Thursday 19th July 2018

Resource Clips


Posts tagged ‘platinum’

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.

Who’s doing what, and why?

May 10th, 2018

Four banks manipulate six commodities to manage other markets, says Ed Steer

by Greg Klein

Probably the most facile way to dismiss a conspiracy theorist is to label the person “a conspiracy theorist.” Conventional thinking gives the term negative connotations, even though history and current events have an inconvenient tendency to reveal conspiracies in action. Ed Steer’s interest in bullion manipulation started with the Hunt brothers’ 1970s silver conspiracy. Having spent decades watching the machinations of others, the newsletter writer and Gold Anti-Trust Action Committee board member adamantly declares that “there are no markets, just interventions.”

Four banks manipulate six commodities to manage other markets, says Ed Steer

Ed Steer speaks at the International Mining
Investment Conference, held in
Vancouver on May 15 and 16.

Drawing on the work of GATA and analyst Ted Butler, Steer believes precious metals “have been managed actively” in the COMEX futures market since 1973. Price suppression supports “the paper game they’re playing in the stock and bond markets,” a game that’s continued since the U.S. dropped the gold standard in 1971, he argues.

“We’ve had a complete blow-up of paper assets because of unlimited money printing. They don’t want that showing up in the commodities market because the moment that it does, all the paper’s going to rush out of Wall Street, the bond market, the Dow and every other index, and into gold and silver in particular and commodities in general. And that’s not what they want to happen.”

If those two metals merit suppression, so do platinum and palladium. “You couldn’t have a $3,000 or $4,000 platinum price while gold’s sitting at $1,200,” he states. “People would start asking questions.”

Not just bullion but, more recently, copper and crude too. “If you can control the prices of those six, you can pretty well control the prices of other commodities, whether they’re wheat, oats, sugar, lumber or whatever. There will be circumstances of course when supply-demand factors in some commodities will cause a run-up in prices. But overall, they keep those six commodities under price control and, when they do that, they can control everything else.”

Who are they? He attributes special prominence to JPMorgan Chase. “They’re the biggest players in all four precious metals, and they’re also in the crude oil market to a certain extent. It’s JPMorgan Chase, HSBC USA, Scotiabank here in Canada, and most likely Citigroup, but JPMorgan is by far the ringleader. There may be some investment houses involved as well like Morgan Stanley and I think Goldman Sachs, which is now a bank. So it’s the Wall Street paperhangers, four or five of them versus everybody else. There’s also lots of foreign banks involved, maybe up to 30, but their positions are very, very minor compared to the big traders that control almost 50% of the COMEX futures market in gold right now.

Four banks manipulate six commodities to manage other markets, says Ed Steer

“This is total collusion. They all buy at the same time, they all sell at the same time…. There’s no free market in any of this.”

Now, with the gold-silver ratio sometimes surpassing 80 to one, Steer blames this extraordinary divergence on the same tactics.

“JPMorgan has taken silver down from $49 in 2011 all the way to $16 or $17, and they’ve held it there. If the gold-silver ratio were even close to normal it would be around 25 or 30 to one. Of course that would be double or triple the silver price that we have today, and even that doesn’t fully take into account supply and demand. As far as I’m concerned the silver price should be well over $100 an ounce by now and the ratio should be about 20 to one.”

Oil presents another example. “It’s up over 30% since the middle of December. The gold price has done basically nothing. That’s not what normally happens. When oil prices rise, it’s a sign that commodity prices will rise and of course gold and silver are normally the leading indicators. The metals aren’t being allowed to function as leading indicators because they’re trying to get the oil price up without affecting gold and silver prices—and they’ve done an awesome job of that.”

It doesn’t make any difference how many bombs fall on Syria, Iraq or Iran, or what the supply-demand situation is. It all depends on what’s happening in the COMEX futures market.

External forces play little or no role, he maintains. “It doesn’t make any difference how many bombs fall on Syria, Iraq or Iran, or what the supply-demand situation is. It all depends on what’s happening in the COMEX futures market.”

He does concede, however, “If things got really extreme, if downtown Tehran disappeared under a mushroom cloud, that would probably move the markets.”

But sometime in the foreseeable future, those in control will have to let bullion rise, he adds. “It’s very hard to defend this price right now. Demand is exceeding supply, certainly in gold. They’re going to have to increase the prices in both gold and silver, but whether they’ll allow prices to run free remains to be seen. They might just allow gold to rally $300 or $400 or so, and up to $50 in silver, and hold the prices at that new level. But they’re going to have to let it go sooner or later and I think the day is coming sooner.”

That would mean the two metals do offer a safe haven after all. “I think this COMEX futures paper game is going to end pretty soon and those who were already positioned are going to reap substantial rewards. It’s better to be a year or two early rather than five minutes or two days late.”

Ed Steer speaks at the International Mining Investment Conference, held in Vancouver from May 15 to 16. For a 25% admission discount click here and enter the code RESOURCECLIPS.

Read about conference speakers Jayant Bhandari and Simon Moores.

Silver supply deficit fails to boost price, Silver Institute study finds

April 16th, 2018

by Greg Klein | April 16, 2018

Notwithstanding a decline in production, silver fell slightly in price and lost further ground to gold last year, according to the World Silver Survey 2018. Prepared by Thomson Reuters for the Silver Institute, the 28th annual study reported total supply of 991.6 million ounces in 2017, compared with physical demand of 1,017.6 million ounces. The 26-million-ounce deficit grew to 35.2 million ounces when ETP and exchange inventory increases were factored in.

Silver supply deficit fails to boost price, Silver Institute study finds

But at $17.05, the average price represented a 0.5% year-on-year drop. The metal ended the year at $16.87, having traded between $15.22 and $18.56 during 2017.

While recycling provided most of the remaining supply, the year’s global mine production came to 852.1 million ounces. That represented a 4.1% decline attributed largely to “supply disruptions in the Americas,” most notably Guatemala, where Tahoe Resources TSX:THO had its Escobal mining licence suspended, and the U.S., where a strike beginning in March 2017 forced Hecla Mining NYSE:HL to slash production at its Lucky Friday mine. Australia and Argentina also showed considerable declines.

Canada, ranking 14th for silver production, extracted 12.7 million ounces last year, compared with 13 million in 2016.

Meanwhile, gold has been leaving silver behind. Year-end prices for 2016 showed the yellow stuff selling for 71.4 times the price of its poorer cousin. The 2017 gold:silver ratio averaged 73.9:1, hitting 77:1 by year-end, “a high level that perhaps suggests that the market is trying to tell us something,” Thomson Reuters stated. “We suspect the high gold:silver ratio indicated that the market had been expecting another major crisis could be looming, or at the least that it was about time for equities correction, and therefore investors had been accumulating physical gold in the market.”

Another precious metal also paled in comparison with gold, which ended 2017 at an historical high of 1.4 times the price of platinum.

But investors looking at silver and platinum’s catch-up potential should consider “gold’s role as a safe haven and that some smart money has been hedging against geopolitical risks and potential correction in equities,” the study added.

New in numismatics: Ovoid-shaped black light coin commemorates Manitoba UFO sighting

April 4th, 2018

by Greg Klein | April 4, 2018

The story was weird enough to elicit disbelief, possibly all the more because the source was a prospector. But something very odd must have caused the burns Stefan Michalak suffered in the Manitoba woods one day in 1967. His explanation was a UFO. Now the Royal Canadian Mint has commemorated the Falcon Lake Incident with a rather weird item of its own—an unevenly elliptical glow-in-the-dark $20 one-ounce silver coin.

New in numismatics Ovoid-shaped black light coin commemorates Manitoba UFO sighting

For dramatic effect, as the Mint explains, “photo-luminescent outlines of the UFO, its beam-like blast and the silhouette of an injured Michalak, glow in the dark under black light. This phenomenal keepsake, and many other new arrivals, are now available for purchase.” A small black light flashlight’s included.

But, as Michalak’s son emphasized to the CBC last year, Stefan never claimed to have seen anything from outer space. He simply described what he did see. He even speculated that it might have been a secret U.S. military vessel. UFO researcher Chris Rutkowski called it “possibly Canada’s best-documented UFO case.”

Just 4,000 copies of the coin have been minted. With a face value of $20, it costs only $129.95.

New in numismatics Ovoid-shaped black light coin commemorates Manitoba UFO sighting

(Images: Royal Canadian Mint)

Taking unusual contours to an even more unusual level, the Mint also released a set of two yin-yang-shaped pieces that fit together to form a one-ounce silver circle. Suggesting “harmony and balance among opposing forces,” yin and yang each have a $10 face value. But the set will cost you $164.95.

Among the more striking designs recently struck is “an ultra-high relief engraving” of the Kwakwaka’wakw Thunderbird image, likely to send chills down the spine of anyone not already shivering in the West Coast rainforest’s lingering winter. Another one-ounce silver coin, this one sells for $149.95.

Some imaginative February releases included a $250 gold coin embedded with 17 rubies and platinum plating to evoke the Queen’s Burmese Tiara. Limited to 175 copies, it costs $6,999.95 with three- or four-month payment plans available. February also saw the Mint’s first five-ounce curved or convex coin, the silver $50 Maple Leaves in Motion. It goes for $579.95 but 99% of the 2,000 coins have been sold.

Each of the collector’s items comes with a 30-day money-back guarantee.

Canada’s coin-casting Crown corporation credits itself as “one of the largest and most versatile mints in the world.”

King’s Bay Resources reports initial drill results from Labrador nickel-cobalt project

January 16th, 2018

by Greg Klein | January 16, 2018

Although collared 150 metres apart, the first two holes on King’s Bay Resources’ (TSXV:KBG) Lynx Lake property both showed nickel-cobalt values above background levels over wide intervals.

King’s Bay Resources reports initial drill results from Labrador nickel-cobalt project

Lynx Lake has the Trans-Labrador Highway
bisecting the property, as well as adjacent power lines.

Hole LL-17-01 brought 0.058% nickel and 0.013% cobalt over 115.2 metres. LL-17-02 returned 0.057% nickel and 0.014% cobalt over 110.8 metres (not true widths). The thickness of the intervals and distance between the holes suggest “potential for a more localized zone of economic mineralization in the area,” the company stated. Assays for gold, platinum and palladium are expected later this month.

The initial drill campaign tested a small part of an approximately 24,200-hectare property. Under focus was the project’s West Pit, where airborne VTEM found a shallow anomaly of high resistivity measuring about 400 metres in diameter and 50 to 300 metres in depth. Historic, non-43-101 grab sample assays from the area graded up to 1.03% copper, 0.566% cobalt, 0.1% nickel, 5 g/t silver, 0.36% chromium, 0.39% molybdenum and 0.23% vanadium.

Other historic, non-43-101 grab samples from the property’s east side showed up to 1.39% copper, 0.94% cobalt, 0.21% nickel and 6.5 g/t silver.

King’s Bay now plans geostatistical and structural analysis to identify more drill targets. A field crew returns later this year.

Meanwhile a 6% copper grade highlighted last month’s results from the company’s Trump Island project in northern Newfoundland. Four of 15 outcrop samples surpassed 1% copper and also showed cobalt assays up to 0.12%.

In September King’s Bay offered a $250,000 private placement that followed financings totalling $402,000 that closed the previous month.

Bullion buyers beware: Fake bars and coins hit the market

November 1st, 2017

by Greg Klein | November 1, 2017

Pssst… Wanna buy an ounce of gold for a buck? One Vancouver Craigslist vendor’s offering such a deal, to be transacted in a “safe spot for the both of our safety” [sic]. The merchandise consists of a bar supposedly produced by the Royal Canadian Mint. The seller claims to have other gold bars and maple leaf coins available.

Bullion buyers beware: Fake bars and coins hit the market

Although the Royal Canadian Mint safeguards
its products, at least one fake has surfaced.

While it’s not clear what the $1 ploy intends to accomplish (and the offer changed as this story was being written), the sales pitch comes after CBC revealed that an Ottawa branch of the Royal Bank sold a fake one-ounce bar attributed to the Mint. The Mint denied supplying the fake, saying that counterfeits of its bullion products are “extremely rare and this is an isolated case.”

But as a number of critics responded, bullion and currency counterfeiters don’t normally produce one-off fakes.

That was a point also emphasized by two U.S. congressmen who chastised their country’s mint and Secret Service for not investigating a batch of fake American Eagle gold coins. As reported in Goldseek, their letter included what appeared to be a 1995 example. “You are free to keep it, as it’s a worthless tungsten fake,” the congressmen stated.

They go on to ask what investigations have taken place into fake bullion and what anti-counterfeiting measures are being introduced “to protect the integrity of U.S. coins minted specifically of gold, silver, platinum and palladium.”

A statement from Canada’s mint emphasizes its world-class assay lab and “advanced anti-counterfeiting features … such as Bullion DNA technology and micro-engraved security marks.”

Kitco referred to a recent statement from the Professional Numismatists Guild calling fake bullion a multi-million-dollar business. By happy coincidence a news outlet and bullion dealer, Kitco emphasized the importance of buying from a reputable seller.

But as Murenbeeld & Co analyst Brian Bosse told CBC, “The real question is, how did this get into RBC’s inventory?” An RBC spokesperson said the bank has an internal investigation underway “but wouldn’t say if the bank is making changes to how it handles and verifies bullion,” CBC added.

Bosse warned the network that counterfeiting could place a chill on the bullion market.

Visual Capitalist: One chart shows EVs’ potential impact on commodities

September 15th, 2017

by Jeff Desjardins | posted with permission of Visual Capitalist | September 15, 2017

 

One chart shows EVs’ potential impact on commodities

The Chart of the Week is a Friday feature from Visual Capitalist.

 

How demand could change in a 100% EV world

What would happen if you flipped a switch and suddenly every new car that came off assembly lines was electric?

It’s obviously a thought experiment, since right now EVs have close to just 1% market share worldwide. We’re still years away from EVs even hitting double-digit demand on a global basis, and the entire supply chain is built around the internal combustion engine, anyways.

At the same time, however, the scenario is interesting to consider. One recent projection, for example, put EVs at a 16% penetration by 2030 and then 51% by 2040. This could be conservative depending on the changing regulatory environment for manufacturers—after all, big markets like China, France and the UK have recently announced that they plan on banning gas-powered vehicles in the near future.

The thought experiment

We discovered this “100% EV world” thought experiment in a UBS report that everyone should read. As a part of their UBS Evidence Lab initiative, they tore down a Chevy Bolt to see exactly what is inside, and then had 39 of the bank’s analysts weigh in on the results.

After breaking down the metals and other materials used in the vehicle, they noticed a considerable amount of variance from what gets used in a standard gas-powered car. It wasn’t just the battery pack that made a difference—it was also the body and the permanent-magnet synchronous motor that had big implications.

As a part of their analysis, they extrapolated the data for a potential scenario where 100% of the world’s auto demand came from Chevy Bolts, instead of the current auto mix.

The implications

If global demand suddenly flipped in this fashion, here’s what would happen:

Material Demand increase Notes
Lithium 2,898% Needed in all lithium-ion batteries
Cobalt 1,928% Used in the Bolt’s NMC cathode
Rare Earths 655% Bolt uses neodymium in permanent magnet motor
Graphite 524% Used in the anode of lithium-ion batteries
Nickel 105% Used in the Bolt’s NMC cathode
Copper 22% Used in permanent magnet motor and wiring
Manganese 14% Used in the Bolt’s NMC cathode
Aluminum 13% Used to reduce weight of vehicle
Silicon 0% Bolt uses six to 10 times more semiconductors
Steel -1% Uses 7% less steel, but fairly minimal impact on market
PGMs -53% Catalytic converters not needed in EVs

Some caveats we think are worth noting:

The Bolt is not a Tesla

The Bolt uses an NMC cathode formulation (nickel, manganese and cobalt in a 1:1:1 ratio), versus Tesla vehicles which use NCA cathodes (nickel, cobalt and aluminum, in an estimated 16:3:1 ratio). Further, the Bolt uses a permanent-magnet synchronous motor, which is different from Tesla’s AC induction motor—the key difference being rare earth usage.

Big markets, small markets

Lithium, cobalt and graphite have tiny markets, and they will explode in size with any notable increase in EV demand. The nickel market, which is more than $20 billion per year, will also more than double in this scenario. It’s also worth noting that the Bolt uses low amounts of nickel in comparison to Tesla cathodes, which are 80% nickel.

Meanwhile, the 100% EV scenario barely impacts the steel market, which is monstrous to begin with. The same can be said for silicon, even though the Bolt uses six to 10 times more semiconductors than a regular car. The market for PGMs like platinum and palladium, however, gets decimated in this hypothetical scenario—that’s because their use as catalysts in combustion engines are a primary source of demand.

Posted with permission of Visual Capitalist.

Robert Friedland talks copper, zinc, PGMs and China’s “airpocalypse”

August 28th, 2017

…Read more

Visual Capitalist: How commodities performed in H1 and why they’re very cheap

July 5th, 2017

by Jeff Desjardins | posted with permission of Visual Capitalist | July 5, 2017

If you’re looking for action, the commodities sector has traditionally been a good place to find it.

With wild price swings, massive up-cycles, exciting resource discoveries and extreme weather events all playing into things, there’s rarely a dull day in the sector. That being said, it’s hard to remember a more lacklustre period for commodities than the last couple of years.

For commodity bulls, the good news is that the sector is no longer tanking. The bad news, however, is that all the recent action has been in relatively niche sectors, as metals like cobalt, zinc and lithium all have their day in the sun.

At the same time, the big commodities (gold, oil, copper) have all slid sideways, having yet to revisit their former periods of glory.

Commodity winners so far

Before we highlight why commodities could still be cheap, let’s look at recent performance to get some context. Here are the commodities that have positive returns in H1 2017 so far:

How commodities performed in H1 and why they’re very cheap

 

Palladium is the best performer in 2017 so far, and it has now almost passed platinum in price. That would be the first time since 2001 that this has happened, and for the stretch of 2007 to 2012 it was even true that palladium traded at a $1,000 deficit to platinum.

Agricultural goods like rough rice, lean hogs, oats and wheat have also gotten more expensive so far this year. Meanwhile, metals like gold, copper and silver have seen modest gains—but only after dismal performances in the last part of 2016.

The losers so far

Here is the scoreboard for the commodities in negative territory, with the most noticeable losses in sugar and energy.

How commodities performed in H1 and why they’re very cheap

 

Are commodities cheap?

From the post-crisis bottom in 2009 until today, the S&P 500 is up a staggering 215.4%.

During that same timeframe, most major commodities crashed and then went sideways. The Goldman Sachs Commodity Index (GSCI) is down roughly 31.2%, which is a strong juxtaposition to how equities have done.

This extreme divergence can be best seen in this long-term chart, which compares the two indices since 1971.

How commodities performed in H1 and why they’re very cheap

 

In other words: Despite the lack of action in commodities that we noted earlier, the sector has never been cheaper relative to equities, even going back 45 years.

That means that there could be some much-needed action soon.

Posted with permission of Visual Capitalist.

Numismatic news: Loonie turns 30, Rio Tinto unveils precious metal/diamond coins

June 8th, 2017

by Greg Klein | June 8, 2017

Its size and weight wore out pockets, its value raised panhandlers’ expectations and its name puzzled foreign visitors. But following its appearance 30 years ago this month, the loonie “found its way into our hearts,” the Royal Canadian Mint maintains. To celebrate this anniversary, the Mint released a limited edition set of two silver dollars. One depicts the loon, the other shows the originally intended canoe, a design that graced Canadian silver dollars from 1935 to 1986. The two $1 coins will cost collectors $79.95.

Numismatic news: Loonie turns 30, Rio Tinto unveils precious metals/diamond coins

The originally intended design for Canada’s dollar coin
distinguishes one of the anniversary set’s two silver pieces.
(Photo: Royal Canadian Mint)

The original voyageur design’s fate comprises a minor legend of numismatic history and bureaucratic bungling. The dies disappeared in November 1986 en route from Ottawa to Winnipeg, where they were supposed to generate an initial 450 million coins. But the Mint did save nearly $80 by using regular courier instead of an armoured courier.

According to media reports at the time, federal officials covered up the suspicious loss and made excuses for the new coin’s delayed appearance. Finally, to foil counterfeiters, the Mint replaced the canoe with an uninspiring Plan B.

The missing dies never did turn up, Mint spokesperson Alex Reeves informs ResourceClips.com.

With no embarrassment in calling the loonie one of Canada’s “most recognizable symbols,” Mint president/CEO Sandra Hanington said it’s “also known around the world as an innovative trailblazer for its composition and cutting-edge security features.”

Additionally the loonie “changed stripping forever,” according to the National Post. Those who’ve experienced pre-1987 peelers’ bars might agree. But the NP writer’s expertise sounds less certain when he claims the loonie amounts to a hidden tax because “banknotes get spent almost immediately, whereas coins get stashed into jars and piggy banks.”

Australian icons got more majestic treatment when Rio Tinto NYSE:RIO teamed up with the Perth Mint to produce three magnificent coins celebrating that country’s unique fauna and rich resources. Although declared legal tender, they’re not likely to see circulation. Weighing a kilo each, respectively made of gold, platinum and rose gold (an alloy used in jewelry) and set with coloured diamonds from Rio’s Argyle mine, the three-coin Australian Trilogy comes with a price tag of AU$1.8 million.

Just one set has been struck.

Argyle, by the way, “produces virtually the world’s entire supply of rare pink diamonds, and yet less than 0.1% of the diamonds produced by the Argyle mine are pink,” Rio stated.

Numismatic news: Loonie turns 30, Rio Tinto unveils precious metals/diamond coins

Gold, platinum and rose gold combine with pink, violet and
purple-pink diamonds in this one-of-a-kind set. (Photo: Perth Mint)

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