, Venezuela, Philippines, Argentina (La Rioja and Mendoza), Angola, Zimbabwe, Ivory Coast, Indonesia and Madagascar.

Reprinted by permission of MINING.com

First place, second thoughts

November 8th, 2013

Some potential near-term graphite miners find time to revise their plans

by Greg Klein

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If the graphite game can be called a race to production, some companies seem to prefer the sure and steady progress of the tortoise. The hare’s dazzling example might have been discouraged by this year’s graphite price slump, down 20% according to Industrial Minerals. Even so, the authoritative journal anticipates a recovery next year, although not as strong as 2011. Those conditions might have inspired some front-running companies to revise their previous plans.

One of them is Focus Graphite TSXV:FMS. On November 7 the company released an updated preliminary economic assessment, replacing the previous PEA released in October 2012 for its Lac Knife project in northeastern Quebec. Thanks to streamlined metallurgy, the new study reports improved economics—the pre-tax internal rate of return increases to 36.4%, compared to 32% in 2012, and the pre-tax net present value to $317 million, compared to $246 million last time around.

Some potential near-term graphite miners find time to revise their plans

Flinders hopes to re-open Sweden’s Woxna graphite mine
and plant without undergoing feasibility studies.

Interestingly, the 2012 report omitted after-tax numbers. But the current figures show a post-tax IRR of 28.6% and NPV of $185 million, using an 8% discount rate. Using a 10% discount rate, as was done in 2012, the NPV shows $250.1 million pre-tax and $143.3 million post-tax.

Both studies relied on the January 2012 resource estimate to calculate a 20-year mine life for an open pit unearthing 300,000 tonnes per annum for a lifetime total of six million tonnes averaging 15.66% graphitic carbon (Cgr). But higher-grade concentrates shown by more recent pilot plant tests now cut operating costs.

No longer relying on a third party “and the associated $27.6 million in working capital requirements” to purify some of the concentrate, Focus says an optimized flotation and polishing circuit can produce concentrate of 98% total carbon for all flake sizes above 200 mesh. As a result, the company maintains, even the smaller flake product will see improved economics.

In a statement accompanying the announcement, Focus CEO Gary Economo said the company has started a feasibility study which “moves us closer to financing, securing off-take agreements, permitting and construction.”

Another potential near-term producer reconsidering its plans is Northern Graphite TSXV:NGC. The company first filed a feasibility study for its southeastern Ontario Bissett Creek project in August 2012. An update followed in September 2013. Then, on October 23, Northern announced a PEA that considers doubling mill throughput after three years of operation.

The plan would knock six years off the previous 28-year mine life but increase average annual production to 33,183 tonnes of concentrate, from 20,800 calculated in September. That would result in a 22% after-tax IRR (compared to 17.3% in September) and a $150-million after-tax NPV (compared to $89.3 million), using an 8% discount rate.

The new scenario would help meet expected growth in demand, the company stated. CEO Gregory Bowes sees an advantage for Bissett Creek in a graphite supply chain that he describes as “heavily dependent on China and … characterized by many inefficient producers with poor environmental and labour practices and inconsistent product quality, delivery and reliability.”

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Athabasca Basin and beyond

July 20th, 2013

Uranium news from Saskatchewan and elsewhere for July 13 to 19, 2013

by Greg Klein

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Step-out hole extends PLS zone by 15 metres

The first hole of Patterson Lake South’s summer program found 85.5 metres of “the most abundant off-scale mineralization of any hole drilled on the property,” stated Fission Uranium TSXV:FCU president/COO Ross McElroy. In dual announcements made July 18, Fission and 50/50 joint venture partner Alpha Minerals TSXV:AMW said scintillometer readings show the step-out extends the R390E zone 15 metres grid west. R390E is the middle of three zones along an 850-metre northeast-southwest trend.

Although its readings aren’t substitutes for assays, the scintillometer determines radioactivity by measuring gamma ray particles in counts per second, up to an off-scale reading of more than 9,999 cps. Results for PLS13-072 show:

Uranium news from Saskatchewan and elsewhere for July 13 to 19, 2013

Alpha/Fission’s $6.95-million summer drill program has begun,
with the first hole extending one zone by 15 metres.

  • <300 to >9,999 cps over 85.5 metres, starting at 62 metres in downhole depth
  • (including 1,100 to >9,999 cps over 16.5 metres)
  • (and including 5,000 to >9,999 cps over 6.9 metres)
  • (and including <300 to 8,600 cps over 5 metres)
  • (and including <300 to 720 cps over 2.5 metres).

Assays are pending. True widths weren’t available. Drilling on the hole was suspended due to mechanical failure. All PLS holes will get a radiometric probe to assess radioactivity more accurately.

Interestingly, the drill found no Devonian sandstone between the overburden and the basement bedrock, which started at 55.7 metres’ depth. “This may be a result of the RC rig casing past the overburden and bedrock contact, and so the presence or absence of Devonian sandstone is inconclusive,” stated Alpha’s news release. “Alternatively, the lack of Devonian sandstone and presence of shallower mineralization may indicate that the bedrock source of the high-grade uranium boulders is possibly approaching further to the west of PLS13-072. Other step-out drill holes may resolve this.”

The program uses two diamond rigs in addition to the reverse circulation drill. With a $6.95-million budget, the 44-hole, 11,000-metre drill campaign and ground geophysics surveys continue on the 31,000-hectare property two kilometres from Highway 955.

Fission applies for boulder-finding patent

Along with collaborator Special Projects Inc, Fission wants to patent the system used to discover the PLS high-grade uranium boulder field. Calling it “an invention entitled System and Method for Aerial Surveying or Mapping of Radioactive Deposits,” Fission announced the application on July 16.

The company explained that radiometric surveys can be affected by a number of variables including weather, topography and cosmic activity, as well as more controllable factors such as sensor height and aircraft speed. The invention “is particularly sensitive to addressing these variables,” Fission stated.

The news release didn’t specify the invention of new technology.

Forum extends Key Lake-area holdings

Towards the Athabasca Basin’s southeast corner, Forum Uranium TSXV:FDC picked up the Highrock South property, adding another 1,381 hectares to its Key Lake area holdings. The company’s July 17 announcement states the property “is a continuation of the prospective Key Lake/Black Forest conductive trend” that hosted Cameco Corp’s TSX:CCO former deposits and the geology “compares favourably” with PLS. Highrock South lies about 15 kilometres south of the world’s largest high-grade uranium mill.

Forum pays $2,500, issues 25,000 shares and grants a 2% NSR. The company holds six other projects totalling over 90,000 hectares in the area, as well as other projects in Saskatchewan and Nunavut’s Thelon Basin.

Brades moves into Athabasca Basin

Brades Resource TSXV:BRA marked its Saskatchewan entry with the Lorne Lake acquisition announced July 16. The approximately 39,450-hectare property shows “extensive regional faulting and lineaments and covers one of only three identified cross-cutting major fault structures located in the western Athabasca Basin,” as well as “favourable magnetic geophysical data,” the company stated.

In return, Brades will issue a total of 3.5 million shares to two vendors including Ryan Kalt, who will also get a 2% NSR. On closing the deal, Kalt becomes a company insider.

On July 19 Brades announced the appointment of Evany Hung as CFO, replacing Christopher Cherry. The company also holds the 14,133-hectare BRC porphyry copper-gold property in northwestern British Columbia.

Noka retains Dahrouge Geological Consulting

On July 18 Noka Resources TSXV:NX announced it retained Dahrouge Geological Consulting to manage and explore Noka’s Athabasca Basin properties. Dahrouge and its predecessor, Halferdahl & Associates, have over 40 years’ experience with mineral projects, including over 30 years in uranium, Noka stated. The announcement credited Jody Dahrouge and his team with “the conceptualization and acquisition of several uranium properties within the Athabasca Basin, most notably these include such projects as Waterbury Lake (J zone), Patterson Lake and in part Patterson Lake South.”

Noka’s properties include Clearwater and Athabasca North, as well as a 25% earn-in on the Western Athabasca Syndicate Project, a four-company strategic alliance with Skyharbour Resources TSXV:SYH, Athabasca Nuclear TSXV:ASC and Lucky Strike Resources TSXV:LKY that’s exploring the PLS-area’s largest land package.

Read more about the Western Athabasca Syndicate Project.

Paladin reports quarterly revenue of $107.4 million, record production

Paladin Energy’s TSX:PDN quarterly report, released July 16, showed sales revenue for three months ending June 30 of US$107.4 million. The company sold 2.32 million pounds of uranium oxide (U3O8) at an average price of $46.22 a pound.

Both of the company’s mines achieved quarterly production records. Langer Heinrich in Namibia produced 1.35 million pounds U3O8 while Kayelekera in Malawi gave up 789,430 pounds for a combined 2.14 million pounds, up 8% from the previous quarter. Fiscal 2013 production met guidance with 8.25 million pounds. The fiscal 2014 forecast ranges from 8.3 million to 8.7 million pounds.

The company also stated it had cut production costs by 9% at Langer Heinrich and 24% at Kayelekera, compared with June 2012. Paladin has been negotiating the sale of a minority interest in Langer Heinrich.

As for the company’s other projects, its Michelin property in Labrador has more exploration planned for summer and a resource update scheduled for next quarter. At Western Australia’s Manyingee project, work continues on an updated resource and hydrogeological modelling. Exploration on its Agadez property in Niger, however, has been suspended following the May 23 terrorist attacks that hit a military barracks and a uranium mine operated by AREVA.

In April Paladin became sole owner of the Angela project in Northern Territory, with an inferred resource of 30.8 million pounds, after buying Cameco’s 50% interest. Paladin also holds other Australian properties.

Cameco wants Canada to allow foreign ownership, Paladin concurs

Cameco “has broken ranks with the Canadian government by taking the position that Australian companies should be able to wholly own uranium mines in the country,” reported Australia’s Financial Review (subscription required) on July 15. Not surprisingly the journal added that John Borshoff, managing director/CEO of Australia’s Paladin, “says Canada must heed the words of one of its biggest companies and prioritize lifting restrictions on foreign ownership.”

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Facing Ontario’s challenges

June 14th, 2013

More must be done for the Ring of Fire, says MacDonald Mines’ Kirk McKinnon

by Greg Klein

“The Ring of Fire truly has an array of mineralization unlike any other in the world, says Kirk McKinnon, president/CEO of MacDonald Mines Exploration TSXV:BMK. “Our scientists tell me the Bushveld in South Africa has many of these attributes but the James Bay lowlands has all of them.”

More must be done for the Ring of Fire, says MacDonald Mines’ Kirk McKinnon

There’s even talk of rock worth some $30 billion to $50 billion. But despite the region’s potential for a “suite of minerals” including chromite, vanadium, nickel, copper, zinc and titanium, exploration and development are stymied by a lack of infrastructure. McKinnon discussed these challenges with ResourceClips following news that Cliffs Natural Resources had suspended work on Black Thor, by far the area’s largest project. That June 12 announcement re-kindled debate on how best to build access to the Ring of Fire—from the south or southwest, by road or rail—and whether governments effectively address the region’s challenges.

About 35 kilometres west of Black Thor, MacDonald drills its Butler property, focusing on the Butler 3 volcanogenic massive sulphide target. McKinnon also heads Energizer Resources TSXV:EGZ, whose wholly owned and joint venture claims in Madagascar undergo feasibility for one of the world’s largest known flake graphite deposits. The property also hosts the world’s third-largest known vanadium resource. Yet he can’t speak highly enough about the Ring of Fire’s potential. Another discovery comparable to Cliffs’ could be the catalyst for stronger government commitment to develop infrastructure, he says. But lack of infrastructure makes those discoveries more difficult.

Ontario’s Ministry of Northern Development and Mines struck a Ring of Fire Secretariat specifically to work “with all levels of government, industry and aboriginal peoples to encourage responsible and sustainable economic development in the region.” Last February the federal government appointed Treasury Board president Tony Clement as the go-to guy who would untangle the web of various bureaucracies and stakeholders. But McKinnon says, “For all the conversations we’ve had with the federal and provincial governments focusing on the Ring of Fire, I haven’t seen [commitment] manifested in a vigorous way.”

Not that they’ve lost interest. “I don’t think the zeal for development is gone,” he points out. “The manufacturing sector, which used to drive the province, has significantly shrunk. Because of that they’re looking for secondary activity that will replace that historic engine. The only place it can come from is the development of resources.”

If you’re going to get government funding, a transportation corridor coming out of Pickle Lake would benefit communities like Webequie and something like five to seven different communities overall.—Kirk McKinnon, president/CEO of MacDonald Mines Exploration

Backing the region’s biggest player, the Ontario government supported Cliffs’ proposed road south to the CN TSX:CNR rail line at Nakina. McKinnon thinks a comparable discovery by another company might make the province consider other approaches. Certainly, the transportation debate continues. KWG Resources TSXV:KWG studies the feasibility of a southbound railway while Noront Resources TSXV:NOT promotes an east-west road. McKinnon also favours the east-west route, although he’d prefer rail.

“If you’re going to get government funding, a transportation corridor coming out of Pickle Lake [roughly 260 kilometres southwest of Butler] would benefit communities like Webequie and something like five to seven different communities overall,” he says. “The route that Cliffs is talking about interacts with one community called Marten Falls. Now Marten Falls has about 250 people living there. There are over 600 at Webequie alone.”

The native communities currently rely on light plane service and, during winter, ice roads.

Exploration would benefit too, he maintains. The east-west corridor “would spread along the breadth of a much bigger mineralization opportunity.”

As for electricity, he believes the province could do more to connect the region with the grid. But failing that “there has to be a deal with Manitoba or Quebec.”

“We’ve been up there 10 years and I think we know the people very well,” he adds. Governments could work harder to find “common ground with the natives for development so that after a discovery they can come in and get the appropriate partnership arrangements that they’re looking for. But to do that the government has to stimulate exploration through infrastructure and taking a much more pro-active approach to opening up the country to development.”

As it stands now, “it’s damn expensive to operate up there,” he says. “But there are very big prizes to be had.”

Read more about Ontario’s Ring of Fire.

Read about Kirk McKinnon’s remarks on the state of the juniors.

Carbon chronicles

April 3rd, 2013

A roundup of recent news from the ever-competitive graphite space

by Greg Klein

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While graphite frontrunners like Flinders Resources TSXV:FDR, Northern Graphite TSXV:NGC and Focus Graphite TSXV:FMS work through the pre-development or even pre-production stage, other companies vie for runner-up status. Among news announced April 3, Standard Graphite TSXV:SGH released assays from the final two holes of its 2012 drill campaign. These near-surface results come from the Oat Zone, east of the company’s Mousseau East Deposit in southwestern Quebec, showing 5.69% graphitic carbon over 6.8 metres and 5.73% over 20.1 metres.

True widths weren’t available. The top-most intercept started at a depth of 22 metres down hole while the deepest stopped at 64.6 metres.

A roundup of recent news from the ever-competitive graphite space

Additional assays and metallurgical results are pending
for Rock Tech Lithium’s Lochaber graphite project.

These assays conclude Standard’s 2012 campaign, which verified part of Mousseau East’s historic drilling as well as extending mineralization east and west. (Click here for some previous assays.) The company plans fieldwork and additional drilling this year to better define and expand the mineralization.

The same day Energizer Resources TSX:EGZ reported an analysis that it says further supports the February preliminary economic assessment for its Molo graphite deposit in Madagascar. In a statement accompanying the announcement, Energizer president/COO Craig Scherba said, “If the graphite price falls off by 25% and there is a 20% opex cost over-run, the project still has very positive IRR and NPV values.”

Going back a week, on March 27 Big North Graphite TSXV:NRT announced grab and channel sample assays for its Grand Lac du Nord property in eastern Quebec. The results “confirmed a multiple graphite-bearing structure covering an area approximately four kilometres by two kilometres, with results of up to 5.31% graphite,” the company stated. Its name notwithstanding, Big North also has a southern presence. That’s in Sonora state Mexico, where the company has three projects that include a 50% share in Nuevo San Pedro and 100% of Caraples and La Fortuna, all small-scale past-producing amorphous graphite mines. Last January Big North commissioned an NI 43-101 technical report for Nuevo San Pedro, which the company’s preparing to re-open.

On March 26 Canada Strategic Metals TSXV:CJC announced flake size distribution for grab samples from three parts of its 25-square-kilometre La Loutre property in southern Quebec. The company plans 15 to 20 holes of near-surface Phase I drilling this spring. One day earlier, Graphite One Resources TSXV:GPH announced it commissioned a PEA for its Graphite Creek property, 65 kilometres north of Nome, Alaska. Along with an updated resource, the study is slated for Q1 2014 release.

On March 21 Canada Carbon TSXV:CCB announced more surface sample assays that “confirmed the presence of a high-quality lump/vein graphite deposit” on the former Miller open pit mine about 80 kilometres west of Montreal. The company plans a busy spring with geophysics, channel sampling and drilling.

Speaking of drilling, on March 18 Rock Tech Lithium TSXV:RCK reported more assays from its Lochaber project, also in southwestern Quebec. One hole “intersected 84.56 metres of graphitic carbon at various depths with grades ranging from 1.11% to 4.42% Cg,” while another found 117.99 metres “at various depths with grades ranging from 1.3% to 3.63%.” Still to come are assays for 12 more holes, re-submitted assays from Phase I drilling and test results for flake size distribution and purity.

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Week in review

March 1st, 2013

A mining and exploration retrospect for February 23 to March 1, 2013

by Greg Klein

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Another spring fever for graphite?

As one of Chris Berry’s “energy minerals”, graphite had an energetic week with the biggest news coming from Energizer Resources TSX:EGZ. The company’s Molo graphite deposit in Madagascar reached another milestone Tuesday with its preliminary economic assessment.

But to start with Monday, Rock Tech Lithium TSXV:RCK released drill results from the Plumbago area of its Lochaber project in southern Quebec. The same day Nevado Resources TSXV:VDO did the same thing for its Fermont property in the province’s northeast.

A mining and exploration retrospect

Coinciding with Energizer’s Tuesday release, Pistol Bay Mining TSXV:PST announced an option on the Portland graphite property in southeastern Ontario. Also on Tuesday, Canada Strategic Metals TSXV:CJC released metallurgical tests from its La Loutre property back in southern Quebec.

More metallurgical news came the following day from Standard Graphite’s TSXV:SGH Mousseau East deposit, again in southern Quebec. Then on Thursday Mason Graphite TSXV:LLG weighed in with drill results from Lac Gueret in northeastern Quebec.

No graphite news on Friday, however. Presumably everyone was en route to PDAC 2013, where they’ll conspire to pump up a repeat of last spring’s graphite mania.

No wait, this is the hottest new commodity

“Rhodium, the scarcest precious metal used in making catalytic converters, is outperforming platinum and palladium for the first time in seven years as global car sales rise to a record,” stated a Thursday Bloomberg report.

“The metal, used with palladium and platinum in pollution-control devices, rose 16% this year, about three times the increase of the other two ingredients and 20 times more than the benchmark commodities index (MXWD). Output will trail demand for four more years after the first deficit since 2007 [took place] last year [and eroded] inventories, Standard Bank Plc’s SBG Securities … forecasts.”

It seems to be gaining safe haven status too. “Baird & Co., a UK precious metals dealer, sold about 10,700 one-ounce rhodium bars … more than 10 times the amount planned when production began in May 2012,” the news agency added. “The London-based company expanded with bars that weigh one-tenth an ounce to five ounces to meet increased demand.”

A Baird spokesperson told Bloomberg, “At the moment we can’t make them quick enough so we are stepping up production. The market is so thin that it just needs a car company to buy a year’s worth of production or a hedge fund to pull out a little bit of loose change. It doesn’t take a lot to create quite sharp price movements.”

De Beers blockade: Cops’ lack of resolve resolves nothing

At press time Friday, De Beers’ Victor diamond mine in northern Ontario had gone seven (7) days without an illegal native blockade. The most recent roadblock ended late February 22 when the five or six protestors simply left. Then, and only then, did police move in.

So far the company has lost nearly half of an approximately 45-day opportunity to haul a year’s worth of heavy supplies over a seasonal ice road. As a result, the mine might face a temporary shutdown, the Timmins Daily Press reported on Tuesday.

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