Monday 13th July 2020

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Mining resumes under COVID-19 but faces slow return: GlobalData

April 28th, 2020

by Greg Klein | April 28, 2020

Mining resumes under COVID-19 but faces slow return GlobalData

 

As of April 27 some 729 mines worldwide remain suspended, down from more than 1,600 shutdowns on April 3. The numbers, released by GlobalData, reflect government decisions to declare the industry an essential service, as well as implementation of new health standards and procedures. Those efforts, often involving staff reductions, contribute to “a slow return for the industry,” stated the data and analytics firm.

“Silver production is currently being severely damaged by lockdown measures,” pointed out GlobalData mining analyst Vinneth Bajaj. “As of 27 April, the equivalent of 65.8% of annual global silver production was on hold. Silver mining companies such as First Majestic, Hochschild, Hecla Mining and Endeavour Silver have all withdrawn their production guidance for 2020 in the wake of the outbreak.

Mining resumes under COVID-19 but faces slow return GlobalData

“Progress has also been halted on 23 mines under construction, including the US$5.3-billion Quellaveco copper mine in Peru, which is one of the world’s biggest copper mines currently under development…. In Chile, while a lockdown is not in force, Antofagasta has halted work on its Los Pelambres project and Teck Resources has suspended work on the Quebrada Blanca Phase II mine.”

Jurisdictions that have lifted suspensions include Quebec, India, Argentina, Zimbabwe and South Africa, GlobalData added. Countries with government-ordered lockdowns still in force include Bolivia (until April 30), Namibia (May 4), Peru (May 10) and Mexico (May 30).

At least one Mexico operator, Argonaut Gold TSX:AR, plans to re-open on May 18 under an exception for businesses operating in municipalities with few or no cases of COVID-19.

Quebec’s resumption of mining drew strong criticism from Makivik Corporation, which represents the Inuit of the province’s Nunavik region.

“Makivik will not entertain the opening of any mines at this time in Nunavik. This is very dangerous,” said corporation president Charlie Watt on April 17. “The Inuit-elected officials in the communities and in the different regional organizations need to be heard and need to make the decisions and call the shots.”

One day later production resumed at Glencore’s Raglan nickel mine. The company stated that Nunavik authorities have banned travel between the mine and regional villages to protect the local population. Local workers stay home with compensation, while the mine employs workers from the south, including Inuit who live in the south.

Without question this is taking a toll on all of our mines and service/supply companies.—Ken Armstrong, NWT and
Nunavut Chamber of Mines

Six mines still operating in Nunavut and the Northwest Territories use similar staffing precautions. “The mines are operating with reduced workforces which they must fly in by charter from as far away as eastern Canada,” said NWT and Nunavut Chamber of Mines president Ken Armstrong. “To protect vulnerable northern communities from the virus they have sent their local employees home with pay and they are maintaining costly and unplanned virus protection measures.”

Meanwhile Labrador politicians expressed concern about renewed operations at Champion Iron’s (TSX:CIA) Bloom Lake mine on the Quebec side of the Labrador Trough. On April 28 VOCM radio reported that MP Yvonne Jones asked the company to avoid the Wabush airport in her riding and transport employees entirely through Quebec. Member of the House of Assembly Jordan Brown said contractors were making unnecessary trips to the Newfoundland and Labrador side.

Another pandemic-caused Quebec mining suspension will stay on care and maintenance due to market forces. Renard owner Stornoway Diamond stated, “Despite positive signs in the diamond market in early 2020, the recent COVID-19 pandemic has resulted in the entire marketing chain and diamond price collapse.”

Prior to the suspension, Renard operated only through creditor support.

Another diamond casualty has been the Northwest Territory’s Ekati mine, which suspended operations last month. Majority owner Dominion Diamond Mines received insolvency protection on April 22.

Discovered in 1991 and opened in 1998, Ekati “provided nearly 33,000 person-years of employment, and $9.3 billion in business spending, with over half the benefits (51% of jobs and 69% of spending) going to northern residents and businesses,” the Chamber stated. “Billions of dollars in various taxes and royalties have also been paid to public and indigenous governments by the mine.”

Work suspended

March 26th, 2020

Some Canadian mining and exploration dispatches during the pandemic

by Greg Klein | March 26, 2020

Shut Down Canada has largely been achieved, but not by the forces that advocated it nor—until someone finds a way of blaming this on climate change—by the doomsday belief they were pushing. Residents of our strangely quiet cities and towns watch the horror unfold elsewhere while wondering how long and hard the pandemic will hit Canada. Meanwhile, workers and business owners might consider themselves lucky if the economy fares no worse than a very serious recession.

Some Canadian mining and exploration dispatches during the pandemic

A reminder that one crisis can trigger another unwittingly came from FortisAlberta on March 23. The company that provides 60% of the province’s electricity “is taking the necessary actions and precautions to protect the health and well-being of its employees and to provide electricity service to its customers.”

The obvious but demoralizing question arises: What happens if too many key people get sick? That danger could apply to any number of essential services. Economic collapse, social disorder, a breakdown of supply chains add to the nightmarish possibilities.

All of which might not happen. In the meantime we can thank the front line workers who keep our society functioning to the extent that it does. Those one- or two-buck-an-hour temporary pay raises hardly acknowledge society’s debt to retail staff who interact constantly with a potentially plague-ridden public. Care workers for the elderly constitute another group of low-paid heroes, several of whom have already made the ultimate sacrifice.

In the meantime here are some reports on Canadian mining’s response to the crisis.

Inconsistent closures suggest an ambivalent industry

Some Canadian mining and exploration dispatches during the pandemic

IAMGOLD sidelined its Westwood operation in Quebec but
continues work on its Coté project in Ontario. (Photo: IAMGOLD)

Mining hasn’t actually been banned in Ontario and Quebec, although shutdowns of non-essential services continue to April 8 and April 13 respectively. Extensions, of course, look likely. Quebec has ordered the industry, along with aluminum smelting, to “minimize their activities.” Ontario specifically exempted mineral exploration, development, mining and their support services from mandatory closures.

Interpreting Quebec’s decree as a ban, IAMGOLD TSX:IMG suspended its Westwood gold mine in that province but continued work at its 64.75%-held, advanced-stage Coté gold project in Ontario as an “essential service.” Production continues at the company’s Burkina Faso and Suriname operations.

But regardless of government bans or directives, voluntary suspensions take place. Restrictions on travel and social distancing have made projects non-viable, while the threat of localized outbreaks looms large—not just at the job sites and accommodations, but in the isolated communities that supply much of the labour.

In Canada, that often means native communities. “They have a bad history with disproportionate impacts from epidemics,” a Vale Canada spokesperson told the Financial Post. The company put its Voisey’s Bay mine in Labrador on care and maintenance, and planned reductions at its associated Long Harbour nickel-copper-cobalt processing plant in Newfoundland.

So far alone of the Northwest Territories’ three operations, Dominion Diamond Mines announced an indefinite suspension for Ekati on March 19. The Union of Northern Workers stated its intention to grieve the manner in which its members were laid off.

Some Canadian mining and exploration dispatches during the pandemic

Having laid off its native staff, Agnico Eagle continues its Nunavut
operations largely with workers from Quebec. (Photo: Agnico Eagle)

Agnico Eagle Mines TSX:AEM made the ramp-down decision a day after Quebec’s March 23 order, after discussions with government “to get additional clarity.” The suspensions applied to three Quebec mines but the company planned “reduced operations” at Meliadine and Meadowbank in Nunavut, largely under Quebecois workers.

Five days earlier Agnico Eagle began sending home Nunavummiut staff from its Nunavut mines and exploration projects to prevent virus transmission “from a southern worker to a Nunavut worker, with the risk of it moving into the communities,” explained CEO Sean Boyd. Production was expected to continue under the remaining staff.

The following day residents blocked a road from Rankin Inlet airport to Meliadine to protest the use of replacement workers from Mirabel and Val d’Or, Quebec. Although the territory has banned travel from other jurisdictions, critical workers may apply for an exemption. They’re also required to undergo two weeks of isolation in their own region prior to travel.

From boots on the ground to fingers on the keyboard

Exploration suspensions haven’t come at a bad time for some projects, which had completed or nearly completed winter programs. Where labs remain open, assays might provide some badly needed good news.

Much of the crucial work of analyzing results and planning future exploration can be done by desktop. One example of a company with a multinational work-at-home team is Turmalina Metals TSXV:TBX, which completed a seasonal field program at its San Francisco de Los Andes gold project shortly before Argentina imposed a nation-wide quarantine. “While Turmalina maintains a corporate office in Canada our technical and managerial team operate remotely from individual home offices located in Peru, Brazil, Argentina, Canada and Asia,” states a March 23 announcement. “The current compilation, analysis and modeling of recently collected data is being done on a physically decentralized basis from these individual home offices as the company prepares for drilling.”

Follow the money

No one’s saying so out loud, but travel restrictions just might divert money from conferences, trade shows and expense accounts to actual work. Then again, money can still be squandered on low-IQ promotional campaigns produced at the kitchen table.

Every metal and mineral has a silver lining

This isn’t a sector that overlooks opportunity. Two days after Vanstar Mining Resources TSXV:VSR reported that drilling “continues without stopping” at its 25%-held Nelligan project in Quebec, the company acknowledged that majority partner IAMGOLD had suspended work. But “it should be noted that current events can also bring certain opportunities for acquiring gold projects at a lower cost,” Vanstar pointed out. The junior was merely echoing comments made by others, including BHP Group NYSE:BHP earlier this month.

With the economic outlook as confused as a professional stock-picker’s thought processes, mining’s future remains profoundly uncertain. But diminished supply can certainly help chances of rebounding demand.

And suspensions might encourage advantageous awareness, as noted by Uranium Energy Corp NYSE:UEC president/CEO Amir Adnani. “The recent global events and supply disruptions further underscore the importance of domestic supply chains for vital resources,” stated the U.S. purveyor of U3O8.

How could we live without them?

Endeavours deemed essential by Ontario and Quebec include capital markets services and agencies like the TMX Group and securities commissions. The provinces also consider alcohol and cannabis retailers essential. As if the world wasn’t already facing worse consequences, Toronto medical officer Eileen de Villa said banning booze “would lead to pretty significant health consequences.”

She didn’t specifically mention geoscientists.

The experts speak

Some fatuous remarks at PDAC provided retrospectively grim humour, as well as an exhibition of prognosticator pomposity. Here’s Mickey Fulp’s take on COVID-19, as quoted by IKN:

  • “I think it’s overblown.”

  • “All these shows are flu incubators, anyway.”

  • “I think it (i.e. infections) are going to be less this year, because people are doing things like washing their hands.”

  • “This is a blip on the radar screen. Especially in the U.S. where I’m from, because our economy is absolutely roaring and virus fears are not going to do major damage to the U.S. market.”

  • “I think it absolutely is an overreaction and the quicker it’s realized, the better.”

  • “This is a variety of flu.”

Of course to sheltered North Americans, the first week of March might seem a long time ago. So here’s Doug Casey’s insight, as published by Kitco on March 24:

“The virus itself isn’t nearly as serious, I don’t know how serious it’s going to be, but not terribly in my opinion. What I’m really shocked at, Daniela, is the degree of hysteria on the part of the powers that be. They’ve actually just gone insane.”

Click here for objective data on the coronavirus pandemic.

Policy or geology?

February 28th, 2020

What’s behind Canada’s plunging reputation among miners?

by Greg Klein | February 28, 2020

If you think that’s bad news, be glad the poll ended when it did. The Fraser Institute Survey of Mining Companies 2019 imposed a November 8 deadline on respondents. Shut Down Canada didn’t really gain momentum until a bit later.

Even so, for the first time in a decade no Canadian jurisdiction made the top 10 for the survey’s main list, the Investment Attractiveness Index (IAI). Media coverage played up the role of provincial and territorial governments in jeopardizing what was—until recently and at least by Canadians—generally considered the world’s pre-eminent mining country. In doing so, reporters followed the institute’s commentary which, in keeping with its advocacy purpose, emphasized politicians’ ability to help or hinder the industry. But a closer look suggests miners and explorers gave other concerns higher priority.

What’s behind Canada’s plunging reputation among miners?

(Image: Fraser Institute)

The survey bases the IAI on two other indices, Policy Perception and Mineral Potential. The first is determined by company responses to government actions or in-actions affecting the industry. The second (assuming an un-interfering nirvana of “best practices” by those governments) considers companies’ appraisals of geology. The survey provides separate ratings for policy and geology, but also weighs them 40% and 60% respectively to compile the IAI. The 40/60 split reflects institute intel about how companies make investment decisions.

Despite Canada’s disappearance from the IAI top 10, three provinces rated highly for Policy Perception. Alberta, Newfoundland and Saskatchewan rated sixth, eighth and ninth in the world respectively. Five Canadian jurisdictions showed Policy Perception improvements over the previous year. Moreover, the most dramatic declines from 2018 appeared in the Mineral Potential index.

“We know there’s not a lot that policy-makers can do about the geology in particular areas,” says Fraser Institute senior policy analyst Ashley Stedman. “But when we see declines on the policy index, that’s something policy-makers should be paying attention to.

“In particular we saw significant declines in Saskatchewan, which dropped from third the previous year to 11th, and that was largely the result of concerns about policy factors including taxation, regulatory duplication and inconsistencies, and trade barriers. And in Quebec we saw a decline from fourth to 18th, with uncertainties about environmental regulations and about the administration or enforcement of existing regulations. We can see from both these jurisdictions and a number of other Canadian jurisdictions that regulatory issues are escalating and this should be a serious concern for policy-makers.”

What’s behind Canada’s plunging reputation among miners?

But while Saskatchewan’s Policy Perception rating fell from first place to ninth, the province’s Mineral Potential rank fell farther, from seventh to 21st. Quebec dropped from 10th to 21st in Policy Perception but plummeted from sixth to 25th in Mineral Potential.

Other dramatic Mineral Potential declines included Manitoba (from 11th to 26th), New Brunswick (49th to 72nd), Newfoundland (18th to 50th), the NWT (fourth to 29th), Nunavut (fifth to 16th) and Yukon (10th to 22nd).

Four provinces—Alberta, B.C., Nova Scotia and Ontario—did show improvements. Still, the question remains: What the hell happened to Canadian geology?

Some causes might be resource depletion, recalcitrant commodity prices or (talk to enough CEOs and this seems very possible indeed) confusion about how to answer survey questions.

Stedman suggests another likelihood. Discoveries in some jurisdictions might dampen enthusiasm for others. “We do have to keep in mind that this is a relative ranking, so if other places are seen as more attractive, that can have an impact on other jurisdictions as well.”

Although policy factors affect just 40% of a jurisdiction’s IAI ranking, “our write-up focuses on the policy rankings as an area that policy-makers can pay attention to,” Stedman explains. In some cases governments do respond to the survey’s findings. “Reporters will often ask policy-makers to comment on the rankings.”

As for other countries, “we do get quite a bit of interest globally for this survey and we’ve seen a lot of countries and jurisdictions ask us questions about the rankings. There’s quite a lot of interest in this publication in particular.”

Confidentiality, however, prevents her from divulging how many respondents are based in Canada.

The survey provides “a policy report card for governments on areas that require improvement and areas where certain jurisdictions are performing well,” she adds.

In general we see that investment dollars will flow to jurisdictions with attractive polices, and governments need to focus on adopting competitive policies to attract valuable investment dollars that will ultimately create jobs.—Ashley Stedman,
senior policy analyst
for the Fraser Institute

With geology beyond the reach of government power, policy improvement would be Canada’s only means of re-entering the IAI’s global top 10. “In general we see that investment dollars will flow to jurisdictions with attractive polices, and governments need to focus on adopting competitive policies to attract valuable investment dollars that will ultimately create jobs.”

Whether the pre-PDAC week timing will cast a pall on the Canadian industry’s biggest annual bash remains to be seen. COVID-19 has cast a bigger pall on travel while, at time of writing, there seems nothing to stop Shut Down Canada from turning its attention to airports, hotels and convention centres.

The following charts show the global IAI top 10, Canada’s IAI top 10, Canada’s top 10 for Policy Perception and Mineral Potential, and—consoling for its lack of Canadian content—the global bottom 10.

With fewer responses this time, the 2019 survey covers 76 jurisdictions compared with 83 the previous year. Here are the global IAI rankings for 2019, with 2018 spots in parentheses.

  • 1 Western Australia (5)

  • 2 Finland (17)

  • 3 Nevada (1)

  • 4 Alaska (5)

  • 5 Portugal (46)

  • 6 South Australia (8)

  • 7 Irish Republic (19)

  • 8 Idaho (16)

  • 9 Arizona (8)

  • 10 Sweden (21)

All Canadian jurisdictions except Ontario, Alberta and Nova Scotia fell in the IAI. Here’s the list for Canada, with global numbers provided for 2019 and 2018:

  • 11 Saskatchewan (3)

  • 16 Ontario (20)

  • 18 Quebec (4)

  • 19 British Columbia (18)

  • 23 Yukon (9)

  • 26 Nunavut (15)

  • 28 Newfoundland and Labrador (11)

  • 30 Alberta (51)

  • 34 Manitoba (12)

  • 35 Northwest Territories (10)

  • 52 Nova Scotia (57)

  • 60 New Brunswick (30)

Here’s Canada’s Policy Perception ratings. Alberta, Newfoundland, Ontario, B.C. and Nunavut improved their standings.

  • 6 Alberta (14)

  • 8 Newfoundland and Labrador (18)

  • 9 Saskatchewan (11)

  • 13 New Brunswick (9)

  • 18 Nova Scotia (11)

  • 21 Quebec (10)

  • 24 Ontario (30)

  • 32 Yukon (24)

  • 36 British Columbia (44)

  • 44 Nunavut (45)

  • 50 Northwest Territories (42)

  • 53 Manitoba (33)

Mineral Potential showed Canada’s most dramatic downfalls, although Alberta, B.C., Nova Scotia and Ontario managed to move upwards.

  • 10 British Columbia (13)

  • 16 Nunavut (5)

  • 18 Ontario (20)

  • 21 Saskatchewan (7)

  • 22 Yukon (10)

  • 25 Quebec (6)

  • 26 Manitoba (11)

  • 29 Northwest Territories (4)

  • 50 Newfoundland and Labrador (18)

  • 54 Alberta (74)

  • 61 Nova Scotia (79)

  • 72 New Brunswick (49)

And finally the global IAI bottom 10:

  • 67 Nicaragua (81)

  • 68 Mali (50)

  • 69 Democratic Republic of Congo (67)

  • 70 Venezuela (83)

  • 71 Zambia (45)

  • 72 Dominican Republic (76)

  • 73 Guatemala (80)

  • 74 La Rioja province, Argentina (75)

  • 75 Chubut province, Argentina (69)

  • 76 Tanzania (66)

Download the Fraser Institute Survey of Mining Companies 2019.

Read about last year’s survey.

Open and shut cases: East

January 7th, 2020

Some 2019-2020 ups and downs for mining in Quebec and Atlantic Canada

by Greg Klein

Some 2019-2020 ups and downs for mining in Quebec and Atlantic Canada

Eldorado workers celebrate another endowment from Lamaque’s legacy.
(Photo: Eldorado Gold)

 

This is the final installment of a series on mine openings and closures across Canada for 2019 and 2020.

Quebec

Val-d’Or flaunted its abundance yet again as Eldorado Gold TSX:ELD reached commercial production at Lamaque in March. Pre-commercial mining and toll milling began the previous year, with the first gold pour from the project’s refurbished Sigma mill in December 2018. Guidance for 2019 was set at 100,000 to 110,000 ounces, with 125,000 to 135,000 initially expected for each of 2020 and 2021.

At least, that was the original plan. In September 2019 the company began a PEA to study an annual increase to 170,000 ounces. By November Eldorado announced an additional 19,000 ounces for Lamaque’s proven and probable reserves, along with 191,000 ounces for measured and indicated resources.

Some 2019-2020 ups and downs for mining in Quebec and Atlantic Canada

A drill operator probes the Triangle deposit at Lamaque.
(Photo: Eldorado Gold)

That gives the deposit reserves of 972,000 ounces within a measured and indicated 1.55 million ounces.

But until further feasibility states otherwise, Lamaque’s life expectancy ends in seven years.

Eldorado picked up the property with its 2017 buyout of Integra Gold. The Triangle deposit now under production wasn’t part of the historic Lamaque mines, one of which was Quebec’s biggest gold producer between 1952 and 1985. In 2016 Integra’s Gold Rush Challenge offered geo-boffins a half-million-dollar prize to apply cutting edge technology in search of additional auriferous riches on historic turf adjacent to the current operation.

 

Attributing its setbacks more to cost overruns than an overinflated bubble, Nemaska Lithium TSX:NMX ended 2019 by suspending mine construction and demo plant operations, laying off 64 staff, getting creditor protection and halting trades. Hanging in the balance is a possible $600-million investment that’s been under negotiation since July.

Just over a year ago Nemaska confidently spoke of steady construction progress, with concentrate production expected in H2 2019 and lithium salts production in H2 2020. But by February 2019 the company warned of a $375-million capex shortfall revealed by “detailed engineering work, revised site geo-technical data and updated equipment and installation costs” not foreseen in the previous year’s feasibility update.

That same month Livent Corp (previously FMC Corp) cancelled an 8,000-tpa lithium carbonate supply agreement that was to start in April 2019.

Some 2019-2020 ups and downs for mining in Quebec and Atlantic Canada

Until funders come to the rescue, Nemaska’s
Whabouchi camp will resemble an instant ghost town.
(Photo: Nemaska Lithium)

By September a US$75-million second tranche of a US$150-million stream agreement with Orion Mutual Funds fell into jeopardy. Bondholders called for repayment of US$350 million. The company had so far spent only $392 million towards a capex estimated at $1.269 billion.

Plan A calls for sealing a $600-million deal with the London-based Pallinghurst Group, which over the last 12 years has invested about US$2 billion in mining projects. But negotiation delays caused Nemaska to seek creditor protection, which was granted in December. Bracing for a possible fallout with Pallinghurst, Nemaska says it’s also considering other investment, debt or M&A alternatives.

Before suspending the Phase I plant at Shawinigan, however, the company did finish delivering samples to potential customers “ranging from cathode manufacturers to battery makers to industrial grease users, in addition to our existing offtake customers, which include LG Chemicals, Johnson Matthey and Northvolt” using proprietary methodology.

The mine plan calls for 24 years of open pit operation prior to nine years of underground mining, producing an annual 205,000 tonnes of 6.25% Li2O spodumene concentrate. On achieving commercial production, the Shawinigan plant’s annual capacity would reach 37,000 tonnes lithium hydroxide monohydrate.

Should funding allow, Nemaska would target Q3 2021 to begin spodumene concentrate production at Whabouchi and Q2 2022 to start producing lithium salts at Shawinigan.

The provincial government’s investment agency Ressources Québec holds about 12.5% of Nemaska.

 

Some 2019-2020 ups and downs for mining in Quebec and Atlantic Canada

Although Nyrstar has moved mining equipment
out of Langlois, the company says exploration
potential remains. (Photo: Nyrstar)

Another James Bay-region operation, the Langlois zinc-copper mine went back on care and maintenance in December. A short-lived operation between July 2007 and November 2008, Langlois was taken over by Zurich-headquartered Nyrstar in 2011. Mining resumed the following year. But by October 2018 the suspension was decided “due to rock conditions having deteriorated,” making the mine uneconomic. Some 240 staff lost their jobs.

But Langlois “has exploration potential for other metals such as gold,” Nyrstar stated. “The company is in active discussions with interested parties in the mine and its assets.”

Usable equipment was slated for transfer to other Nyrstar properties in Tennessee and on Vancouver Island, where the company’s Myra Falls zinc-copper-polymetallic mine suspended operations briefly in early 2019.

As part of a debt restructuring, in July Nyrstar came under majority ownership of the Trafigura Group, one of the world’s largest physical commodities traders.

 

Fear of closure came to another Quebec mine in September after Stornoway Diamond followed its application for creditor protection with this ominous declaration: “There is and will be no recoverable or residual value in either Stornoway’s common shares or convertible debentures.”

Such an admission made the company’s October delisting something of a formality. But if investors got wiped out, the Renard mine continues operations due to creditors led by Osisko Gold Royalties TSX:OR and including Ressources Québec. As of November 1, Osisko became the largest shareholder, with a 35.1% stake. The royalty company also holds a 9.6% stream.

Some 2019-2020 ups and downs for mining in Quebec and Atlantic Canada

Despite Stornoway’s failure, creditors keep Quebec’s only
diamond mine in operation. (Photo: Stornoway Diamond)

Under a September LOI, the lenders agreed to take over all of Stornoway’s assets and liabilities. An initial $20-million financing should ensure Renard operations continue “in an uninterrupted manner.”

Open pit mining began in 2015, with an official opening following in 2016 and commercial production in 2017. But Renard encountered technical problems while shifting to underground operations and also faced a disappointing initial underground grade as well as the global slump in diamond markets.

Nevertheless, Osisko suggested the mine remained on target to meet the 2019 guidance set by Stornoway of 1.8 million to 2.1 million carats, with sales expectations of $80 to $105 per carat. A 2016 resource update expected prices ranging from $106 per carat for the Renard 4 pipe to $197 for Renard 2. The technical study assumed a 2.5% annual increase in diamond prices to the end of 2026.

New Brunswick

A casualty of an earlier mine closure, Glencore’s Brunswick lead-silver smelter shut down permanently by the end of 2019. “Despite years of efforts by committed employees and a strong management team, the smelter has been uneconomic since the closure of the Brunswick mine in 2013,” said company spokesperson Chris Eskdale. “We have thoroughly assessed all our options and come to the unavoidable conclusion that the smelter is simply not sustainable, regardless of the recent labour dispute.”

Termed a lockout by the United Steelworkers and a strike by management, the dispute had left 280 union members of the 420-person workforce off the job since April. The company’s November announcement of the impending shutdown also coincided with a strike at the CEZinc refinery near Montreal, which ended December 3 after 10 months. That facility is owned by Noranda Income Fund TSX:NIF.UN but operated by Glencore, which holds 25% of NIF.

Glencore’s Alexis Segal emphasized that Brunswick plant losses averaged $30 million annually for the last three years, CBC reported. Premier Blaine Higgs and labour minister Trevor Holder expressed concern but couldn’t offer reassurances, the network added.

The facility opened in 1966 to process concentrate from the Brunswick zinc-lead-silver mine, at one point the world’s largest underground zinc operation. Following the mine’s 2013 closure, the company was transforming the smelter into a custom plant.

Labrador

Some 2019-2020 ups and downs for mining in Quebec and Atlantic Canada

Blasting began last June as Tacora brought new life
to the Scully iron ore operation. (Photo: Tacora Resources)

Western Labrador’s iron industry revived in May as production resumed at the Scully mine after nearly five years. Minnesota-based Tacora Resources bought the former Wabush Iron operation through a Companies’ Creditors Arrangement Act process in 2017, conducted a new feasibility study and recruited strategic investors that include the metals branch of Cargill, which also agreed to 100% offtake for 15 years.

The restart benefits Quebec too. The Iron Ore Company of Canada’s railway, the Quebec North Shore & Labrador line, carries Scully production to a pellet plant at Pointe Noire on the St. Lawrence. Nearby Sept-Isles provides deep sea docks from where the resuscitated mine’s first shipment left for Europe in late August.

With life expectancy currently set at 15 years, the company expects the open pit to produce 6.25 million tpa. Tacora hopes to upgrade the 65.9% Fe concentrate and also pull profits from the deposit’s manganese, considered problematic by the previous operator.

“The manganese content was a hurdle and an impediment before,” Tacora CEO/chairperson Larry Lehtinen told CBC. “We’re turning that into an advantage.”

The mine previously opened in 1965. The operation shut down completely in 2015 but most staff had already lost their jobs the previous year.

This is Part 4 of a series.

PDAC infographics: Highlighting mining’s contributions to Canada’s economy

October 28th, 2019

by Greg Klein | October 28, 2019

Although Canadian miners hold global stature, Canadians don’t always recognize the industry’s importance to our own country. Yet the numbers tell a story that’s not only impressive but vital to understanding an economy in which mining supports one in 29 jobs and provides the largest private sector source of native employment.

To state the case clearly, the Prospectors & Developers Association of Canada created a series of infographics outlining the industry’s contributions. Check them out yourself by scrolling down to see facts and figures for Canada overall and for each province or territory. Or click on the menu below for a direct link to each jurisdiction.

Canada nationwide | Yukon | Northwest Territories/Nunavut | British Columbia | Alberta | Saskatchewan | Manitoba | Ontario | Quebec | New Brunswick/Nova Scotia | Newfoundland and Labrador/Prince Edward Island

Posted with permission of the Prospectors & Developers Association of Canada.

 

PDAC infographics Highlighting mining’s contributions to Canada’s economy

 

PDAC Yukon mining infographic

 

PDAC NWT Nunavut mining infographic

 

PDAC BC mining infographic

 

PDAC Alberta mining infographic

 

PDAC Saskatchewan mining infographic

 

PDAC Manitoba mining infographic

 

PDAC Ontario mining infographic

 

PDAC Quebec mining infographic

 

PDAC Nova Scotia New Brunswick mining infographic

 

PDAC Newfoundland Labrador PEI mining infographic

Posted with permission of the Prospectors & Developers Association of Canada.

Site visits for sightseers IV

July 31st, 2019

Atlantic Canada’s mining heritage can captivate visitors

by Greg Klein

Atlantic Canada’s mining heritage captivates visitors

Among the Bell Island operations that produced about 81 million tonnes of
iron ore by 1966, this Newfoundland mine gives visitors a glimpse of the past.
(Photo: Bell Island #2 Mine and Community Museum)

 

Our survey of historic mining sites and museums wraps up with a trip through Nova Scotia, Newfoundland and Labrador. With places known for precious and base metals as well as mineralogical exotica like salt, fluorspar and asbestos, these Atlantic provinces once hosted a globally important coal and steel industry—important enough to merit military attacks during World War II. Even where mining’s a practice of the past, many people continue to recognize the industry’s influence on their communities.

As usual with these visits, check ahead for footwear and other clothing requirements, for additional info like kids’ age restrictions, and to confirm opening times.

Three previous installments looked at Yukon and British Columbia, the prairie provinces, and Ontario and Quebec.

 

Nova Scotia

 

In a region where the industry goes back nearly 300 years, the Cape Breton Miners Museum tells the stories of coal diggers, their work, lives and community. The scenic six-hectare coastal site also includes a few restored buildings from the company village and the Ocean Deeps Colliery, where retired miners lead underground/undersea tours to offer first-hand accounts of a miner’s life. The museum also presents occasional concerts by the Men of the Deeps, made up entirely of people who’ve worked in or around coal mines: “We’re the only choir where the second requirement is that you have to be able to sing.”

Located on Birkley Street north from Route #28, about 1.5 kilometres southeast of downtown Glace Bay. Open daily 10:00 to 6:00 until October 20, with daily tours. Phone 902-849-4522 for off-season hours and tours.

 

Atlantic Canada’s mining heritage captivates visitors

Coal production in the Sydney Mines area dates as far back as 1724.
(Photo: Sydney Mines Heritage Museum)

Farther west along the serrated coast, the Sydney Mines Heritage Museum looks at not only coal extraction but also the time when this town was a major steelmaking centre. Originally a 1905 railway station, the building also houses a transportation exhibit, the Cape Breton Fossil Discovery Centre and a sports museum.

Located at 159 Legatto Street, just north of Main Street (Route #305), Sydney Mines. Open Tuesday to Saturday 9:00 to 5:00 until September 7. Phone 902-544-0992 for Sydney Coalfield fossil field trips held on Thursdays and Saturdays to August 24, weather and tides permitting.

 

About 76 kilometres east of Amherst was Canada’s first industrial source of an edible mineral, now commemorated by the Malagash Salt Mine Museum. This small building features the mine’s off-and-on operations between 1918 and 1959, and the local miners, farmers, fishermen and lumberjacks who worked the deposit until it was replaced by another salt source at nearby Pugwash.

Located at 1926 North Shore Road, east of Route #6, Malagash. Open Tuesday to Saturday 10:00 to 5:00, Sunday noon to 5:00 until September 15. Call 902-257-2407 for more info.

 

In the Annapolis Valley about 95 kilometres southeast of Moncton, the Springhill Miners’ Museum portrays the historically dangerous work that prevailed in these coal mines between the late 1800s and the 1950s. Guides lead underground tours of about an hour’s duration.

Located at 145 Black River Road, about 1.5 kilometres south of Springhill, just east of Route #2. Open daily 9:00 to 5:00, with tours available hourly from 9:00 to 4:00 until October 15. Call 902-597-3449 for more info.

 

Newfoundland and Labrador

Atlantic Canada’s mining heritage captivates visitors

Kids tour a mine that once employed boys as young as 10.
(Photo: Bell Island #2 Mine and Community Museum)

Complementing coal from Cape Breton was iron ore from Bell Island in Conception Bay, where six mines operated at various times between 1895 and 1966. The Bell Island #2 Mine and Community Museum hosts exhibits and offers one-hour tours through an underground operation that closed in 1949. Another feature relates the 1942 U-boat attacks at Belle Island that sunk four ore-carrying ships and killed over 60 men, leading to Allied fears that Germany would occupy St. John’s.

Located at 13 Compressor Hill, Bell Island. Open daily 10:00 to 6:00 until September 30. Call 709-488-2880 or toll-free 1-888-338-2880 for more info.

 

A number of mines produced fluorspar between 1933 and 1978 on the Rock’s southern-most peninsula, where Canada Fluorspar hopes to revive the industry. The St. Lawrence Miner’s Memorial Museum recounts workers’ lives, including the danger they faced before the presence of radon gas was recognized. Emphasizing the sacrifice, the neighbouring graveyard can be seen from museum windows. On a more pleasant note, new uses for the colourful mineral can be found in the gift shop’s fluorspar jewelry.

Located on Route #220, east of Memorial Drive, St. Lawrence. Open daily 8:30 to 4:30 until September 1. Call 709-873-3160 for more info.

 

The Baie Verte Miners’ Museum stands above one of six major mines locally, the former Terra Nova copper producer that dates back to the mid-1800s in a north-coastal region that also provided gold, silver and asbestos. On display are mining and mineralogy exhibits and a mining locomotive, along with aboriginal artifacts. Museum tours are available.

Located at 319 Route 410, Baie Verte. Open Monday 10:00 to 4:00, Tuesday to Sunday 9:00 to 6:00 until mid-September. Call 709-532-8090 for more info.

 

The Iron Ore Company of Canada no longer provides tours of its Labrador City facilities but the Gateway Labrador tourism centre offers an alternative—an 18-minute virtual reality experience of IOC’s operations, from mining to processing to delivery at Sept-Îles. Gateway’s museum hosts additional mining exhibits as well as presentations on other industries “to debunk the popular misconception that Labrador West’s history is comprised only of mining.”

Located at 1365 Route #500, Labrador City. Open Monday to Friday 9:00 to 8:00, and Saturday and Sunday 9:00 to 5:00 until mid- or late August. Off-season hours Monday to Friday 9:00 to 5:00. Call 709-944-5399 for more info.

 

See Part 1 about Yukon and British Columbia, Part 2 about the prairie provinces, and Part 3 about Ontario and Quebec.

Miners and explorers pick their spots in Fraser Institute’s latest report card

February 28th, 2019

by Greg Klein | February 28, 2019

Ontario dropped dramatically but an improved performance by the Northwest Territories and Nunavut helped Canada retain its status as the planet’s most mining-friendly country. That’s the verdict of the Fraser Institute’s Annual Survey of Mining Companies 2018, a study of jurisdictions worldwide. Some 291 mining and exploration people responded to questions on a number of issues, supplying enough info to rank 83 countries, provinces and states.

Canadian and American jurisdictions dominated the most important section, with four spots each on the Investment Attractiveness Index’s top 10. Combined ratings for all Canadian jurisdictions held this country’s place as the miners’ favourite overall.

The IAI rates both geology and government policies. Respondents typically say they base about 40% of their investment decisions on policy factors and about 60% on geology. Here’s the IAI top 10 with the previous year’s numbers in parentheses:

  • 1 Nevada (3)

  • 2 Western Australia (5)

  • 3 Saskatchewan (2)

  • 4 Quebec (6)

  • 5 Alaska (10)

  • 6 Chile (8)

  • 7 Utah (15)

  • 8 Arizona (9)

  • 9 Yukon (13)

  • 10 Northwest Territories (21)

Here are Canada’s IAI rankings:

  • 3 Saskatchewan (2)

  • 4 Quebec (6)

  • 9 Yukon (13)

  • 10 Northwest Territories (21)

  • 11 Newfoundland and Labrador (11)

  • 12 Manitoba (18)

  • 15 Nunavut (26)

  • 18 British Columbia (20)

  • 20 Ontario (7)

  • 30 New Brunswick (30)

  • 51 Alberta (49)

  • 57 Nova Scotia (56)

Despite Ontario’s fall from grace, the province’s policy ratings changed little from last year. Relative to other jurisdictions, however, the province plummeted. Concerns include disputed land claims, as well as uncertainty about protected areas and environmental regulations.

The Policy Perception Index ignored geology to focus on how government treats miners and explorers. Saskatchewan ranked first worldwide, as seen in these Canadian standings:

The evidence is clear—mineral deposits alone are not enough to attract precious commodity investment dollars. A sound regulatory regime coupled with competitive fiscal policies is key to making a jurisdiction attractive in the eyes of mining investors.—Ashley Stedman,
senior policy analyst,
the Fraser Institute

  • 1 Saskatchewan (3)

  • 9 New Brunswick (13)

  • 10 Quebec (9)

  • 11 Nova Scotia (24)

  • 14 Alberta (16)

  • 18 Newfoundland (10)

  • 24 Yukon (22)

  • 30 Ontario (20)

  • 33 Manitoba (27)

  • 42 NWT (42)

  • 44 B.C. (36)

  • 45 Nunavut (44)

The NWT and Nunavut’s indifferent PPI performance suggests greater appreciation of the territories’ geology boosted their IAI rank.

This year’s study included a chapter on exploration permitting, previously the subject of a separate Fraser Institute study. Twenty-two jurisdictions in Canada, the U.S., Australia and Scandinavia were evaluated for time, transparency and certainty. Cumulatively, the six American states did best, with 72% of explorers saying they got permits within six months, compared with 69% for the eight Canadian provinces, 53% for the two Scandinavian countries (Finland and Sweden) and 34% for the six Australian states.

A majority of respondents working in Canada (56%) said permitting waits had grown over the last decade, compared with 52% in Australia, 45% in Scandinavia and 28% in the U.S.

A lack of permitting transparency was cited as an investment deterrent by 48% of respondents working in Australia, 44% in Canada, 33% in Scandinavia and 24% in the U.S.

Eighty-eight percent of explorers working in the U.S. and Scandinavia expressed confidence that they’d eventually get permits, followed by 77% for Australia and 73% for Canada.

Saskatchewan led Canada for timeline certainty, transparency and, with Quebec, confidence that permits would eventually come through.

As for the IAI’s 10 worst, they include Bolivia, despite some recent efforts to encourage development; China, the only east Asian country in the study; and problem-plagued Venezuela.

  • 74 Bolivia (86)

  • 75 La Rioja province, Argentina (80)

  • 76 Dominican Republic (72)

  • 77 Ethiopia (81)

  • 78 China (83)

  • 79 Panama (77)

  • 80 Guatemala (91)

  • 81 Nicaragua (82)

  • 82 Neuquen province, Argentina (57)

  • 83 Venezuela (85)

Explorers made up nearly 52% of survey respondents, producers just over 25%, consulting companies over 16% and others nearly 8%.

“The evidence is clear—mineral deposits alone are not enough to attract precious commodity investment dollars,” said Ashley Stedman, who co-wrote the study with Kenneth P. Green. “A sound regulatory regime coupled with competitive fiscal policies is key to making a jurisdiction attractive in the eyes of mining investors.”

Download the Fraser Institute Annual Survey of Mining Companies 2018.

Battlefield correspondent

January 24th, 2019

Rex Murphy sees human casualties in the war on Canada’s resource industries

by Greg Klein

Rex Murphy sees human casualties in the war on Canada’s resource industries

An SRO audience paid rapt attention to Rex Murphy’s VRIC speech.

 

There’s something inspiring about a Newfoundlander—a Newfoundlander born in Newfoundland before it even joined Canada—coming to the West Coast largely to defend Alberta’s oil and gas sector. Actually Rex Murphy’s message applies to Canada’s resource industries overall, focusing on the people who work in them, their families and others who helped build the country. He sees the chasm between those who find fulfillment in employment and those who would shut down the industries that provide it.

Rex Murphy sees human casualties in the war on Canada’s resource industries

A National Post columnist who’s somehow tolerated by the CBC, Murphy proved a huge hit with an overflow crowd at the Vancouver Resource Investment Conference 2019. “As a journalist, I’m in a room full of achievers,” he quipped. “This is a very awkward spot.” But unlike most journalists, he neither ignores nor celebrates an enormous shift in Canadian society.

He remembers miners from Baie Verte and Buchans who frequented his mother’s restaurant in the 1950s, “the gentlest of men” despite their gruelling work. But important as mining was, Newfoundland’s main source of survival was fishing. That changed dramatically in 1992.

That’s when 31,000 people, “at the stroke of a pen on a single day, were completely removed from the Newfoundland inshore fishery. Something that had gone on for 450 years, that defined the culture, the humour, the idiom, the songs, the pattern of settlement, the whole idea of Newfoundland, was wrapped up in that fishery…. For the first time in 500 years no one could jig a codfish and have it for supper. But also it was 31,000 people abruptly unemployed.”

Proportionately that would have been 660,000 people in Ontario, he added. One man he knew, desperately hoping for a job in Hamilton, sold his house for seven plane tickets. “That’s how rough it was.”

Rex Murphy sees human casualties in the war on Canada’s resource industries

But as one regional resource economy collapsed, another boomed. Alberta’s oilpatch needed workers. Murphy calls it “one of the great rescue operations of Canadian Confederation, which most people still haven’t even heard about…. It was one of the great moments, unsung, of Confederation at work, where one region of the country, very willingly, allowed a strange bunch with certainly a stranger language to wander into their province … one of the great songs that we should be singing, that the enterprise of Alberta and a primary industry rescued one of the great social and cultural blows of another part of the Confederation. Did you ever hear about it?”

We more likely heard vilification, often coming from activists, celebrities, media and increasingly Ottawa, he maintained. “You heard every criticism you could hear about poor Fort McMurray. Even after the fire they went after it…. You had the oil price decline, you had the burning of Fort McMurray, you had a flood in Fort McMurray, you had the departure of capital from Fort McMurray, you had the layoff of engineers in Fort McMurray, and what did they decide was the cure? Let’s bring in a carbon tax.

“I mean, the poor creature’s already laid out on the morgue table and they want to take another few shots at the head.”

Rex Murphy sees human casualties in the war on Canada’s resource industries

Resource extraction was vital to the generations who built this country, Murphy emphasized. “It is only in a country as prosperous as our own that we get to the point where we denigrate and derogate the essential industries that brought us precisely to where we are.”

Prosperity, or at least just simply work, can provide intangible benefits too, he pointed out.

“Do you know what it’s like not to have work? There’s no psychological stress greater except loss of a loved one or breakup of a family…. It’s not just the work, it’s not just the paycheque, it is the fulfillment of the human personality.”

Although often incredulous, Murphy’s cri de coeur falls short of actual despair, especially when laced with homespun humour. Nevertheless a despairing thought might occur to listeners who wonder whether the intangible value of an earned paycheque matters much in a culture of entitlement, or among those who find remuneration in activism. As for work’s fulfillment of the human personality, maybe another type of personality has gained prominence, one that finds fulfillment in espousing fashionable convictions and obstructing useful projects.

What remains to be seen is whether the people he speaks for are declining, in numbers as well as influence. Maybe previous generations could have offset such a fate by producing a few more Rex Murphys.

Videos of VRIC 2019 presentations will be posted online in the coming weeks by Cambridge House International.

Streamers turn to cobalt as Vale extends Voisey’s Bay nickel operations

June 11th, 2018

by Greg Klein | June 11, 2018

It was a day of big moves for energy minerals as China bought into Ivanhoe, Vale lengthened Voisey’s and streaming companies went after the Labrador nickel mine’s cobalt.

On June 11 Robert Friedland announced CITIC Metal would pay $723 million for a 19.9% interest in Ivanhoe Mines TSX:IVN, surpassing the boss’ own 17% stake to make the Chinese state-owned company Ivanhoe’s largest single shareholder. Another $78 million might also materialize, should China’s Zijin Mining Group decide to exercise its anti-dilution rights to increase its current 9.9% piece of Ivanhoe.

Streamers turn to cobalt as Vale extends Voisey’s Bay nickel operations

At peak production, Voisey’s underground operations are expected to
ship about 45,000 tonnes of nickel concentrate annually to Vale’s
processing plant at Long Harbour, Newfoundland.

Proceeds would help develop the flagship Kamoa-Kakula copper-cobalt mine in the Democratic Republic of Congo and the Platreef platinum-palladium-nickel-copper-gold mine in South Africa, as well as upgrade the DRC’s historic Kipushi zinc-copper-silver-germanium mine. Ivanhoe and Zijin each hold a 39.6% share in the Kamoa-Kakula joint venture.

Even bigger news came from St. John’s, where Newfoundland and Labrador Premier Dwight Ball joined Vale NYSE:VALE brass to herald the company’s decision to extend Voisey’s Bay operations by building an underground mine.

The announcement marked the 16th anniversary of Vale’s original decision to put Voisey (a Friedland company discovery) into production. Mining began in 2005, producing about $15 billion worth of nickel, copper and cobalt so far. Open pit operations were expected to end by 2022. Although a 2013 decision to go ahead with underground development was confirmed in 2015, the commitment seemed uncertain as nickel prices fell. That changed dramatically over the last 12 months.

With construction beginning this summer, nearly $2 billion in new investment should have underground operations running by April 2021, adding at least 15 years to Voisey’s life. The company estimates 16,000 person-years of employment during five years of construction, followed by 1,700 jobs at the underground mine and Long Harbour processing plant, with 2,135 person-years in indirect and induced employment annually.

Nickel’s 75% price improvement over the last year must have prodded Vale’s decision. But streaming companies were quick to go after Voisey’s cobalt. In separate deals Wheaton Precious Metals TSX:WPM and Cobalt 27 Capital TSXV:KBLT have agreed to buy a total of 75% of the mine’s cobalt beginning in 2021, paying US$390 million and US$300 million respectively. They foresee an average 2.6 million pounds of cobalt per year for the first 10 years, with a life-of-mine average of 2.4 million pounds annually.

Both companies attribute cobalt’s attraction to clean energy demand and a decided lack of DRC-style jurisdictional risk. But Vale also emphasizes nickel’s promise as a battery metal. Last month spokesperson Robert Morris told Metal Bulletin that nickel demand for EVs could rise 10-fold by 2025, reaching 350,000 to 500,000 tonnes.

Total nickel demand currently sits at slightly more than two million tonnes, Morris said. New supply would call for price increases well above the record levels set this year, he added.

Kapuskasing Gold president/CEO Jon Armes discusses the company’s expansion into Newfoundland’s Gunners Cove area

February 22nd, 2018

…Read more