Friday 17th November 2017

Resource Clips


Posts tagged ‘Teck Resources Ltd (TECK.B)’

Paved with mineralization

October 27th, 2017

Norman B. Keevil’s memoir retraces Teck’s—and his own—rocky road to success

by Greg Klein

Norman B. Keevil’s memoir retraces Teck’s—and his own—rocky road to success

Profitable right from the beginning, Teck’s Elkview mine “would become
the key chip in the consolidation of the Canadian steelmaking coal industry.”
(Photo: Teck Resources)

 

“We were all young and relatively inexperienced in such matters in those days.”

He was referring to copper futures, a peril then unfamiliar to him. But the remark’s a bit rich for someone who was, at the time he’s writing about, 43 years old and president/CEO of a company that opened four mines in the previous six years. Still, the comment helps relate how Norman B. Keevil enjoyed the opportune experience of maturing professionally along with a company that grew into Canada’s largest diversified miner. Now chairperson of Teck Resources, he’s penned a memoir/corporate history/fly-on-the-wall account that’s a valuable contribution to Canadian business history, not to mention the country’s rich mining lore.

Norman B. Keevil’s memoir retraces Teck’s—and his own—road to success

Norman B. Keevil
(Photo: Teck Resources)

Never Rest on Your Ores: Building a Mining Company, One Stone at a Time follows the progress of a group of people determined to avoid getting mined out or taken out. In addition to geoscientific, engineering and financial expertise, luck accompanies them (much of the time, anyway), as does acumen (again, much of the time anyway).

Teck gains its first foothold as a predecessor company headed by Keevil’s father, Norman Bell Keevil, drills Temagami, a project that came up barren for Anaconda. The new guys hit 28% copper over 17.7 metres. Further drilling leads to the three-sentence feasibility study:

Dr. Keevil: What shall we do about Temagami?

Joe Frantz: Let’s put it into production.

Bill Bergey: Sounds good to me.

They schedule production for two and a half months later.

A few other stories relate a crucial 10 seconds in the Teck-Hughes acquisition, the accidental foray into Saskatchewan oil, the Toronto establishment snubbing Afton because of its VSE listing, an underhanded ultimatum from the British Columbia government, getting out of the oyster business and winning an unheard-of 130% financing for Hemlo.

Readers learn how Murray Pezim out-hustled Robert Friedland. But when it came to Voisey’s, Friedland would play Inco and Falconbridge “as though he were using a Stradivarius.” Keevil describes one guy welching on a deal with the (apparently for him) unarguable excuse that it was only a “gentleman’s agreement.”

Norman B. Keevil’s memoir retraces Teck’s—and his own—rocky road to success

Through it all, Teck gets projects by discovery or acquisition and puts them into production. Crucial to this success was the Teck team, with several people getting honourable mention. The author’s closest accomplice was the late Robert Hallbauer, the former Craigmont pit supervisor whose team “would go on to build more new mines in a shorter time than anyone else had in Canadian history.” Deal-making virtuoso David Thompson also gets frequent mention, with one performance attributed to his “arsenal of patience, knowledge of the opponents, more knowledge of the business than some of them had, and a tad of divide and conquer…”

Partnerships span the spectrum between blessing and curse. International Telephone and Telegraph backs Teck’s first foray into Chile but frustrates its ability to do traditional mining deals. The Elk Valley Coal Partnership puts Teck, a company that reinvests revenue into growth, at odds with the dividend-hungry Ontario Teachers’ Pension Plan. Working with a Cominco subsidiary, Keevil finds the small-cap explorer compromised by the “ephemeral response of the junior stock market.” And smelters rip off miners. But that doesn’t mean a smelter can’t become a valued partner.

Keevil argues the case for an almost cartel-like level of co-operation among miners. Co-ordinated decisions could avoid surplus production, he maintains. Teck’s consolidation of Canada’s major coal mines helped the industry stand up to Japanese steelmakers, who had united to take advantage of disorganized Canadian suppliers. “Anti-trust laws may be antediluvian,” he states.

Keevil admits some regrets, like missing Golden Giant and a Kazakhstan gold project now valued at $2 billion. The 2008 crash forced Teck to give up Cobre Panama, now “expected to be a US$6 billion copper mine.” Teck settled a coal partnership impasse by buying out the Ontario Teachers’ share for $12 billion. Two months later the 2008 crisis struck. Over two years Teck plunged from $3.6 billion in net cash to $12 billion in net debt.

But he wonders if his own biggest mistake was paying far too much for the remaining 50% of Cominco when an outright purchase might not have been necessary. Keevil attributes the initial 50%, on the other hand, to a miracle of deal-making.

For the most part Keevil ends his account in 2005, when he relinquishes the top job to Don Lindsay. By that time the company had 11 operating mines and a smelting/refining facility at Trail. A short chapter on the following 10 years, among the most volatile since the early ’70s, credits Teck with “a classic recovery story which deserves a full chapter in the next edition of Never Rest on Your Ores.” Such a sequel might come in another 10 years, he suggests.

Let’s hope he writes it, although it’ll be a different kind of book. As chairperson he won’t be as closely involved in the person-to-person, deal-to-deal, mine-to-mine developments that comprise the greatest strength of this book—that and the fact that the author grew with the company as it became Canada’s largest diversified miner.

Meanwhile, maybe Lindsay’s been keeping a diary.

The author’s proceeds go to two organizations that promote mining awareness, MineralsEd and Mining Matters.

Teck Resources’ Norman B. Keevil recalls the negotiation style of a 1970s British Columbia cabinet minister

October 25th, 2017

…Read more

Norman B. Keevil book reveals tactics of 1970s B.C. flirtation with resource nationalism

September 29th, 2017

by Greg Klein | September 29, 2017

The year was 1973. No sooner had Teck Resources transplanted its HQ to Vancouver than British Columbia premier W.A.C. Bennett’s 20-year reign fell to defeat at NDP hands. Resource nationalism proved to be one of new premier Dave Barrett’s earliest enthusiasms. But the guy who bragged about his commitment to doing “what was needed and right” showed a peculiar modus operandi.

That’s just one of the stories related by Norman B. Keevil in a history of Teck to be released next week, Never Rest on Your Ores: Building a Mining Company, One Stone at a Time.

Norman B Keevil book reveals tactics of 1970s B.C. flirtation with resource nationalism

Norman B. Keevil
(Photo: Teck)

Keevil relates that on summoning him and Bob Hallbauer into the premier’s Victoria office, Barrett’s first words were, “I want your coal.”

Interest had been growing in northeastern B.C.’s deposits, among them Teck’s Sukunka. “Well, at least he did call it our coal,” Keevil notes. “That would become questionable as the situation evolved.”

The duo declined but Barrett wouldn’t give up. He kept calling them back to Victoria on an almost weekly basis.

At about the seventh such meeting, a very strange thing happened. Barrett had a curtain angled across a corner in his office. We’d never paid much attention to it, but in that seventh meeting the curtain rustled a bit, and a thin, sepulchral, white-haired professorial type jumped out from behind it. It was almost as though he was wearing a superhero cape, or super-villain. I think Dave must have gotten him out of Marvel Comics. Was there a door to another room behind the curtain, or had this strange figure just been hiding behind it, taking it all in? I never did find out.

It turned out this was the patrician Alex Macdonald, Barrett’s attorney general and the upholder of law and order—the NDP way. The honourable gentleman said to us: ‘I want you to understand just one thing. I guarantee that you will never be able to put that coal property into production. All you have is an exploration licence and, if you don’t sell to us right now, I’ll cancel it tomorrow.’

Calling it an “unseemly ultimatum from the upholder of justice,” Keevil states the company reluctantly agreed on a $20-million sale that would close in June, a few months away.

But when June arrived, the government announced it had “dropped its option,” writes Keevil—who insists that it wasn’t an option but a firm deal.

Musing over the new government’s equivocation, Keevil wonders if it just came down to money: “Certainly they had been spending like drunken sailors on redecorating some of the higher-profile, cabinet ministers’ offices.

“As to Alex Macdonald, a quote of his survives all of this: ‘In politics, your opponents are on the other side of the legislature, but your enemies are all around you.’ With him, I’m not too surprised.”

Viewing that vignette in a wider context, Keevil sees much of the mining world as chaotic for much of the 1970s and early ’80s, whether it was in B.C., Panama, Chile, El Salvador or Saskatchewan. Compounding the mess were peripheral problems ranging from the OPEC oil embargo to Trudeauvian taxes.

But as for Sukunka, it never did go into production. Teck lost interest and, with intercession from pre-prime ministerial Jean Chretien, unloaded it on BP, which eventually abandoned the project.

Yet the BP deal let Teck retain 100% of the adjacent Bullmoose project. Partly thanks to new infrastructure from a new B.C. government, Bullmoose became Teck’s first coal mine. Now Canada’s largest diversified resource company is also the world’s second-largest supplier of seaborne steelmaking coal.

Read more about Never Rest on Your Ores.

PwC numbers support B.C. mining’s resurgent mood

May 17th, 2017

by Greg Klein | May 17, 2017

Not just shareholders but governments, employees and communities all benefit from the upturn in mining, according to British Columbia data. PricewaterhouseCoopers’ annual report on B.C. mining credits the industry’s “cautiously optimistic” mood on stabilized or improving commodity prices, continuing progress on development projects and new mines to come. The survey gleaned its findings from 28 companies whose main assets comprise 14 operating mines, one on care and maintenance, three exploration projects, nine projects undergoing permitting or environmental assessment and a smelter.

Year-over-year numbers help explain the optimism.

The participating companies drew gross mining revenue of $8.7 billion last year, compared with $7.7 billion in 2015, “driven by higher revenue at Teck’s [TSX:TECK.A and TSX:TECK.B] B.C. coal mines as well as Imperial Metals’ [TSX:III] Red Chris and Mount Polley operations.”

Net mining revenue for the participants totalled $7.3 billion, compared with $6.3 billion in 2015, “driven by an increase in gross mining revenue and a decrease in smelting and refining charges and freight costs.” Cash flow from operations rose to $2.6 billion in 2016 from $1.7 billion the previous year.

Participants’ exploration and development spending, however, fell from $320 million in 2015 to $102 million last year. But PwC attributed the decrease largely to Pretium Resources’ (TSX:PVG) Brucejack graduating from exploration and evaluation into construction, helping push 2016 capex for the 28 companies up to $1.37 billion, compared with $1.24 billion in 2015.

And those companies’ shareholders reaped rising returns—13.5% last year, compared with 6.3% in 2015 and 2.4% in 2014. With the 2016 figure slightly above 2013 results, “the hope is that it will continue to climb towards 2012 levels as we move into 2017.”

Governments did alright too, getting total payments of $650 million from the participants last year, up from $476 million in 2015. Last year saw the participants’ highest such payments since 2011.

Direct employment rose slightly to 9,329 jobs, compared with 9,221 in 2015.

Of all those numbers, of course, job figures have the most obvious impact on people and their communities. Even PwC’s beancounters appear moved by the intangible effects of the Tumbler Ridge coal mining revival. The inspirational story began last autumn when Conuma Coal Resources rescued some B.C. assets of bankrupt Walter Energy and reopened the Brule mine.

An “extreme and effective collaboration” of industry, government and First Nations helped Conuma put Brule back in operation quickly, Karina Briño told PwC. Briño, who stepped down as B.C. Mining Association president/CEO on April 30 to take on a mining role in her native Chile, added, “Mining really is a community-based activity that is not only valued but appreciated by the community.”

Conuma CEO Mark Bartkoski echoed those comments. “We felt really good about the properties and the spirit of the people in the community. It has truly been a testament to positive collaboration.”

Looking at the B.C. industry overall, PwC concluded, “While it may be too soon to call it a recovery, the outlook is brighter today than it has been in recent years…. While several challenges remain—including the volatility of commodity prices, keeping costs down, and attracting more investment in the short and long term—the future looks promising.”

Download Building for the Future: The Mining Industry in British Columbia 2016.

Opinions vary by region when it comes to mineral exploration and mine development

April 20th, 2017

With a provincial election weeks away, Peter Caulfield asked sources in three British Columbia regions to comment on the importance of mining for the Association for Mineral Exploration’s quarterly magazine, Mineral Exploration. In general terms, the responses differ from views commonly heard in cities geographically removed but hardly independent of resource economies and the commodities they produce. In that respect, the relevance of Caulfield’s article applies far beyond B.C. The article is posted here with the permission of AME.

 

Opinions vary by region when it comes to mineral exploration and mine development

by Peter Caulfield

In a province that is as large and diverse as British Columbia, it’s natural that opinions on most topics—including mineral exploration and development—will be diverse too.

What the average person in Oak Bay or Yaletown thinks about a new mine or pipeline will be very different from what’s going through the head of somebody who lives in the northwestern corner of British Columbia or in the Kootenays in southeastern B.C.

As the province’s May 9 election approaches, Mineral Exploration wanted to know what’s on the mind of voters who live in the parts of the province that are most dependent on resource development. We talked to three well-connected observers of local politics in four provincial constituencies: Kamloops-North Thompson and Kamloops-South Thompson, Stikine and Kootenay East. We asked each of them what the hot-button issues are in their respective constituencies and whether mineral exploration and mine development is important to their fellow voters.

The following interviews have been condensed and edited for clarity.

 

Stikine

Maria Ryder, District of Stewart councillor for 2.5 years, chief of the volunteer fire department and 25-year Stewart resident

Opinions vary by region when it comes to mineral exploration and mine development

(Photo: Carl Ryan/AME)

The main projects in the Stewart region are Brucejack (Pretium Resources TSX:PVG), the Premier mine (Ascot Resources TSXV:AOT), Red Mountain (IDM Mining TSXV:IDM) and the Red Chris mine (Imperial Metals TSX:III).

Along with Terrace and Kitimat, Stewart is one of the largest communities in the district. We are growing in population, especially in the summer, when workers and their families descend on the town, drawn by mineral exploration and hydro projects and by Stewart’s two ports.

It’s very different here from urban British Columbia, and the people from down south who come up here to work find out just how different it is. And some of them discover how different some of our opinions and concerns are from theirs.

Because we get a lot of snow in the winter, much of the employment in Stewart is seasonal and the people who live here adjust their lives accordingly. Every year between March and November we’re busy, and between November and March things are pretty slow. But we’re used to it and we adjust.

The main election issue here is sustainable job creation through industrial development. We want jobs that stay and that provide stability to Stewart.

 

Kootenay East

Lois Halko, District of Sparwood second-term councillor and former mayor, born and raised in Sparwood

Opinions vary by region when it comes to mineral exploration and mine development

(Photo: Malcom Lennox/AME)

The main economic drivers of the region are the mining of metallurgical coal, which is B.C.’s single biggest export, and the activities of the local suppliers to the coal industry.

There are five Teck [Teck Resources TSX:TECK.A and TSX:TECK.B] metallurgical coal mines in the region: Coal Mountain, Elkview, Fording River, Greenhills and Line Creek. In addition, there are four mining companies that are interested in developing mines in the Elk Valley area: CanAus Coal, Centermount Coal, NWP Coal Canada and Riversdale Resources.

The five Teck mines have a total of 3,600 full-time employees, of whom 2,400 live in four communities in the Elk Valley area.

Because it is used to make steel, and because steel is such an essential product in everyone’s life, metallurgical coal should be recognized as a critical resource. It’s certainly critical to the people who live in Sparwood.

Teck has earned its social licence to continue mining here. The public has accepted the company’s efforts to mitigate any of the effects of coal mining, such as contaminants leaching into the water supply. Teck has done a lot of work to reduce the problem.

At the same time, we know that we need to diversify our economy. It’s something the local municipalities talk about a lot. The Sparwood regional economy is one of the least diversified in the province, which has made us very vulnerable to a cycle of boom and bust. The region has lots more to offer than just coal deposits, and we’re trying to leverage our mountains and natural beauty to build a thriving tourist industry.

 

Kamloops-North Thompson and Kamloops-South Thompson

Ryan Scorgie, president of the Kamloops Chamber of Commerce

The Kamloops Chamber of Commerce and its 850 members take a great deal of interest in all kinds of resource development, including mineral development in Kamloops-North Thompson and Kamloops-South Thompson.

The main mineral projects in the area are the Ajax project (KGHM International), the New Afton mine (New Gold TSX:NGD) and Highland Valley Copper (Teck).

Opinions about resource development are mixed in Kamloops. Most of the working people here are for it, but many of the academics at Thompson Rivers University are against, so the Chamber of Commerce hears both sides of the argument. Our position is that if a project goes through the appropriate review process and passes it, then we support it.

In fact, the Chamber thinks process is so important that our Policy Development Committee developed a policy regarding resource development in 2016 called Supporting Canada’s Responsible Resource Development.

The policy statement is more important than its brevity might indicate, because it was adopted provincially just a few months after it was written.

Opinions vary by region when it comes to mineral exploration and mine development

(Photo: Neil Leonard/AME)

The committee writes, in part: “The Chamber believes that it is critical that B.C. maintains its reputation as a jurisdiction open to investment. Achieving the investments needed to ensure Canada’s competitiveness will require an efficient regulatory review process that ensures continued health and environmental protection of Canadians while generating jobs, economic growth and prosperity.

“A streamlined process will encourage investment by providing businesses with a clear and predictable process to protect the environment while making the best use of limited government resources.

“Inefficient and unpredictable processes may turn away potential investors and prevent businesses from being able to make informed location and logistic decisions. For example, the World Economic Forum has cited inefficient government bureaucracy as one of the biggest impediments to improving Canada’s economic competitiveness.

“We need to make sure that the regulatory review process is efficient and has a clear scope, reasonable timelines and the flexibility to address unforeseen circumstances.”

Originally published in the spring 2017 edition of Mineral Exploration. Posted here with the permission of the Association for Mineral Exploration.

Visual Capitalist: How precious metals streaming works

September 12th, 2016

by Jeff Desjardins | posted with permission of Visual Capitalist | September 12, 2016

Miners seeking new capital have always had a variety of options: They could issue new shares, take out a loan, enter into joint-venture agreements or divest non-core assets.

However, in the last decade, a new option has emerged called “precious metals streaming”—in which streaming companies essentially offer capital up front to mining companies in exchange for metal later. If properly executed, the result is a win for both parties that can ultimately provide value to investors.

Precious metals streaming

This infographic from Silver Wheaton TSX:SLW explains the precious metals streaming model and the arbitrage opportunity that creates value for both the streamer and the miner seeking to acquire capital:

How precious metals streaming works

 

The aforementioned arbitrage opportunity in precious metals streaming is key.

For a traditional base metal miner, the majority of forecasted mine revenue may come from a metal like copper or nickel. However, along with those “target” metals, smaller amounts of gold and silver may be produced from the deposit as well.

Investors would still value those byproduct precious metals in a base metal miner’s portfolio, but the metals may be typically valued at an even higher multiple in a precious metal streamer’s portfolio. This allows the base metal miner to transfer these future “streams” to the streamer in exchange for up-front capital, which can be a win-win scenario for both parties.

Streaming benefits

In other words, miners use streaming to acquire non-dilutive financing and to extract value from non-core assets. This allows them to deploy capital on purposes more central to their strategy. Major miners such as Teck Resources TSX:TCK.A and TCK.B, Barrick Gold TSX:ABX, Vale NYSE:VALE and Glencore all sold streams in 2015.

Meanwhile, streaming companies have been very successful since this model was first pioneered 12 years ago. They are getting gold and silver at a discount, and this has created significant value for investors over the last decade. Today there are many valuable streaming companies out there, including the major ones such as Silver Wheaton, Royal Gold and Franco-Nevada TSX:FNV.

Posted with permission of Visual Capitalist.

Strongbow Exploration wants to revive Cornwall’s last tin mine

March 17th, 2016

by Greg Klein | March 17, 2016

Four millennia of mining have yet to exhaust this region’s potential, Strongbow Exploration TSXV:SBW believes. On March 17 the company announced an agreement to acquire Cornwall’s South Crofty tin project, a past-producer dating to the 16th century.

The mine had already begun production by 1592, Wikipedia states, reaching large-scale production in the mid-17th century and continuing operations until 1998. According to another Wikipedia post, its closure marked the end of Cornish mining, which began circa 2150 BC.

Strongbow Exploration wants to revive Cornwall’s last tin mine

By 2012, extensions to South Crofty covered 34 earlier mines.

Some historians have attributed Rome’s AD 43 invasion of Britain to the empire’s lust for tin.

Declining metal prices during the late 19th century shut down many Cornish operations, coinciding with the Great Migration of 1815 to 1915, when the county lost 250,000 to 500,000 people, according to the Cornish Mining World Heritage Site. The region’s miners, known as Cousin Jacks, brought their skills and technology to at least 175 locations across six continents, the organization adds.

Strongbow’s grasp of history seems a tad confused, though. At one point its press release says Cornwall’s tin mining history lasted over 400 years. Later, the communiqué says mining took place “since at least 2300 BC.” Nevertheless president/CEO Richard Williams said South Crofty “represents one of the best tin opportunities currently available globally.”

Other companies have tried to revive the mine, Strongbow acknowledges. The project comes with a mining permit valid until 2071, “subject to certain planning conditions being met.”

The company plans to evaluate tin mineralization occurring about 400 metres below surface and expects to release a resource estimate within two weeks.

The deal would have Strongbow make a series of payments and share issues to Galena Special Situations Fund, the creditor of the companies holding rights to South Crofty, as well as payments to Tin Shield Production, which would forego its option to acquire the project.

Last July Strongbow picked up two tin projects in Alaska, Sleitat and Coal Creek. Earlier this month the company closed its purchase from Teck Resources TSX:TCK.A and TCK.B of two royalties on the Mactung and Cantung projects formerly of North American Tungsten TSXV:NTC, which is now under creditor protection.

MOU offers Americans scrutiny over B.C. mining projects

November 25th, 2015

by Greg Klein | November 25, 2015

British Columbians and Alaskans will seek involvement in each other’s mining proposals following a memorandum of understanding signed November 25. The MOU calls for governments and natives to take part in environmental assessment and permitting processes in their neighbour’s jurisdiction. But with an emphasis on trans-boundary waters, which mostly would consist of rivers and streams originating in B.C., Canadian projects might get more scrutiny than those next door.

B.C.-Alaska MOU pledges cross-border co-operation on mining and environment

The memo follows visits by B.C. mines minister Bill Bennett and Alaska lieutenant-governor Byron Mallott to each other’s turf. Bennett’s trips, following the tailings dam collapse at Imperial Metals’ (TSX:III) Mount Polley mine, tried to reassure Alaskans about B.C. environmental practices.

In August 2014, just weeks after the disaster, Alaska’s Department of Natural Resources asked Canada’s Environmental Assessment Agency for participation in the approval process for Seabridge Gold’s (TSX:SEA) KSM gold-copper project near the state border. Provincial approval had already been granted the previous month. The federal permit came through last December.

Other prominent projects in B.C.’s northwestern corner include:

  • Galore Creek, a NovaGold Resources TSX:NG/Teck Resources TSX:TCK.A and TCK.B copper-gold-silver project that reached pre-feasibility in 2011

  • Schaft Creek, a Copper Fox Metals TSXV:CUU/Teck copper-gold-molybdenum-silver project that achieved feasibility in 2013

  • Chieftain Metals’ (TSXV:CFB) Tulsequah Chief zinc-copper-gold project, now permitted for construction

  • Pretium Resources’ (TSX:PVG) Brucejack gold-silver project, slated for 2017 commercial production

  • Imperial’s Red Chris copper mine, which achieved commercial production in July

The MOU sets no timeframe for achieving its goals. Money for the cross-border initiative would come from existing government budgets, with the possibility of additional “alternate public or private sector funding.”

Study enumerates coal’s benefits to B.C.

November 16th, 2015

by Greg Klein | November 16, 2015

Coal might be perceived as a dirty 19th century throwback but it’s hard to imagine life without steel. For British Columbians, it might be hard to imagine life without the province’s traditional industries. To underscore that point, Resource Works released a study on the economic benefits of five B.C. metallurgical coal mines operated by Teck Resources TSX:TCK.A and TCK.B.

Coal still fuels B.C. economy, report finds

Among the findings, the five mines supported 3,993 jobs in 2014 with a payroll totalling $457.6 million. Teck spent another $1.02 billion on goods and services for the quintet in 2014. Also attributed to the mines that year from a “small sample” of six suppliers were 345 jobs with a payroll totalling $34.5 million. With about 1,400 suppliers in B.C. and Alberta, “it is reasonable to deduce that the actual full benefits are much larger,” wrote author Marlyn Chisholm.

Her study didn’t consider taxes and royalties.

Although the five mines are concentrated in southeastern B.C.’s Elk Valley, the spinoffs spread widely. Nearly 60% of goods and services spending went to the Vancouver region, largely to shippers and suppliers.

Even during the downturn, B.C.’s “two largest revenue-generating commodities” are metallurgical coal and copper, according to a May report from PwC. Teck’s five B.C. coal operations soldier on but, to help cut Q3 production by 19%, each of them underwent three-week suspensions this year.

In last month’s Q3 results, Teck reported an average price of $88 per tonne, 20% lower than the same period in 2014, “reflecting oversupplied steelmaking coal market conditions and a decline in spot price assessments.” Prices reached as high as $300 a tonne in 2011. The company’s long-term assumptions foresee $130 per tonne.

Of $2.2 billion in impairments reported last quarter, Teck attributed an after-tax $1.45 billion to its steelmaking coal assets, which include the Cardinal River mine in Alberta. Another $300 million in after-tax impairments went to copper and $400 million to the company’s Fort Hills oilsands project.

Teck is Canada’s largest diversified miner and the world’s second-largest exporter of seaborne steelmaking coal, which accounted for 32% of the company’s business in 2014.

While Anglo American and Walter Energy have shut down their B.C. coal operations, HD Mining International won provincial environmental approval last month for its proposed Murray River metallurgical coal mine in northeastern B.C. The company, owned by Mandarin-speaking Chinese, intends to staff underground jobs with Mandarin-speaking Chinese.

Resource Works is a non-profit society that encourages “respectful, fact-based dialogue on responsible resource development” in B.C. A positive case for B.C.’s coal industry has also been presented by a coalition of B.C. miners, suppliers and unions.

Download the Resource Works study.

Read more about Resource Works here and here.

Update: On November 18 Teck announced the Q4 2017 closure of Coal Mountain, one of the company’s five Elk Valley mines, and the suspension of Coal Mountain Phase 2, which had been intended to extend the operation. “Teck will identify options between now and the end of 2017 to potentially replace the 2.25 million tonnes of annual coal production that were planned from CMO Phase 2 by optimizing production from its five other steelmaking coal mines,” the company stated.

The Coal Mountain decision came amid plans for 2016 spending cuts of $650 million and the elimination of 1,000 jobs globally.

Back on the autobahn

November 2nd, 2015

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

by Greg Klein

Next Page 1 | 2

Overseas investors once again get to meet Canadian juniors in person, as prospect generator Zimtu Capital TSXV:ZC and 11 of its holdings visit four European cities from November 5 to 11. Now in the event’s fifth year, company reps will hold conferences in Munich, Geneva, Zurich and Frankfurt to largely institutional audiences, demonstrating the wide-ranging interest in exploration opportunities.

“Essentially it’s a commitment by Zimtu and all the participating companies to keep the European investor informed about what the companies are doing, to meet the management and form a relationship with the guys who are going to be making the decisions, effectively spending their money,” says Zimtu president Dave Hodge.

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

The Zimtu bus arrives as crowds enter
Munich’s Edelmetallmesse in 2014.

“Many of the investors who are still interested in the sector had made great money in the past and experienced tremendous upside in some stocks. Certainly the Canadian junior market is very unique globally and provides that opportunity for the European investor to speculate on discovery.”

Describing himself as a “grizzled veteran of the Zimtu bus,” Chris Berry acts as MC, moderator and keynote speaker. The president of House Mountain Partners and co-editor of the Disruptive Discoveries Journal says, “I like to go back and get a sense of what institutional investors in those cities are thinking about, not just about commodity markets but central bank policies and the macro economy.”

His talk will briefly review the perspectives he offered last year then “challenge the audience” with four questions to consider in 2016. “It’s really more of a discussion than a lecture and I hope there’s a lot of pushback and debate. That gets people thinking and hopefully planning for better times next year.”

While the downturn’s all too obvious, several Zimtu holdings have made impressive strides over the last year. Some of the more remarkable stories include the creation of ALX Uranium TSXV:AL after Lakeland Resources and Alpha Exploration won overwhelming shareholder approval to combine their companies. The result is a distinguished team overseeing one of the Athabasca Basin’s largest and most prospective portfolios.

Competing for flagship status are a number of drill-ready projects including Kelic Lake, where a rig’s currently at work. Gibbon’s Creek has a ground gravity survey underway to follow up on last winter’s 2,550-metre program on a property hosting some of the Basin’s highest radon levels. The company’s Carter Lake and Hook Lake properties feature around 15 kilometres of untested corridors on strike with the Patterson Lake South, Arrow and Spitfire discoveries. Other drill-ready projects include Newnham Lake and Lazy Edward Bay, a 60% stake in the Carpenter Lake joint venture and an 80% share of the Gorilla JV.

Well financed for additional campaigns, the ALX team has been poring over property data to further establish priorities.

Twelve Zimtu Capital companies bring their exploration opportunities to Europe

Commerce Resources addresses last year’s Munich conference.

Focusing on a rare earths project with relatively simple mineralogy, Commerce Resources TSXV:CCE continues to make progress with drilling, metallurgy and community engagement as its Ashram deposit in northern Quebec moves towards pre-feasibility. Last month the company increased rare earth elements recovery from 71% to 76% at a high grade of 42% total rare earth oxides, while also simplifying the plant’s flowsheet. The most impressive concentrates so far have graded 48.9% TREO at 63% recovery and 45.7% TREO at 71% recovery.

Following high-grade, near surface assays from the winter/spring drill program, Commerce has a summer/fall campaign targeting around 32 holes for 3,000 metres. A new infrastructure model indicates cost-cutting potential. The company’s commitment to social responsibility won an award from l’Association de l’exploration minière du Québec.

In British Columbia, Commerce’s Blue River tantalum-niobium project achieved its preliminary economic assessment in 2011.

Recognizing that the great nickel deposits of Sudbury, Norilsk, Thompson and Raglan occur in clusters, Equitas Resources TSXV:EQT acquired the recently assembled Garland project in Labrador, 30 kilometres from Voisey’s Bay. Then, for the first time, Equitas subjected Garland to modern geophysics. Now a drill program under the supervision of Voisey’s veteran Everett Makela has 12 VTEM anomalies targeted.

With over $3.8 million raised since September, the company continues drilling while awaiting initial assays.

Inspired by China’s allure for the beauty and practical qualities of B.C. jade, Electra Stone TSXV:ELT intends to create a vertically integrated nephrite jade mining, trading and marketing platform. The company began by acquiring properties as well as expertise, and has so far confirmed jade at two of six projects before winter conditions ended exploration.

Eager to make contact with potential buyers, Electra bought and shipped an 18-tonne cargo of jade to Shanghai in September and is now preparing a second shipment. The company also produces chalky geyserite, or aluminum silica, from a Vancouver Island quarry. The product’s U.S. customer collaborated with Electra on a drill program last summer to study the project’s expansion potential.

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