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Posts tagged ‘Paladin Energy Ltd (PDN)’

Chinese uranium trader signs LOI for $82-million strategic investment with Fission

December 21st, 2015

by Greg Klein | December 21, 2015

While campaigning on behalf of the doomed merger with Denison Mines TSX:DML last July, Fission Uranium TSX:FCU chairperson/CEO Dev Randhawa defended the proposal by saying, “One of the things I run into when I go to Asia is they say I’m too small.” But on December 21 the company announced a letter of intent for an $82.22-million private placement from a Hong Kong-listed uranium trader, CGN Mining Company Ltd. Its controlling shareholder is China Uranium Development Company Ltd, a subsidiary of the energy utility China General Nuclear Power Corp. The deal would leave CGN with 19.99% of Fission.

Chinese uranium trader signs LOI for $82-million strategic investment with Fission

The $82-million deal would give a Chinese
company nearly 20% of the Triple R deposit.

Randhawa called it “the first time a Chinese company has invested directly in a Canadian uranium company.” The parties also pledged to work towards an offtake agreement.

They hope to close by January 29. Among the requirements are approvals from the TSX, CGN shareholders, the Hong Kong exchange and the Chinese government. Should either party back out or CGN fail to win approvals by February 29, a $3-million break fee takes effect.

CGN would nominate two directors to Fission’s board, which would grow from seven to nine members.

Last June the Canadian government approved Australia-headquartered Paladin Energy’s (PDN) ownership of the proposed Michelin mine in Labrador, relaxing a 1987 policy that requires at least 51% Canadian ownership of uranium mines. The policy doesn’t apply to exploration and development projects.

Fission’s Patterson Lake South project, just outside Saskatchewan’s Athabasca Basin, reached PEA in September with numbers that the company said makes its Triple R deposit potentially one of the world’s lowest-cost uranium producers. Last week the company fended off dissident shareholders to elect its management slate to the board.

Fission’s next-door neighbour hasn’t done badly in financing either. Last month NexGen Energy TSXV:NXE announced a $20-million bought deal, which followed a $23.74-million private placement that closed in May. The Arrow zone of the company’s Rook 1 project has its maiden resource scheduled for H1 2016.

Patterson Lake South’s still up for grabs as Fission/Denison merger fizzles

October 13th, 2015

by Greg Klein | October 13, 2015

Two renowned dealmakers have failed in their plan to merge the Athabasca Basin’s two most prominent exploration companies. On October 13 Fission Uranium TSX:FCU and Denison Mines TSX:DML announced that proxies submitted four days earlier showed majority support from both companies but fell short of the two-thirds vote required from Fission shareholders. The companies called off shareholders’ meetings scheduled for October 14.

Patterson Lake South’s still up for grabs as Fission-Denison merger fizzles

Potentially one of the world’s lowest-cost uranium mines
according to its PEA, Patterson Lake South seeks a new owner.

Fission shareholders expressed skepticism soon after the proposal was announced in early July, putting CEO Dev Randhawa on the defensive in a conference call. To drum up support, he and Denison director Lukas Lundin then spoke to shareholders at an October 6 town hall meeting in Toronto.

The deal would offer Fission “superb access to capital via the Lundin Group,” as well as a large Denison portfolio featuring its 60%-held Wheeler River project and 22.5% interest in the McClean Lake mill, Randhawa maintained. He and Lundin noted “two of the leading independent proxy advisory firms,” Institutional Shareholder Services and Glass Lewis & Co, recommended a yes vote.

A week prior to the proxies, the National Post’s Peter Koven reported strong support from Fission’s institutional shareholders but stated “the vast majority of the stock is held by retail shareholders, some of whom are loudly resisting the deal.”

A website called FCU Oversight argued that from the outset the terms severely undervalued Fission’s sole asset, Patterson Lake South, and included “no value” for the preliminary economic assessment released in early September.

FCU Oversight added that Denison’s “Athabasca projects are located on the eastern side of the basin and are not considered as robust, or as readily minable. The balance of Dennison’s [sic] international assets are simply not synergistic to Fission.” The website also questioned the appointments of Fission brass to positions with the new company.

Randhawa told Koven he foresaw no deal with giants like Cameco Corp TSX:CCO or AREVA. Fission has shown no interest in taking PLS into production itself. In fact the company was set up specifically to be sold after spinning out its other assets to Fission 3.0 TSXV:FUU to make PLS a more attractive take-out target.

Foreign suitors might be emboldened by last June’s federal government decision to allow Australian Paladin Energy’s (PDN) ownership of its proposed Michelin mine in Labrador. Canada requires at least 51% domestic ownership of uranium operations but allows exceptions when no Canadian partners materialize.

The failed merger marks the second time PLS has slipped through Denison’s fingers. The company nearly got the project in November 2012 with Denison’s takeover of Fission Uranium’s predecessor, Fission Energy. Before the deal was signed, Fission Energy’s joint venture partner Alpha Minerals struck massive pitchblende and strong radioactivity in the project’s discovery hole. Randhawa renegotiated the deal with Lundin to exclude the project. Fission Uranium bought out Alpha the following year.

Now, of all times, John Borshoff steps down from Paladin

August 10th, 2015

by Greg Klein | August 10, 2015

Even with Japan’s first nuclear restart expected imminently, one of uranium’s staunchest evangelists might not be in the business long enough to see his predicted price hike. On August 10 Paladin Energy TSX:PDN announced that its board and managing director/CEO John Borshoff “agreed that Mr. Borshoff will step down from his role with the company.” He stays on for a six-month transitional period while Alexander Molyneux takes over as interim CEO.

Now, of all times, John Borshoff steps down from Paladin

John Borshoff

Having founded Paladin over 21 years ago, Borshoff continued to guide it through the post-Fukushima period, suspending operations at the Kayelekera mine in Malawi and selling off 25% of its Langer Heinrich operation in Namibia to China National Nuclear Corp. All the time he both reassured investors and warned consumers that severe price hikes were coming. At times, however, he had to push back his forecast dates as the recalcitrant commodity resisted his predictions.

While Paladin struggled with African operations, its much bigger rival Cameco Corp TSX:CCO went to enormous effort to expand production with its Cigar Lake mine in Saskatchewan’s Athabasca Basin, home to the world’s highest grades.

A geologist with over 30 years’ experience in Australia and Africa, Borshoff previously worked for International Nickel, Canadian Superior Mining and Uranerz. As a result of his achievements, “Paladin has built a unique position in the uranium mining industry and he is recognized as a world authority in this realm,” the company stated.

Non-executive chairperson Rick Crabb credited him for “the vision, tenacity and spirit to create and lead Paladin.”

Denison Mines president/CEO David Cates supports Canada’s Paladin Energy decision, allowing the Australian company majority ownership of a proposed Labrador uranium mine

July 16th, 2015

…Read more

Benefits of foreign ownership

June 22nd, 2015

Cameco and Denison support Canada’s Paladin decision

by Greg Klein

At least some Canadian uranium companies welcome a decision that they say will encourage greater investment and reciprocal deals overseas. In what Paladin Energy PDN called an historic announcement on June 22, Canada’s federal government approved the Australian’s ownership of its proposed Michelin uranium mine in Labrador. The decision comes under a 1987 policy that requires at least 51% Canadian ownership of uranium mines (although it doesn’t apply to exploration or development projects). Exceptions, however, may take place when no Canadian partners can be found.

The feds’ decision “overcomes a huge hurdle,” said John Borshoff, managing director/CEO of the ASX- and TSX-listed company, which holds 100% of Michelin and currently produces uranium in Namibia.

But the announcement benefits others besides Paladin, indicating “positive news for the space for sure,” Denison Mines TSX:DML president/CEO David Cates tells “I think anything that’s opening up the country for business and investment from abroad is good for all uranium companies, whether it’s through partnership or an M&A deal.”

Cameco and Denison support Canada’s Paladin decision

The government decision also brings to mind an October 2013 agreement in principle between Canada and the EU to scrap the 49% limit on foreign ownership. Ratification of the accord, which reportedly followed intense lobbying from Rio Tinto NYE:RIO and French giant AREVA, could take two years following the initial agreement. AREVA, active in several Canadian joint ventures, holds a 64.8% stake in the advanced-stage Kiggavik project in Nunavut.

Cates doesn’t think the sector necessarily needs the restriction. “What would we be protecting against?” he asks, pointing out that Canada exports most of its uranium. “If we’re going to sell to the world anyway, why not let the world’s capital develop some of those resources and generate returns for Canadians through tax dollars and jobs?”

The feds’ announcement valued this country’s exports at more than $1 billion per year, making Canada the world’s second-largest supplier. Canada’s nuclear industry employs over 30,000 workers, including 5,000 in uranium mining, according to the Ministry of Natural Resources. Citing Paladin estimates, the announcement said Michelin could “create up to 750 jobs during the construction phase and up to 350 jobs during the operational phase,” should the project make it into production.

“To me, this is just opening up the capital market to other companies,” Cates adds. “It doesn’t have to start with a takeout. It could start with a strategic investment that turns into an acquisition of control down the road. Either way, Canadian companies and Canadian shareholders are going to benefit.”

Cameco Corp TSX:CCO actually backed Paladin’s application with a letter of support, senior communications specialist Carey Hyndman tells “We take no issue with the government liberalizing those restrictions, when it comes to countries that offer that reciprocal access. Australia of course has those policies that allow us to do the same.”

But might there be a downside for Cameco? By far Canada’s largest uranium company, it has long dominated Saskatchewan’s Athabasca Basin, home of the world’s highest grades. Even so, the company was accused of complacency in 2012, when Rio grabbed the Roughrider deposit from under Cameco’s nose, with the Anglo-Australian’s $654-million buyout of Hathor Exploration. Any relaxation of foreign ownership restrictions might bring more competition.

It doesn’t have to start with a takeout. It could start with a strategic investment that turns into an acquisition of control down the road. Either way, Canadian companies and Canadian shareholders are going to benefit.—David Cates,
president/CEO of Denison Mines

“As long as we’ve got that reciprocal possibility in the other country, then we think it’s fair to liberalize that restriction,” responds Hyndman.

The governments of Newfoundland and Labrador, Saskatchewan and Australia support the Michelin decision, according to Canada’s Natural Resources ministry.

Cameco owns 100% of Yeelirrie, which the company calls “one of Australia’s largest undeveloped uranium deposits.” Additionally Cameco holds 70% of the Kintyre project, also in Western Australia, which won conditional environmental approval last summer. A decision to begin mining would depend on an improvement in either production potential or uranium’s price, the company said at the time.

While Cameco has been ramping up Canadian production with Cigar Lake, low prices last year forced Paladin to suspend operations at its Kayelekera mine in Malawi and sell 25% of its Namibian Langer Heinrich operation to China National Nuclear Corp.

The Canadian government’s announcement comes as three directors of ASX-listed Energy Resources of Australia resigned, the latest fallout from another casualty of uranium prices. This month Rio abandoned plans to expand the two companies’ Ranger 3 mine in Northern Territory. Majority-owner Rio faces a possible US$300-million impairment.

But Paladin’s June 22 statement quotes the ever-positive Borshoff talking of “the inevitable market improvement ahead.” His company hopes to begin Michelin production “when the uranium price is at an appropriate level and after obtaining all necessary approvals and consents.” More immediate plans call for a summer exploration program beginning in July, followed by about 6,000 metres of winter drilling.

Faith in uranium’s hotspot

June 12th, 2015

Low prices take another Australian casualty but Athabasca Basin optimism persists

by Greg Klein

The agonizing wait for uranium’s price breakout has taken its toll on two more Down Under-headquartered miners. ASX-listed Energy Resources of Australia plummeted 48% after abandoning a planned expansion of Northern Territory’s Ranger 3 mine. That leaves Rio Tinto NYE:RIO, which holds 68.4% of ERA, considering a post-tax impairment of about US$300 million.

Low prices take another Australian casualty but Athabasca Basin optimism persists

With uranium grades 100 times the world’s average,
Cigar Lake thrives while competitors shut down.

Explaining the decision to dump Deeps’ feasibility study, ERA’s June 11 announcement noted uranium’s lack of price improvement as well as its uncertainty for the immediate future. Additionally, economics would require operations beyond Ranger’s current permitting span, which ends in 2021.

“After careful consideration,” Rio concurred. The giant “does not support any further study or the future development of Ranger 3 Deeps due to the project’s economic challenges.”

Rio had already cut production at its majority-held Rossing mine in Namibia. A South Australia mine, Honeymoon, was taken offline by Uranium One.

The commodity has eluded positive predictions from many quarters, including ASX- and TSX-listed Paladin Energy PDN, which placed its Kayelekera mine in Malawi on care and maintenance and sold a 25% stake in its Langer Heinrich mine in Namibia to China National Nuclear Corp. Those setbacks haven’t stopped Paladin managing director/CEO John Borshoff from predicting sharp price hikes in near- and medium-term contracts.

The long-anticipated market-moving event would be Japan’s first reactor restarts, which would reduce the country’s apparent stockpile and, maybe more significantly, provide a psychological boost to a demoralized industry. Once scheduled for operation this month, the first two restarts currently face a court injunction.

But demoralization isn’t universal. Although Borshoff’s predictions are generally echoed by Tim Gitzel, the Cameco Corp TSX:CCO president/CEO speaks without Borshoff’s tone of desperation. In contrast, Cameco has been expanding production through its majority-held Cigar Lake, which achieved commercial production on May 1. The engineering marvel expects to add six to eight million pounds U3O8 to world supply this year, before hitting 18 million pounds annually by 2018.

The world will need at least four more Cigar Lakes—this in an industry not known for being quick to bring on new production. A mine can take up to 10 years when things go well.—Rachelle Girard,
IR director for Cameco Corp

Speaking at the Cantor Fitzgerald Annual Global Uranium Conference earlier this month, Cameco IR director Rachelle Girard predicted demand would rise 4% annually to about 230 million pounds U3O8 a year within the next decade, compared with today’s output of about 165 million pounds. Girard counted 63 new reactors now being built, an estimated $740-billion investment. She expects a total of 80 reactors over the next 10 years.

Girard predicts even more to come, noting that two billion people currently have very little or no access to electricity. Another two billion are expected to join them by 2050.

Her employer, she confidently maintained, could supply about 30% of global demand by 2024, up from about 16% now. “We have the pounds in the ground to support a lot of growth when the market calls for it.” But Girard insisted, “The world will need at least four more Cigar Lakes—this in an industry not known for being quick to bring on new production. A mine can take up to 10 years when things go well.”

Cigar Lake was discovered in 1981, began construction in 2005 and started production last year.

Industry executives and analysts say uranium needs to rise to a level of $65 to $80 a pound to justify new development. The most recent (June 8) price indicator publicly released by Ux Consulting floundered at a dismal $35.75.

Girard emphasized Cameco’s “especially pleased that several of our Tier 1 assets are located in the prolific Athabasca Basin.” Home to the world’s highest uranium grades, another exploration season has juniors busy, often on the Basin’s margin where they hope to find not so much the next Cigar Lake but another Patterson Lake South.

Meanwhile David Talbot sees a silver lining in ERA’s woes. Bloomberg quoted the Dundee Capital Markets senior uranium analyst stating that the decision to scuttle Deeps’ feasibility “will have a major impact to world production supply.” Talbot explained that while the expansion would have made Ranger the world’s third-largest uranium mine, its cancellation portends a “very positive” sign for uranium prices.

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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Nuclear energy’s back to pre-Fukushima levels, Russian source states

March 10th, 2015

by Greg Klein | March 10, 2015

Uranium-watchers might remain preoccupied with Japan but the rest of the nuclear world has returned to a “pre-Fukushima state,” according to at least one authority. In an interview with the news agency RIA Novosti quoted by the World Nuclear News on March 10, Leonid Bolshov, director of the Nuclear Safety Institute of the Russian Academy of Sciences, said predictions of a slowdown have proven false.

“Calls for the abandonment of nuclear power crop up every now and then in different countries but these are, as a rule, the result of short-term political speculation and go against the everyday needs of national economies,” the WNN quoted him.

The Japanese reactor shutdowns resulted from a “state of fear” followed by an “emotional” response in other countries that was “unfortunately tied to politics,” Bolshov said. Yet nuclear energy is growing worldwide, he maintained.

Data from the International Atomic Energy Agency shows the world now has 440 nuclear power units in operation and another 68 under construction, the WNN stated.

Ux Consulting gave uranium a March 9 price indicator of $39.25, representing a steady climb since January, when uranium suddenly fell below $36 from its post-Fukushima high of $44 in November. Speaking at January’s Vancouver Resource Investment Conference, GoviEx Uranium CSE:GXU CEO Daniel Major attributed the $44 level to “a single big buyer who came in for a million pounds. It really ran the market and you had some jiggery-pokery with some of the traders.”

Term contracts, however, fetch higher prices. That’s a point often emphasized by Paladin Energy TSX:PDN managing director/CEO John Borshoff, whose public pronouncements remain bullish in the face of poor price performance. In a conference call last month he argued the world would need about 70 million pounds of new annual supply by 2020 to meet growth in China, Japan, the Middle East, India and Russia. A shortage in near- and medium-term supply “appears unavoidable post-2015,” Borshoff insisted.

Year in review

December 23rd, 2014

A mining and exploration retrospect for 2014

by Greg Klein

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Another difficult year notwithstanding, the resource sector failed to meet its apocalyptic doom. With a mixed bag of good, bad and quirky news, looks at some of the stories that helped characterize 2014.

Mount Polley to the breach

Even British Columbia’s environment minister called it a disaster. The August tailings dam collapse at Imperial Metals’ (TSX:III) Mount Polley copper-gold mine presented Canada’s mining industry with its own Exxon Valdez as a river of effluent, later estimated by the company at 24.4 million cubic metres, poured into the once-pristine Quesnel Lake watershed.

The dam’s original engineer was quick to disassociate itself. The current engineer and Imperial each implied the other might be at fault. There were suggestions that the company and the province should have known something was wrong as far back as 2010.

A mining and exploration retrospect for 2014

B.C. appointed a panel of engineers to investigate. B.C.’s Inspector of Mines began a separate investigation. And B.C.’s Information and Privacy Commissioner launched its own investigation—into the government.

B.C. also ordered third-party inspections of 98 tailings facilities at current and former mines. The Canadian Nuclear Safety Commission requested companies report on their uranium tailings facilities.

Alaskans, meanwhile, questioned whether B.C. had the wherewithal to prevent downstream pollution from potential mines in the province’s northwest. A Vancouver Sun study found that the BC Liberal government cut mine inspections by more than half since coming to power in 2001.

Imperial has so far committed $67.4 million towards the disaster. In late December the company announced the sale of a 93-kilometre transmission line extension to the government-owned BC Hydro for $52 million.

B.C.’s performance as a mining jurisdiction

Mount Polley’s shutdown brings to mind the governing BC Liberals’ frequent reminder that more mines closed than opened when the NDP held power. So how’s the province doing under the current regime? According to a list provided by the Ministry of Mines and Energy, seven mines opened since 2001, when the BC Liberals gained power, while five shut down. One mine closed and re-opened. Another seven mines opened and closed. At least one omission in the last category, however, was Treasure Mountain which opened, closed, re-opened and re-closed.

Of course metal and coal prices play a crucial role. But during that period permitting problems plagued other potential operations, like Taseko Mines’ (TSX:TKO) New Prosperity gold-copper project and Pacific Booker Minerals’ (TSXV:BKM) Morrison copper-gold-molybdenum project. Both were refused environmental permits, arguably on non-environmental grounds—New Prosperity by the feds and Morrison by the province.

On a more positive note, Imperial has its Red Chris copper-gold mine now in development. (Please get it right this time.) Seabridge Gold TSX:SEA won provincial environmental approval in July and federal approval in December for Kerr-Sulphurets-Mitchell (KSM), which the company says hosts “one of the largest undeveloped gold and copper reserves in the world.”

An engineering marvel puts Cigar Lake in operation

Evidently the mining industry calls for optimism and perseverance in abundance. That, along with innovation, is what it took for Cameco Corp TSX:CCO to finally bring its Cigar Lake uranium project into production in March. Encouraging the heroic endeavour is an ore grade 100 times the world average, suggesting that high grade is the mother of invention.

The Saskatchewan mine’s 33-year saga began with a 1981 discovery, then continued with a number of setbacks that stalled construction. Even after the mine’s widely celebrated opening, Cigar Lake shut down from mid-July to early September for remedial freezing. Majority-owner Cameco injects and freezes a brine solution around the rock body to prevent flooding through the Athabasca sandstone. Water jet boring then pummels the ore into a slurry.

But the company’s determination seems at odds with uranium’s price. When a Scotiabank analyst asked why Cameco was bringing new uranium into an oversupplied market, president/CEO Tim Gitzel replied, “We need the pounds. We’ve got sales commitments for those pounds.”

The uranium price tease

A mining and exploration retrospect for 2014

Chart: Ux Consulting

Among the most vociferous prophets of a new uranium order, Paladin Energy TSX:PDN managing director/CEO John Borshoff keeps revising his gotta-happen-soon predictions of rising prices. He’s not the only one, so Borshoff was probably more frustrated than embarrassed when uranium once again proved him wrong.

The recalcitrant commodity seemed to perk up in early August, with a spot price indicator that rose 25% by late October. A nearly 90-degree ascent to $44 by mid-November seemed to justify Borshoff’s outlook. Alas, fickle uranium let down its believers, along with its price.

Borshoff’s boosterism, however, is backed up by others including Cameco’s Gitzel and David Talbot of Dundee Capital Markets, who in November stated, “We have always said, just like in 2006-2007, when [longer-term] contracting begins and the price moves, it will move fast.”

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Paladin Energy managing director/CEO John Borshoff expects higher contract prices for uranium in 2015

December 3rd, 2014

…Read more