Saturday 22nd October 2016

Resource Clips

Posts tagged ‘mongolia’

Kyrgyzstan gains B.C. foothold as Centerra hedges jurisdictions

July 5th, 2016

by Greg Klein | July 5, 2016

A “balanced geopolitical risk profile” would counter Centerra Gold’s (TSX:CG) Kyrgyzstan woes with a solid foundation in more favourable countries. But with Kyrgyzstan currently holding nearly a third of Centerra shares, that country retains a sizeable piece of the action. Late July 5 Centerra announced a definitive agreement to pick up Thompson Creek Metals TSX:TCM and its Mount Milligan copper-gold mine in British Columbia. Also included are Thompson Creek’s Endako molybdenum mine in B.C. and its Thompson Creek moly mine in Idaho, both on care and maintenance, as well as two development projects in B.C.

Kyrgyzstan gains B.C. foothold as Centerra hedges jurisdictions

Gold miner Centerra takes on Thompson
Creek’s debt to move into a safer jurisdiction.

Subject to approvals, the share swap values Thompson Creek at C$0.79, a 33% premium to the company’s 20-day volume-weighted average to July 4. The deal would leave Thompson Creek shareholders with about 8% of Centerra. The company also pays off Thompson Creek’s outstanding notes. The companies value the transaction at approximately US$1.1 billion.

Royal Gold’s Mount Milligan gold stream would drop from 52.25% to 35% in exchange for an 18.75% copper stream.

The deal gives Centerra “an operating base in Canada—one of the lowest-risk mining jurisdictions in the world—which will complement our [50%-held] Canadian-based Greenstone project and provide for further flexibility to expand into the Americas,” commented CEO Scott Perry.

In addition to its flagship Kumtor gold mine in Kyrgyzstan, Centerra holds Mongolia’s Boroo gold mine, currently on care and maintenance, and two advanced-stage gold projects in Mongolia and Turkey.

At the company’s May AGM the CEO reportedly acknowledged that Kyrgyzstan is “not viewed as a top-tier jurisdiction”—a considerable understatement. Out of 109 countries ranked by the Fraser Institute’s annual mining survey, Kyrgyzstan ranks 19th from last on the Investment Attractiveness Index and eighth from last on the Policy Perception Index. B.C., although no paradise itself for miners, ranks 18th from top on the IAI and 41st on the PPI.

Centerra’s Kyrgyzstan adversities have included a police raid on the company’s office, a US$220-million pollution fine, a US$9-billion claim by the country’s Green Party, criminal investigations against the company’s executives, a ban on executives leaving the country, the arrest of a former CEO in Bulgaria reportedly at Kyrgyzstan’s behest, illegal roadblocks, violent mobs, and the arrest and deportation of a Centerra welder after he posted a Facebook remark comparing a local sausage to “horse penis.”

Centerra holds a 100% interest in Kumtor but Kyrgyzstan holds 32.7% of Centerra. In December the company offered to trade a 50% stake in the mine for the country’s shares. But now Kyrgyzstan faces dilution through the C$170-million bought deal Centerra also announced on July 5.

The company expects to close the offer around July 20 and the acquisition in autumn.

May 9th, 2016

When will uranium emerge from the shadow of Fukushima? Streetwise Reports
Rio approves $5.3-billion Oyu Tolgoi copper mine expansion NAI 500
Graphite demand from lithium-ion batteries to more than treble in four years Benchmark Mineral Intelligence
China: Still the world’s number one heavy metal rock star Stockhouse
SWOT analysis: Central bank over-reach benefits gold GoldSeek
Grid energy storage: The next big thing for li-ion? Industrial Minerals
Gold stock rally’s market cap bias may surprise you SmallCapPower

May 6th, 2016

Rio approves $5.3-billion Oyu Tolgoi copper mine expansion NAI 500
Graphite demand from lithium-ion batteries to more than treble in four years Benchmark Mineral Intelligence
Some of Brien Lundin’s precious metals picks are up more than 400%. What’s next? Streetwise Reports
China: Still the world’s number one heavy metal rock star Stockhouse
SWOT analysis: Central bank over-reach benefits gold GoldSeek
Grid energy storage: The next big thing for li-ion? Industrial Minerals
Gold stock rally’s market cap bias may surprise you SmallCapPower

Some Robert Friedland riffs

July 29th, 2015

The “miner’s miner” talks commodities, jurisdictions, markets and majors

by Greg Klein

A “miner’s miner” was how Rick Rule introduced Robert Friedland. The founder and executive chairperson of Ivanhoe Mines TSX:IVN also serves as executive chair of the Sprott-Stansberry Natural Resource Symposium in Vancouver, where he delivered the opening day’s keynote speech on July 28. That was the original plan, anyway. Instead, a relaxed-looking Friedland eschewed a script to sit back and, in response to questions posed by Rule, discuss commodities, jurisdictional risk, markets and the problem with the majors.

Friedland’s favourite metals? They’re currently copper, platinum, palladium and zinc—stuff for which he sees bright futures and, not surprisingly, the stuff he’s currently pursuing. He also likes diamonds but considers himself “an agnostic on gold.”

The “miner’s miner” talks commodities, jurisdictions, markets and majors

A community group poses on Ivanhoe’s Platreef
project, expected for 2019 production.

“Copper is the metal if you believe in human advancement,” Friedland says. “Gold is the opposite.” Meanwhile this market has either hit bottom “or it’s the end of the world.” He says he’s never seen such a severe devaluation, with stocks “priced for Armageddon.”

He’s cynical of the prognosis industry. The media report obituaries for all commodities, disregarding the bullish case that Friedland sees for some metals. JP Morgan, he points out, couldn’t predict oil’s fall. Goldman Sachs’ forecasts come from “just two guys, they don’t really know, they go to the bathroom about as often as the rest of us.”

As for his own forecasts, Friedland sees economic recovery and growth, as well as specific mining opportunities because “you can’t have economic growth without copper.” He notes recovery in Europe and describes the U.S. undergoing a “slow, gentle, lousy recovery,” but a definite recovery just the same.

He considers the collapse of Chinese equity markets to be an issue separate from the country’s underlying economy. “It’s definitely not 1929 in China,” Friedland emphasizes. Run by a powerful boss, the country’s “command economy” continues to grow. Chinese hold huge personal savings. With a currency stronger than the U.S. dollar, the country now has its own de facto reserve currency.

Even if China’s economy grows 3% to 4% a year, “it’s still an enormous disruption.”

Getting back to commodities, he argues that Saudis killed the Alberta oilsands and devastated U.S. shale “but no one can do that to copper.” Friedland dismisses some copper miners as “little old ladies waiting to die,” saying some grades fall so low that companies are “practically mining air.”

Serious debt prevents most majors from building big copper mines, Friedland contends. Yet his Oyu Tolgoi discovery, “the world’s highest-grade copper mine,” will undergo major expansion following last May’s agreement between operator Rio Tinto NYE:RIO and the Mongolian government.

The long, painful process of building Oyu Tolgoi “was like a woman giving birth to a 20-kilogram baby.” But it’s high grades, not jurisdictions, that attract Friedland. In fact he sees jurisdictional risk everywhere.

But the Democratic Republic of Congo inspires him to say, “If I were a dry cleaner I’d work there.” Just the same, a deal announced in May with the Zijin Mining Group on Ivanhoe’s Kamoa copper discovery would help “defuse” jurisdictional risk thanks to China’s “very good relations” with the DRC. Once again Friedland finds very high grades—the world’s largest undeveloped high-grade copper discovery—as well as the cost benefits of a country with cheaper currency.

Ivanhoe’s other DRC project, the past-producing Kipushi mine, boasts world-class zinc grades as well as copper. As an additive for agricultural fertilizer, zinc has “an absolutely brilliant future,” Friedland says.

More high grades in South Africa’s Bushveld complex are complemented by the “ever-depreciating rand.” Friedland expects Ivanhoe’s majority-held Platreef to begin production by 2019, making it among the world’s largest platinum-palladium mines, as well as a producer of nickel, copper, gold and rhodium.

While other South African miners struggle with very deep, highly labour-intensive operations, Platreef will be shallower and mechanized. “No one has to lift more than a pencil.”

As a self-made success, Friedland denigrates those who run some of the world’s biggest companies. Pointing to the iron ore wars, he says the big players seem committed to “destroying each other through a war of attrition”

He says the people who run major miners “are just driving the bus.” Heads of companies like Anglo American and BHP Billiton NYE:BHP don’t hold significant stock positions in their companies, he claims. While majors struggled through the adversity of the last few years, boards blamed CEOs and fired them. Their replacements, Friedland insists, are “risk-averse.”

As for the guy who first hit the big time over 20 years ago at Voisey’s Bay, “I made my own money.”

The Sprott-Stansberry Vancouver Natural Resource Symposium continues to July 31.

Athabasca Basin and beyond

May 1st, 2015

Uranium news from Saskatchewan and elsewhere to May 1, 2015

by Greg Klein

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NexGen ends winter with outstanding step-outs, plans 2015 maiden resource

Following a season in which 44 of 46 holes at Rook 1’s Arrow zone found mineralization, the last one released by NexGen Energy TSXV:NXE showed the project’s highest total composite mineralization. That April 29 announcement followed an April 23 batch of results that included some of the zone’s strongest offscale radioactivity. Although lots of assays are still pending, drilling resumes in early June with five rigs expected to sink a total of 25,000 metres. The longer-term goal is a maiden resource by December.

Winter’s record-breaker was angled hole AR-15-45b, which drilled through A2 and A3, two of the zone’s three mineralized shears. It returned a composite 226 metres of mineralization distributed within a 468-metre section starting at 391 metres in downhole depth. Included was a composite 9.8 metres that went “offscale” between 10,000 and 54,000 counts per second.

The results come from a hand-held scintillometer that measures drill core radioactivity. Readings above 10,000 cps are considered offscale due to the limitations of earlier devices. These measurements don’t substitute for assays, which have yet to arrive.

Another radioactive announcement six days earlier heralded a substantial expansion to A2’s high-grade core, some of Arrow’s strongest off-scale measurements and semi-massive to massive pitchblende that would make a geologist’s mouth water. Currently marking Arrow’s southwestern border, hole AR-15-44b stepped out 76 metres southwest along strike from AR-14-30, which last October assayed 7.54% U3O8 over 63.5 metres.

AR-15-44b found a composite 190.7 metres within a 519-metre section, starting at 430.5 metres in depth. The results included an offscale composite of 40.45 metres.

Other highlights include:

  • AR-15-43a, with 92 composite metres within a 501.5-metre section, starting at 346 metres

  • AR-15-42a, with 68.9 composite metres within a 592.5-metre section starting at 142.5 metres

Arrow now covers 515 metres by 215 metres, with mineralization found vertically at depths between 100 metres and 920 metres. Still open in all directions and at depth, the zone boasts significant off-scale mineralization at both its southwestern and northeastern extents.

Beyond Arrow, NexGen’s winter season also resulted in Rook 1’s Bow discovery.

Athabasca Basin bought deals: Fission closes $20 million, Denison announces $15 million

April 29 proved a good day for uranium financings as the Basin’s two most prominent explorers announced substantial bought deals. Fission Uranium TSX:FCU completed a private placement of 13.34 million flow-through shares at $1.50 to bring in $20.01 million. Denison Mines TSX:DML announced an agreement to purchase 12 million flow-through shares at $1.25 for $15 million, an offer that’s expected to close around May 26.

Fission’s placement started at $15 million on April 1. Within hours the figure rose to $17.4 million. With the underwriters exercising their additional 15% option, the deal closed on $20.01 million. Earlier this month the company finished its winter program at Patterson Lake South, which strived to expand and upgrade the Triple R deposit and the R600W zone, as well as explore the PLS property farther afield.

Denison also wrapped up winter work earlier this month after sinking 61 holes totalling 30,400 metres on seven projects, most of them joint ventures. Summer plans call for about 34,000 metres on eight projects, focusing on the flagship Wheeler River project, which has a maiden resource for the Gryphon zone planned for December to complement the very high-grade Phoenix deposit three kilometres southeast. Denison holds 60% of the JV with Cameco Corp TSX:CCO (30%) and JCU (Canada) Exploration (10%).

Also announced April 29, Cameco’s Q1 results showed $566 million in revenue, a 35% increase over the same period last year. Gross profit reached $129 million, a 19% increase. But a net loss attributable to shareholders sunk to $9 million, or $0.02 per share diluted, 107% below Q1 2014 performance. The company attributed blame “primarily due to higher mark-to-market losses on foreign exchange derivatives.”

In a more modest financing the following day, Kivalliq Energy TSXV:KIV closed the final tranche of a private placement totalling nearly $2.8 million. UEX Corp TSX:UEX offered a $2.5-million placement on April 21.

Phase I drilling finds U3O8 at Lakeland Resources’ Star/Gibbon’s Creek project

Assays released May 1 show a promising start to Lakeland Resources’ (TSXV:LK) Star/Gibbon’s Creek project. As a result the company plans geophysics and drilling to complement last winter’s 14-hole, 2,550-metre program on the road-accessible property a few kilometres from the town of Stony Rapids, on the Basin’s north-central rim.

Among highlights from the project’s South trend was hole GC15-03, immediately below the sub-Athabasca unconformity, which showed:

  • 333.8 ppm U3O8 over 1.1 metres, starting at 106.8 metres in downhole depth
  • (including 0.13% over 0.23 metres)

True widths weren’t available.

The hole also revealed uranium enrichment, strong hydrothermal alteration and the pathfinder elements boron, cobalt and nickel between 106.8 and 133 metres in depth.

Additional anomalous uranium came from two holes north and south of GC15-03:

Phase I drilling finds U3O8 at Lakeland Resources’ Star/Gibbon’s Creek project

Drill results show uranium enrichment, strong hydrothermal
alteration and pathfinder geochemistry for hole GC15-03.


  • 86.7 ppm over 1 metre, starting at 114.2 metres


  • 123.3 ppm over 2.1 metres, starting at 103.4 metres

GC15-02, collared near an historic hole that assayed 0.18% over 0.13 metres, showed:

  • 120.3 ppm over 1 metre, starting at 101 metres

At the South zone’s eastern end, GC15-10 returned “a strong illite clay alteration assemblage from the unconformity (80.9 metres) to 148 metres’ depth,” Lakeland stated. “This interval corresponds to a zone of strong ductile shearing and local brittle-ductile cataclastic brecciation.”

GC15-06 on the Centre zone tested an area with some of the Basin’s strongest land-based RadonEx measurements. “Highly anomalous geochemical pathfinders were noted throughout the hole, including a zone of uranium enrichment from approximately 41 metres to 109.5 metres in depth.”

The company now plans airborne electromagnetics on the project’s eastern margins, ground gravity at the South trend and additional RadonEx surveys. Further drilling around GC15-06 and the South trend will follow.

“Given the early stage of exploration at Gibbon’s Creek, results obtained from this first round of drilling are very encouraging,” said president Jonathan Armes. “The geochemical, clay and alteration results are suggestive of a nearby basement-hosted or unconformity-hosted uranium occurrence…. Lakeland will have multiple exploration programs ongoing in and around the Athabasca Basin this summer and fall, which should provide for an exciting year.”

With one of the Basin-region’s largest portfolios, Lakeland currently holds 32 properties totalling over 300,000 hectares. Among other drill-ready projects are Newnham Lake, east of Star/Gibbon’s, and Lazy Edward Bay on the Basin’s southern rim.

Last week the company appointed well-known geologist Jody Dahrouge to Lakeland’s board of directors. During his 25-year career he played a key role in Fission Energy’s acquisition of Waterbury Lake, Patterson Lake and Patterson Lake South. Waterbury Lake now hosts the J-zone discovery, while PLS holds the Triple R deposit.

Read more about Lakeland Resources’ Star/Gibbon’s Creek project.

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Athabasca Basin and beyond

March 21st, 2015

Uranium news from Saskatchewan and elsewhere to March 20, 2015

by Greg Klein

Next Page 1 | 2

Step-outs renew Fission’s interest west of PLS resource

The zone’s five previous holes found disappointingly low grades but Fission Uranium’s (TSX:FCU) most recent drilling brings new attention to R600W, 555 metres west of the Triple R deposit that surprised even some of the more optimistic Patterson Lake South-watchers. The most westerly of four PLS zones got five more holes this season, four showing mineralization in basement rock and three suggesting high grades over significant widths, the company announced March 18.

These results, no substitute for the still-pending assays, come from a scintillometer that measures drill core radiation in counts per second.

Hole PLS15-364, 570 metres west of Triple R, hit a composite total of 45.5 metres of mineralization over a 61-metre section starting at 107 metres in downhole depth. A composite 6.44 metres surpassed 10,000 cps, a level sometimes termed “offscale” due to the limitations of earlier scintillometers.

PLS15-352 revealed a continuous 56.5-metre intercept starting at 102.5 metres that included continuous “offscale” readings for 11.77 metres. PLS15-360 showed 25 continuous metres starting at 111 metres, while PLS15-364 gave up 40.5 continuous metres starting at 107 metres.

True widths weren’t available.

The angled holes have expanded the zone’s strike to 45 metres, a 50% increase that extends PLS’s potential strike from 2.24 to 2.25 kilometres. R600W’s lateral width extends up to about 30 metres. Results have “substantially increased our understanding of the geometry and tenure of the mineralization,” said Fission COO/chief geologist Ross McElroy.

While delineation continues at Triple R, R600W has more drilling to come.

Read more about the Triple R resource estimate.

See an historical timeline of the PLS discovery.

NexGen continues to find high grades at Rook 1’s Arrow zone

Its first two batches of winter assays once again have NexGen Energy’s (TSXV:NXE) Rook 1 project vying for attention with Fission’s Patterson Lake South. On March 17 NexGen announced the project’s widest high-grade interval yet, hitting 70 metres of 2.2% U3O8. Two days later the company confirmed an 88-metre strike extension from AR-14-30, an outstanding hole released last October. The results come from Rook 1’s Arrow zone, defined last month as three mineralized shears named A1, A2 and A3.

The star hole from the first batch, AR-15-34b, was a 30-metre step-out from October’s AR-14-30, centrepiece of the A2 shear. Although the new hole’s other intercepts fell far short in grade and thickness, these intervals brought redemption, the first from A2, the second from A1:

  • 2.2% U3O8 over 70 metres, starting at 522 metres in downhole depth
  • (including 8.95% over 11 metres)

  • 0.12% over 32 metres, starting at 697 metres

As for some other highlights:


  • 0.26% over 12.5 metres, starting at 548.5 metres


  • 0.33% over 18.5 metres, starting at 394.5 metres

  • 0.49% over 12 metres, starting at 553.5 metres


  • 0.32% over 51 metres, starting at 167 metres

  • 0.1% over 61.5 metres, starting at 248 metres

True widths weren’t available. AR-14-36 was a vertical hole. The others were sunk at a dip of -70 or -75 degrees.

Assays for two angled holes released two days later inspired additional confidence in A2. Highlights show:


  • 2.46% over 16.5 metres, starting at 580.5 metres
  • (including 12.85% over 3 metres)

  • 0.34% over 13.5 metres, starting at 602 metres

  • 2.88% over 40 metres, starting at 621.5 metres
  • (including 4.92% over 22 metres)


  • 0.75% over 6 metres, starting at 664 metres

  • 0.9% over 32 metres, starting at 583.5 metres

Again, true widths weren’t provided. The latter hole confirms an 88-metre strike expansion southwest of AR-14-30, NexGen stated.

The Arrow zone covers about 515 metres by 215 metres with mineralization starting at about 100 metres in depth and now extending to 820 metres. The zone remains open in all directions and at depth.

NexGen has further drilling planned for the A2 shear as well as the newly discovered high-grade area within A3. At last count the season’s program had completed 38 holes, according to the March 19 press release, or 39, according to a February 24 statement. Roughly a third of the 18,000-metre winter agenda has been drilled.

Phase I drilling finds anomalous radioactivity at Lakeland Resources’ Star/Gibbon’s Creek

Uranium news from Saskatchewan and elsewhere to March 20, 2015

The first round of drilling went radioactive at
Lakeland Resources’ Star/Gibbon’s Creek project.

Lakeland Resources TSXV:LK wrapped up a successful 14-hole, 2,550-metre winter program by reporting anomalous radioactivity at its Star/Gibbon’s Creek project on the Athabasca Basin’s northern rim. While assays are pending, initial results also reveal “alteration suggestive of a proximal basement-hosted or unconformity-hosted uranium occurrence,” said company president Jonathan Armes on March 12.

Six holes along a corridor about 1.5 to two kilometres long struck the unconformity at depths of less than 125 metres, finding either anomalous radioactivity, alteration or both. The results confirm the trend as a high-priority target.

Three other holes along a one-kilometre corridor near the head of the Gibbon’s Creek boulder field found the unconformity at depths of less than 110 metres, again intersecting either anomalous radioactivity, alteration or both and confirming another high-priority target.

The readings come from a downhole scintillometer and are no substitute for assays, which will follow. Lakeland attributes background radioactivity to readings of 10 to 100 cps. Results show these anomalous levels of at least 800 cps over 0.3 metres:

Hole GC15-01

  • An average 1,104 cps over 0.4 metres starting at 81.2 metres in downhole depth. The maximum level hit 1,379 cps.


  • An average 1,204 cps over 0.3 metres starting at 99 metres, with a maximum of 1,589 cps

  • An average 1,072 cps over 0.7 metres starting at 99.6 metres, with a maximum of 1,312 cps


  • An average 2,828 cps over 1 metre starting at 107.1 metres, with a maximum of 7,926 cps


  • An average 1,415 cps over 0.6 metres starting at 102.9 metres, with a maximum of 1,740 cps

True widths weren’t available. Along with the other anomalous results, hole GC15-03 is considered highly anomalous.

To further solidify targets, the project also underwent a 270-station ground gravity survey.

“During the coming weeks we will be in receipt of geochemical results for uranium and pathfinder elements such as boron, nickel, cobalt and arsenic,” Armes stated. “As with other historic uranium discoveries within the Athabasca Basin, each successful drill program helps guide the next towards the discovery of a new uranium occurrence.”

The road-accessible project sits a few kilometres from the town of Stony Rapids, with nearby infrastructure.

Lakeland also holds drill-ready projects at Newnham Lake, east of Star/Gibbon’s, and Lazy Edward Bay on the Basin’s southern rim. Late last month the company expanded its holdings to 32 properties totalling over 300,000 hectares, one of the largest portfolios in the Basin region.

As of March 12 Lakeland’s treasury held close to $3 million.

Read more about the Star/Gibbon’s Creek project.

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Rio Tinto’s diamond-loving boss talks of further development at Diavik

November 12th, 2014

by Greg Klein | November 12, 2014

Speaking to Bloomberg at the Asia-Pacific Economic Cooperation conference in Beijing on November 10, Rio Tinto NYE:RIO chief executive Sam Walsh took questions on topics ranging from Turquoise Hill in Mongolia to potential asset sales and diamonds.

Rio Tinto’s diamond-loving boss talks of further development at Diavik

Rio’s Walsh: “Diamonds?
I love diamonds.”

Referring to delays with the Mongolian copper-gold deposit, he said, “It’s a big project and it’ll have a 50-year life and it’s important for everybody to get it right. So I’m willing to be patiently impatient as we wait for the approval.” His company hasn’t set any deadlines, he added. “Deadlines don’t work anyway, as a matter of fact.”

Asked about shedding assets like Rio’s diamond unit or its interest in the Iron Ore Company of Canada, Walsh pointed out that his company has already divested assets worth $17.6 billion over the last seven years. “There’s a little bit of further clean-up to do but nothing major. Diamonds? I love diamonds. I think it’s a seriously good business and as you go forward the opportunities really are seriously good.”

“It’s not an asset I would like to divest of, no. It’s an asset I would like to nurture and we’ve got an opportunity in Diavik north of Yellowknife for a further development that you may hear about next year.”

Rio has a 60% interest in the Northwest Territories diamond mine, with Dominion Diamond TSX:DDC holding the rest.

While his remarks seem encouraging for Diavik, Rio dumped 30 to 40 employees from its Argyle diamond mine, the West Australian reported November 12. The operation’s maintenance shutdown will reduce the company’s overall 2014 guidance to 15 million carats from an originally planned 16 million, the paper stated.

Watch the Bloomberg interview.

Financing the ‘weird stuff’

April 3rd, 2014

Industrial minerals explorers gain profile as security of supply becomes increasingly crucial

by Greg Klein

Precious and base metals need little if any introduction. But, according to Secutor Capital Management Corp’s Arie Papernick, investors are often “at a loss for the unconventional weird stuff”—the subject of the Industrial Minerals International Congress and Exhibition held in Vancouver from April 1 to 3. Addressing the April 2 Finance Session, Papernick called the commodities “a play on the end product,” often of new technologies like electric cars and renewable energy. But the end users are usually private. “So where do you go for exposure?” he asked. “You have to go to the explorers.”

The two-hour session brought five of those explorers together with potential investors, and not only of the retail and institutional categories. As some of the companies have found, manufacturers are showing increasing interest in the people who can help attain reliable, secure sources of the stuff they need to make an amazingly diverse range of products that we take for granted.

Industrial minerals explorers gain profile as security of supply becomes increasingly crucial

Commerce Resources TSXV:CCE director Chris Grove explained that a somewhat traditional scenario has Asian interests backing a project around the pre-feasibility stage with a joint venture or loan guarantee. “What we’re seeing with this conflict minerals legislation is interest coming from manufacturers who have a listing on a U.S. exchange, and I’m talking about companies that are household names.”

The Dodd–Frank Act “holds 6,000 companies accountable as to where they procure their three Ts [tantalum, tungsten and tin], and whether they buy these from people who have committed the worst and longest-running record of human rights abuses on the planet in the last 20 years.”

That gives Commerce a strong jurisdictional advantage over countries like the Democratic Republic of Congo. In British Columbia the company has taken its Upper Fir tantalum-niobium deposit to a preliminary economic assessment. In Quebec Commerce advances its Ashram rare earth deposit towards pre-feasibility.

Attending a panel discussion were representatives from the five explorers, each with “its own unique strength or niche,” said moderator Derek Hamill, head of research for Zimtu Capital TSXV:ZC. Each company offered a different perspective on financing.

Alan Young, an engineer and director of frac sand explorer Rainmaker Mining TSXV:RMG, portrayed tough environmental regulations as an investment advantage. The U.S. has “a lot of one- or two-man companies that aren’t regulated as clearly as we might be here in Alberta and British Columbia,” he said. Canada’s professionalism achieves “a quality well with very, very low risk to the environment.”

Explorers’ challenges can differ with each type of mineral. Big North Graphite TSXV:NRT president/CEO Spiro Kletas said his commodity requires “a race to the finish line. It’s not like gold, where there’s always a buyer waiting. If you don’t have a buyer, you’re stuck with mountains of graphite.”

Consequently the company aims to “pick up past producers with low capital needed to re-start and get product to market in near future.” Big North is already test-mining and selling amorphous graphite from a small JV in Mexico. The revenue means “we’re not quite at the mercy of markets that a pure exploration play would be.”

When asked to account for his commodity, Prima Fluorspar TSXV:PF president/CEO Robert Bick points to end products as diverse as aluminum, Gore-Tex, refrigerants and pharmaceuticals. “We wouldn’t have the quality of life that we have without fluorspar—it’s simply not possible.”

Another atypical story, Prima began as an early-stage explorer focused on the Liard project in northern B.C. Then the company attracted the attention of multi-billion-dollar fund manager Firebird. As owner of the Delgerkhan past-producing fluorspar mine in Mongolia, “Firebird came to us with several objectives,” Bick said. “They wanted to join a company with a fluorspar asset and a listing on a recognized exchange.”

We wouldn’t have the quality of life that we have without fluorspar—it’s simply not possible.—Robert Bick, president/CEO of Prima Fluorspar

The two signed a letter of intent which would result in a reverse takeover while Prima acquires Delgerkhan. But along with its exchange listing, Prima brings heavy-hitting technical expertise. That includes Michel Robert, “probably one of the best mining engineers in the world, who has a close relationship with us, a lot of experience with industrial minerals on the metallurgical side and the engineering side, and has rehabilitated 10 mines in his life,” said Bick. “We actually took [Firebird’s] plan, ripped it inside out and told them what they really had.”

What they found was the former Soviet-era mine and its records “are first rate,” he added. In a country with something like 129 fluorspar deposits, Delgerkhan is “probably the foremost fluorspar mine in Mongolia.”

With 15 uranium properties in Saskatchewan’s Athabasca Basin, Lakeland Resources TSXV:LK might have a portfolio that exceeds its budget. But “most of the properties have an awful lot of historic data,” said corporate communications officer Roger Leschuk. Money spent by previous companies helps focus priorities. Lakeland also likes the JV model, having so far brought in Star Minerals Group CSE:SUV and Declan Resources TSXV:LAN as partners on different projects.

Declan’s $1.25-million first-year spending commitment has already accelerated work on their drill-ready Gibbon’s Creek project. Exercising a four-year option to earn 70% would entail Declan spending $13 million. Lakeland, meanwhile, keeps its eyes open for other potential partners for other projects.

The Industrial Minerals Finance Session drew “quite an interesting audience,” said Zimtu president Dave Hodge. “We have people from all over the world that are involved in what people consider unusual commodities—that’s about half the room. The other half of the room are people who are involved in financing exploration on a global basis.” But the end users, Hodge emphasized, “are much more dependent than they realize” on explorers for consistency and security of supply.

Disclaimer: Zimtu Capital Corp, Lakeland Resources Inc, Prima Fluorspar Corp and Commerce Resources Corp are clients of OnPage Media Corp, the publisher of The principals of OnPage Media may hold shares in those companies.

Inescapable but obscure

March 27th, 2014

Industrial minerals, their uses and opportunities, are the topic of an April 2 Vancouver conference

by Greg Klein

Industrial minerals manage to be inescapable but obscure. Like base metals, and much more so than precious metals, they’re all around us. If they weren’t, our lives would be very different. Yet investors and even end users often show little awareness of the process of finding and extracting these commodities. Organizers of an April 2 conference in Vancouver hope to change that.

The free event is part of the Industrial Minerals International Congress and Exhibition, this year celebrating its 40th anniversary in Vancouver from April 1 to 3. As usual the event brings together industry leaders, often end users who are experts in their own niche markets. A new feature, the April 2 Finance Session, “will bring financiers as well as end users together with exploration companies,” says one of the organizers, Zimtu Capital TSXV:ZC president Dave Hodge.

Consider the car, bike or transit vehicle you likely use to get around. Apart from the better known metal alloys, a number of other minerals are used to manufacture its various components. Consider the additional minerals used just to enable the manufacturing process—to build the plants, refineries, refractories, tools, machinery, computers. Consider the minerals used to find, obtain and transport those commodities.

Industrial minerals, their uses and opportunities, are the topic of an April 2 Vancouver conference

So many of the products we take for granted
rely on little-known commodities for their manufacture.

Or start all over again with a different type of product, from necessities like food, clothing and communications to luxuries like entertainment. They depend on an awful lot of industrial minerals.

“For the most part they’re considered critical commodities, in that supply is fairly tight,” explains Hodge. “In general they rarely have practical substitutes.”

According to Zimtu head of research Derek Hamill, “One of the fundamental differences between base metals or energy metals versus industrial minerals is the exchange. Usually copper will trade on a major exchange so you can follow the pricing. Oil is very similar but the price for commodities in the industrial sector is opaque. So in this session we’re trying to show people some of the commodities and their potential. I think they’ll be surprised, actually.”

Hodge adds, “As the global commodity scene tightens, it’s more important for companies that buy industrial minerals, as well as investors, to understand exploration.”

As a prospect generator, Zimtu’s actively involved in matching exploration companies with properties, often involving relatively obscure commodities, and helping build those companies. But ask Hodge if end users understand the exploration process and he laughs out loud. “Absolutely not!” he exclaims. “The two businesses are so different. In many respects industrial minerals users follow very traditional business formats where they try to make money on every transaction. Of course that’s very, very different from mineral exploration and it’s challenging for either of those two sides to understand completely how the other side operates.”

Chaired by Laura Syrett, prices editor for the authoritative journal Industrial Minerals, the Finance Session features a keynote speech by Arie Papernick of Secutor Capital Management Corp’s Investment Banking department. Hamill moderates a panel discussion featuring representatives of five companies pursuing different minerals. An informal networking opportunity follows.

“The panel will discuss topics including current developments and potential growth factors,” Hamill says. “We’ll also discuss challenges like how to calculate the net asset value of a project in an opaque pricing market and the risks people face. We’ll look at the progress of individual projects, potential end users, financing and other subjects.”

Hamill notes some growing awareness among end users already. “Especially with conflict minerals legislation in the U.S., there’s more concern about where supply comes from,” he says. “There’s security of supply issues too, when sources come from a country like China.”

Hodge sees the event offering synergies for explorers, investors and end users who can “learn how to secure a more steady supply of the very minerals they grow their business with.”

Among the companies present, Prima Fluorspar TSXV:PF has an early-stage project in northern British Columbia and an LOI to acquire the Delgerkhan mine in Mongolia, a past-producer with near-term potential.

Especially with conflict minerals legislation in the U.S., there’s more concern about where supply comes from. There’s security of supply issues too, when sources come from a country like China.—Derek Hamill, head of research for Zimtu Capital

Commerce Resources TSXV:CCE has advanced its Upper Fir tantalum-niobium deposit in southeastern B.C. to the preliminary economic assessment stage and is moving its Ashram rare earth deposit in Quebec’s Labrador Trough towards pre-feasibility.

Canadian Metals CSE:CME focuses on high-purity silica sand properties in B.C. and Quebec. Big North Graphite TSXV:NRT is test-mining and selling amorphous graphite from a joint venture in Mexico and holds flake graphite properties in Mexico and Canada.

Lakeland Resources TSXV:LK holds interests in 15 Saskatchewan uranium properties, one of them showing surface boulder samples grading up to 4.28% uranium oxide (U3O8) and some of the Athabasca Basin’s highest radon readings.

Among the conference sponsors is the Canadian Securities Exchange. James Black, VP of listings development, says that Hodge is “very passionate about this space, he thinks there’s a ton of potential in it and we’d like to be alongside those prospects letting them know what we’re doing.”

“We’re happy to look at all sectors but industrial minerals is an area that’s gaining more interest, so we like to be where the interest is. We like to support Vancouver and be front and centre when these things happen.”

The fact that Industrial Minerals chose Vancouver for its congress “is very significant,” says Hodge. “At this time in particular, with commodities in general being on the low end of the supply scale, there’s a need for exploration of all kinds of minerals, including industrial minerals. Vancouver is essentially the global centre of exploration.”

The Industrial Minerals Finance Session takes place April 2, from 3:00 to 5:00 p.m., at the Sheraton Wall Centre in Vancouver. Refreshments and informal networking follows. For free attendance, RSVP to Matt Sroka at

Disclaimer: Zimtu Capital Corp, Lakeland Resources Inc, Prima Fluorspar Corp and Commerce Resources Corp are clients of OnPage Media Corp, the publisher of The principals of OnPage Media may hold shares in those companies.

Athabasca Basin and beyond

January 19th, 2014

Uranium news from Saskatchewan and elsewhere for January 11 to 17, 2014

by Greg Klein

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Fission Uranium’s Patterson Lake South gives up more high-grade assays

More results from Fission Uranium’s TSXV:FCU Patterson Lake South show last summer’s sowing continues to reap high-grade rewards. Released January 15, the latest batch comes from two holes on the Athabasca Basin project’s R390E zone and four on the R780E zone, the third and fifth of seven zones trending northeast.

All holes were vertical or near-vertical. The R390E zone currently has a strike length of 255 metres and a lateral width of about 40 metres. Some highlights show:

Hole PLS13-102

  • 0.32% uranium oxide (U3O8) over 12.5 metres, starting at 119.5 metres in downhole depth

  • 0.58% over 9.5 metres, starting at 138 metres
  • (including 1.44% over 1 metre)

  • 0.12% over 9 metres, starting at 154 metres

  • 0.73% over 4 metres, starting at 171.5 metres

Hole PLS13-104

  • 0.13% over 12 metres, starting at 61 metres

  • 4.97% over 13 metres, starting at 99 metres
  • (including 13.2% over 4.5 metres)
  • (which includes 35.9% over 0.5 metres)

  • 0.42% over 6.5 metres, starting at 131 metres
  • (including 2.1% over 1 metre)

  • 0.22% over 17 metres, starting at 146.5 metres

Zone 780E shows a 60-metre strike and approximately 50-metre lateral width. The best assays include:

Hole PLS13-082

  • 1.25% over 41 metres, starting at 141 metres
  • (including 4.94% over 9 metres)

Hole PLS13-089

  • 0.17% over 16 metres, starting at 150 metres

  • 0.18% over 8 metres, starting at 198.5 metres

Hole PLS13-097

  • 0.99% over 48 metres, starting at 119 metres
  • (including 1.94% over 5 metres)
  • (and including 2.05% over 2.5 metres)
  • (and including 6% over 3.5 metres)

  • 0.54% over 6 metres, starting at 228.5 metres
  • (including 1.1% over 1 metre)

Hole PLS13-101

  • 0.5% over 34.5 metres, starting at 103 metres
  • (including 1.89% over 4.5 metres)

  • 0.63% over 11.5 metres, starting at 163 metres
  • (including 2.27% over 1 metre)

  • 1.04% over 17 metres, starting at 179 metres
  • (including 2.44% over 3.5 metres)

True widths were unavailable. Both zones remain open in all directions.

And the project’s potential remains open to speculation, not to mention exploration. On January 13 the company announced a new radon survey to follow up on 10 basement electromagnetic conductors. So far the technique has been used systematically on only one of the property’s over 100 basement EM conductors, Fission Uranium stated. Expected to last five or six weeks, the survey will take some 2,300 samples from three areas within Patterson Lake and a fourth within Forrest Lake, immediately south.

$50-million Uranium Participation financing bolsters commodity price confidence

In what’s been hailed as a testament of faith in uranium prices, Uranium Participation Corp TSX:U announced a $50-million private placement on January 16. “By mid-day the bought deal was complete,” reported Toll Cross Securities analyst Tom Hope.

Uranium Participation describes itself as “an investment alternative for investors interested in holding uranium.” Proceeds of the financing will be used to stockpile further purchases of U3O8 and uranium hexafluoride (UF6). Hope estimates the company will buy up to 1.28 million pounds to hold a total of about 14.7 million pounds “or approximately 9% of our estimated 2014 global mine output.”

A Denison Mines TSX:DML subsidiary manages Uranium Participation.

Declan grabs more ground north of Gibbon’s Creek

North of the company’s Gibbon’s Creek joint venture with Lakeland Resources TSXV:LK, Declan Resources TSXV:LAN has acquired the 11,100-hectare North Star property, the company announced January 17. The property “is believed to contain the northerly extensions of a number of important regional structures associated with uranium projects in the area,” Declan stated. “An interpretation of the magnetic background at Gibbon’s Creek shows a northerly trending structure which continues to the north through Lakeland Resources Ltd’s Star property, and onto the North Star property.”

The deal costs Declan $15,000 and 1.5 million shares, with a 2% gross sales royalty in effect. The previous week Declan and Lakeland reported Gibbon’s Creek boulder samples grading up to 4.28% U3O8, as well as some of the Basin’s highest-ever radon readings.

Read more about Lakeland Resources here and here.

Azincourt closes Peru property acquisitions

Uranium news from Saskatchewan and elsewhere for January 11 to 17, 2014

Along with the more advanced Macusani project, Azincourt’s newly acquired Muñani property positions the company in Peru’s emerging uranium district.

Azincourt Uranium TSXV:AAZ announced January 16 completion of its $2-million cash-and-share deal with Cameco Corp TSX:CCO and Vena Resources TSX:VEM. Coming with the advanced-stage Macusani project and the earlier-stage Muñani property, the buyout of Cameco and Vena’s Minergia S.A.C. places the purchaser prominently in Peru.

Back in Saskatchewan, Azincourt is earning into a 50/50 JV with Fission Uranium on their Patterson Lake North project. In December Azincourt closed two private placements totalling $2.5 million.

As for Vena, the deal “reactivates our investment in the uranium business,” chairman/CEO Juan Vegarra stated. The agreement allows Vena to double its Azincourt holdings within months.

Read more about Azincourt’s Peru acquisitions.

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