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Resource Clips

Posts tagged ‘Solid Gold Resources Corp (SLD)’

Week in review

April 12th, 2013

A mining and exploration retrospect for April 6 to 12, 2013

by Greg Klein

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Projects go under, under new Ontario law

“We’re not working in Ontario any longer and, yes, that’s because of these regulations.” Friday’s Toronto Star quoted Wally Rayner, VP of exploration for Mineral Mountain Resources TSXV:MMV, on the provincial Mining Act amendments that took full effect April 1.

Gone is the free entry system. In its place are requirements that companies and individual prospectors file plans with the government for even the earliest-stage work. That’s followed by a minimum 30-day period for public comments. Prospectors and explorers are now specifically required to consult and accommodate aboriginals. “Many find the regulations too onerous for an industry already in dire financial straits,” the Star reported.

A mining and exploration retrospect

Last month, even before the new regs took hold, Solid Gold Resources TSXV:SLD was denied an exploration permit in what the company said “appears to be a politically motivated abuse of power and indicates the unfair political interference that permeates the new exploration regime.” Now trading for a penny, the company has had uneasy relations with a Timmins-region native band.

Last February International Millennium Mining TSXV:IMI backed out of an option on its Hope Lake property, saying “the constraints of Ontario’s modernized Mining Act provided incentive for ending the agreement.”

Mineral Mountain’s Rayner also told the Star that delays jeopardize spending deadlines mandated by flow-through shares. “If the exploration is held up because of consultations or permits, then this whole financing system falls apart,” he said.

The reporter added, “The Ontario Bar Association echoed that concern in a submission to the ministry last year.”

The new act presents problems for natives too. Shawn Batise, executive director of the Wabun Tribal Council, told the Star his group has been overwhelmed with requests for consultation. “Today we got 12 requests, eight yesterday, six the day before, 20 last week…”

As for Quebec …

Over 10,000 people signed a petition expressing concern about possible changes to the province’s royalties structure, the Quebec Mining Association announced on Tuesday. Following a round of talks with industry reps, the Parti Quebecois government now ponders a 5% tax on the gross value of annual mine production and a 30% royalty on yet-to-be-defined “super profits.”

“Quebec has already the highest royalties and corporate tax rates among all the main mineral-producing provinces in Canada,” the QMA stated.

QMA president/CEO Josée Méthot added, “The damage caused to the Quebec economy could be far greater than the benefits derived from an increase in royalties.”

But in Saskatchewan …

One provincial government has actually cut royalties. Saskatchewan’s new system re-evaluates uranium mining costs in a manner that will slash taxes by about $15 million a year, the Saskatoon StarPhoenix reported on Tuesday. Premier Brad Wall discussed the revamped royalties at the offices of Cameco Corp TSX:CCO, where he joined federal politicians to announce a uranium trade deal with India. Canada had banned uranium exports to the country in 1974, after it used a Canadian-made reactor to create plutonium for a nuclear bomb.

Following a recent and similar deal with China, the India agreement “will mean literally billions of dollars worth of sales of Saskatchewan uranium into these two markets,” the StarPhoenix quoted Wall.

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Week in review

December 21st, 2012

A mining and exploration retrospect for December 15 to 21, 2012

by Greg Klein

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Algorithmic short-sellers could drive juniors to ASX

“The world’s number one stock exchange for mining companies”—that’s the consensus about Toronto, even from companies with operations and headquarters in other countries. But John Kaiser fears TSXV traders will drive juniors to the Australian Securities Exchange. In a Business News Network interview posted by Equedia on Sunday, the editor of Kaiser Research Online explained why.

Monitoring systems now in use can immediately spot significant buying, allowing traders to “intercept the capital that’s flowing in from real investors who are betting on fundamental outcomes, and they sell into this. Then, when that inflow is exhausted, they can simply lean into the order book and continue selling stock that they don’t have, selling short on a down-tick, creating a cascade of buyer’s regret and discouraging the longs, and actually facilitating being able to cover by the end of the day. So their intent to deliver the borrowed stock never has to be materialized. This sort of culture now lurks on top of a system where trading value has been in steep decline since April and May of last year.”

A mining and exploration retrospect for December 15 to 21, 2012

That’s especially troubling, he emphasized, because he believes the sector is moving back to a “discovery/exploration cycle” as prevailed during the 1980s and ’90s, “after a decade of resource feasibility demonstration.” Early-stage exploration companies are especially vulnerable, he said.

But Down Under has its downside too. “I don’t like the Australian stock exchange system because they don’t have a proper reporting system on a scale of technical detail that we in Canada have,” Kaiser added. “I think the Canadian system is fabulous for the entire resource exploration and development cycle. And I think it’s a shame that they allow this type of algorithmic hook-up that basically victimizes real speculators, as opposed to those simply trying to harvest the volatility that they’re literally manufacturing in this sector.”

Credit-card-sized gold bars as a crisis currency

A new product might make physical gold a more practical response to economic fears, according to a Friday Reuters story. The size of a credit card, the CombiBar is made up of 50 one-gram gold squares that can be broken off to use as currency. It’s selling well in Switzerland, Austria and especially Germany, where memories linger of post-WWI hyperinflation. The CombiBar is produced by the Swiss refinery Valcambi, which wants to introduce it to the American and Indian markets next year, while producing platinum and palladium CombiBars for Japan. Valcambi, by the way, is owned 60.6% by Newmont Mining TSX:NMC.

European demand “is rising every week,” Reuters quoted Andreas Habluetzel, head of the Swiss gold trading company Degussa. “Particularly in Germany, people buying gold fear that the euro will break apart or that banks will run into problems.”

Another company, Ex Oriente Lux, has sold 21 million euros of gold through its 17 vending machines in the United States, Europe and United Arab Emirates, Reuters added. “Sales rise according to the temperature of the crisis,” CEO Thomas Geissler told the news agency.

Former Solid Gold CEO accuses natives of slander

Darryl Stretch, the former CEO of Solid Gold Resources TSXV:SLD, has accused two native chiefs of “slanderous and defamatory remarks,” the Sudbury Star and Timmins Daily Press reported this week. He’s demanding public apologies from Wahgoshig chief Dave Babin and Nishnawbe Aski chief Harvey Yesno, who called him a “racist” at a Sudbury press conference in November, the Daily Press stated on Wednesday.

Stretch’s letter to the chiefs warned, “In the event that you do not respond to this notice I will take whatever action is available to me.”

Monday’s Star said Babin has no plans to respond and Yesno couldn’t be reached for comment.

Solid Gold replaced Stretch on December 3 after ongoing controversy between the outspoken CEO and native bands.

Rhodes redux in Zimbabwe

Zimbabwe’s policy of “indigenisation and empowerment” requires foreign miners to divest 51% of their operations to Zimbabwean companies and community groups, as these examples show. Monday’s Harare Herald quoted Defence Minister Emmerson Mnangagwa explaining that the country was willing to work with foreign companies as long as Zimbabweans were the major beneficiaries.

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Week in review

December 7th, 2012

A mining and exploration retrospect for December 1 to 7, 2012

by Greg Klein

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Lawyer wants to cross-examine Bre-X wives

A lawyer representing Alberta investors wants to know what happened to $95 million that two families received from the Bre-X fraud. The multi-billion-dollar mining scam hit the fan in 1997 and the company filed for bankruptcy in 2002. On Tuesday class-action lawyer Clint Docken told media he wants to cross-examine Ingrid Felderhof, ex-wife of Bre-X chief geologist John Felderhof, and Jeannette Walsh, widow of founder David Walsh, about affidavits the women made concerning their financial situation.

According to Tuesday’s Calgary Sun, Docken told court that the company founder received $25 million from investors while the chief geologist got $70 million. Ingrid Felderhof lives in the Cayman Islands. Jeannette Walsh lives in the Bahamas.

A mining and exploration retrospect

Docken told the Calgary Herald he also wants an appraisal of a Cayman Islands mansion the Felderhofs bought 15 years ago for $3 million.

“It’s important to know what it’s worth now,” the Herald quoted him. “That’s an asset that should be taken into consideration. If this claim is successful, she may have to sell it.”

Lawyers representing bankruptcy trustees Deloitte & Touche want the suit dismissed, saying there’s no money left. The Calgary Court of Queen’s Bench adjourned the case to May 30. The Herald also stated that Ontario has a parallel class-action suit underway.

Darryl Stretch’s downfall

Solid Gold Resources TSXV:SLD announced on Monday that it replaced outspoken CEO Darryl Stretch. According to a company statement, the BOD appointed director/chief financial officer Alan Myers interim CEO.

Stretch courted controversy several times after coming into conflict with the Wahgoshig native band and the Ontario government. He said the Wahgoshig wanted him to fund a $100,000 archeological study prior to drilling claims near Lake Abitibi in northeastern Ontario. Saying the company couldn’t afford it, he told the Globe and Mail last March, “It’s not my obligation to go find arrowheads for those people, period…. If they don’t like you, you don’t work.” That outburst followed a January court injunction ordering him to suspend drilling and consult with the Wahgoshig band. The company filed for leave to appeal, arguing that consultation wasn’t a legal obligation.

The Wahgoshig, in turn, filed a claim in February against the province and Solid Gold. According to a company statement, “the claim states that ‘the mining act does not establish any requirement on the Crown or the holder of a prospectors licence to consult or accommodate aboriginal communities’ therefore the act ‘is unconstitutional and of no force and effect.’”

According to an August Solid Gold statement, “While the company was restricted from operating in the area, the [Wahgoshig First Nation] used information obtained from Solid Gold during the consultation process to stake mineral claims over an area approximately six kilometres long and 500 metres wide, bordering the Solid Gold property.”

By September, a judge granted Solid Gold leave to appeal the court-imposed drilling suspension. The judge, according to a company statement, wrote that he saw “no basis in the facts of this case for an imposition of a duty to consult on Solid Gold. If the Crown wishes to delegate operational aspects of its duty it must establish a legislative or regulatory scheme. The mining act does not presently contain such a scheme.”

Such a scheme was already underway. Under new rules to take full effect April 1, the province will require companies to consult native bands prior to early-stage exploration drilling on Crown land. The bands will have 30 days to express concerns, which could then block a permit.

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