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Who gets a stake in this strategic U.S. asset—the Russian billionaire, the Chinese company or both?

June 16th, 2017

by Greg Klein | June 16, 2017

Efforts to reduce U.S. dependency on Chinese rare earths took an uncertain turn on June 15 as a group representing three American firms and a Chinese REE producer placed the winning bid for Mountain Pass. But the sale of bankrupt Molycorp Minerals’ former California mine, until its 2015 shutdown the only REE operation in the U.S., faces a number of challenges.

Who gets a stake in this strategic U.S. asset—the Russian billionaire, the Chinese company or both?

Mountain Pass: Could one rival bidder get the
mine while another holds the mineral rights?

The US$20.5-million top bid came from MP Mine Operations LLC, which “includes two noteholder groups from Molycorp’s original bankruptcy as well as Chinese investor Shenghe Resources Shareholding Co Ltd,” reported Shenghe Resources Holding is a Chinese company engaged in smelting, deep processing and sales of rare earths and other metals, according to Bloomberg, which notes Shenghe is a subsidiary of the China Geological Survey Institute of Multipurpose Utilization of Mineral Resources.

The bid surpassed a US$20-million stalking horse from ERP Strategic Minerals, part of the U.S.-based ERP Group of companies headed by Tom Clarke. The American billionaire credits his group with “a strong track record of restarting mines acquired out of U.S. bankruptcy and Canadian CCAA situations.” ERP planned to work with Pala Investments, headed by Russian-born billionaire Vladimir Iorich, and ASX-listed Peak Resources for financial, technical and operational support of the Mountain Pass mine and processing facility.

ERP had challenged the rival bid in court, saying the offer could be blocked by the U.S. Committee on Foreign Investment or other regulators, stated. The journal quoted ERP arguing that, without a pre-bid review, “the stalking horse bidder will be prejudiced by having to compete against unfair, non-complying bids, and there is a real risk of a flawed auction and a failed sales process.”

Who gets a stake in this strategic U.S. asset—the Russian billionaire, the Chinese company or both?

Bankrupt Molycorp’s former assets include an REE processing facility.

A judge allowed the auction to proceed, “setting the stage for a sale hearing on June 23,” added. The site previously reported that the hearing was scheduled to consider objections from three federal regulatory agencies that say the former operation’s permits can’t be transferred through the auction.

According to Peak Resources, ERP will file an objection to the auction by June 19 “and may consider other legal remedies” prior to the June 23 hearing.

But members of the winning group already hold the mineral rights, according to the Financial Times. Last month the paper stated the rights are held by MP Mine Operations members JHL Capital Group and QVT Financial, both Molycorp creditors, along with Oaktree Capital. The American firms planned to work with Shenghe, the Chinese REE processor.

Contemplating a successful ERP bid prior to the auction, “Mr. Clarke said his group could still use the mine site to process material from elsewhere if they did not get the mineral rights—but he hoped to negotiate for them if he wins,” the paper added.

Mountain Pass went on care and maintenance in 2015 after Molycorp piled up some US$1.7 billion in debt. That left Lynas Corp’s Mount Weld operation in Western Australia as the world’s only significant source of rare earths outside China, which produces and processes about 90% of global supply.

The U.S. Geological Survey considers rare earths critical to the country’s economy and defence. Under the proposed METALS Act, a bill before U.S. Congress, the federal government would support the development of domestic sources and supply chains for critical minerals including rare earths.

Saskatchewan and Manitoba first and second globally as mining jurisdictions

March 1st, 2017

by Greg Klein | March 1, 2017

Saskatchewan edged one notch upwards to take first place worldwide while Manitoba soared from 19th to second in this year’s Fraser Institute survey of mining and exploration jurisdictions. Those two provinces pushed last year’s top performer, Western Australia, down to third place. Canada’s other top 10 spot went to Quebec, rising to sixth from eighth the year before. All continents but Antarctica came under scrutiny but Canadian, American, Australian and European locales monopolized the top 10.

Farther down the list, the strongest Canadian improvements were Newfoundland and Labrador, climbing to 16th from 25th, and the Northwest Territories, now 21st, previously 35th. Most disappointing were British Columbia (falling to 27th from 18th), Nunavut (31st from 23rd) and Alberta (47th from 34th).

Those findings come from the survey’s Investment Attractiveness Index, which combines two other indices—Policy Perception, a “report card” on government attitudes, and Best Practices Mineral Potential, concerning geological appeal. Representatives of 104 companies responded with their 2016 experiences in mind, giving a numerical rating to questions in several categories regarding their likelihood of investing in a particular jurisdiction. The previous year 109 companies responded.

Here’s the top 10 globally for overall investment attractiveness, with last year’s standings in parentheses:

1 Saskatchewan (2)

2 Manitoba (19)

3 Western Australia (1)

4 Nevada (3)

5 Finland (5)

6 Quebec (8)

7 Arizona (17)

8 Sweden (13)

9 Ireland (4)

10 Queensland (16)

Here are the Canadian runners-up:

15 Yukon (12)

16 Newfoundland and Labrador (25)

18 Ontario (15)

21 Northwest Territories (35)

27 British Columbia (18)

31 Nunavut (23)

40 New Brunswick (45)

47 Alberta (34)

52 Nova Scotia (59)

At least those provinces and territories steered far clear of the bottom 10, where Argentina figures prominently:

95 Mozambique (84)

96 Zimbabwe (98)

97 India (73)

98 Mendoza province, Argentina (101)

99 La Rioja province, Argentina (109)

100 Afghanistan (not available)

101 Chubut province, Argentina (104)

102 Venezuela (108)

103 Neuquen province, Argentina (93)

104 Jujuy province, Argentina (86)

“We believe that the survey captures, at least in broad strokes, the perceptions of those involved in both mining and the regulation of mining in the jurisdictions included in the survey,” stated authors Taylor Jackson and Kenneth P. Green.

Download the Fraser Institute Annual Survey of Mining Companies 2016.

A 2016 retrospect

December 20th, 2016

Was it the comeback year for commodities—or just a tease?

by Greg Klein

Some say optimism was evident early in the year, as the trade shows and investor conferences began. Certainly as 2016 progressed, so did much of the market. Commodities, some of them anyway, picked up. In a lot of cases, so did valuations. The crystal ball of the industry’s predictionariat often seemed to shine a rosier tint. It must have been the first time in years that people actually stopped saying, “I think we’ve hit bottom.”

But it would have been a full-out bull market if every commodity emulated lithium.

By February Benchmark Mineral Intelligence reported the chemical’s greatest-ever price jump as both hydroxide and carbonate surpassed $10,000 a tonne, a 47% increase for the latter’s 2015 average. The Macquarie Group later cautioned that the Big Four of Albermarle NYSE:ALB, FMC Corp NYSE:FMC, SQM NYSE:SQM and Talison Lithium had been mining significantly below capacity and would ramp up production to protect market share.

Was this the comeback year for commodities—or just a tease?

That they did, as new supply was about to come online from sources like Galaxy Resources’ Mount Cattlin mine in Western Australia, which began commissioning in November. The following month Orocobre TSX:ORL announced plans to double output from its Salar de Olaroz project in Argentina. Even Bolivia sent a token 9.3 tonnes to China, suggesting the mining world’s outlaw finally intends to develop its lithium deposits, estimated to be the world’s largest at 22% of global potential.

Disagreeing with naysayers like Macquarie and tracking at least 12 Li-ion megafactories being planned, built or expanded to gigawatt-hour capacity by 2020, Benchmark in December predicted further price increases for 2017.

Obviously there was no keeping the juniors out of this. Whether or not it’s a bubble destined to burst, explorers snapped up prospects, issuing news releases at an almost frantic flow that peaked in mid-summer. Acquisitions and early-stage activity often focused on the western U.S., South America’s Lithium Triangle and several Canadian locations too.

In Quebec’s James Bay region, Whabouchi was subject of a feasibility update released in April. Calling the development project “one of the richest spodumene hard rock lithium deposits in the world, both in volume and grade,” Nemaska Lithium TSX:NMX plans to ship samples from its mine and plant in Q2 2017.

A much more despairing topic was cobalt, considered by some observers to be the energy metal to watch. At press time instability menaced the Democratic Republic of Congo, which produces an estimated 60% of global output. Far overshadowing supply-side concerns, however, was the threat of a humanitarian crisis triggered by president Joseph Kabila’s refusal to step down at the end of his mandate on December 20.

Was this the comeback year for commodities—or just a tease?

But the overall buoyant market mood had a practical basis in base metals, led by zinc. In June prices bounced back from the six-year lows of late last year to become “by far the best-performing LME metal,” according to Reuters. Two months later a UBS spokesperson told the news agency refiners were becoming “panicky.”

Mine closures in the face of increasing demand for galvanized steel and, later in the year, post-U.S. election expectations of massive infrastructure programs, pushed prices 80% above the previous year. They then fell closer to 70%, but remained well within levels unprecedented over the last five years. By mid-December one steelmaker told the Wall Street Journal to expect “a demand explosion.”

Lead lagged, but just for the first half of 2016. Spot prices had sunk to about 74 cents a pound in early June, when the H2 ascension began. Reaching an early December peak of about $1.08, the highest since 2013, the metal then slipped beneath the dollar mark.

Copper lay at or near five-year lows until November, when a Trump-credited surge sent the red metal over 60% higher, to about $2.54 a pound. Some industry observers doubted it would last. But columnist Andy Home dated the rally to October, when the Donald was expected to lose. Home attributed copper’s rise to automated trading: “Think the copper market equivalent of Skynet, the artificial intelligence network that takes over the world in the Terminator films.” While other markets have experienced the same phenomenon, he maintained, it’s probably the first, but not the last time for a base metal.

Was this the comeback year for commodities—or just a tease?

Nickel’s spot price started the year around a piddling $3.70 a pound. But by early December it rose to nearly $5.25. That still compared poorly with 2014 levels well above $9 and almost $10 in 2011. Nickel’s year was characterized by Indonesia’s ban on exports of unprocessed metals and widespread mine suspensions in the Philippines, up to then the world’s biggest supplier of nickel ore.

More controversial for other reasons, Philippine president Rodrigo Duterte began ordering suspensions shortly after his June election. His environmental secretary Regina Lopez then exhorted miners to surpass the world’s highest environmental standards, “better than Canada, better than Australia. We must be better and I know it can be done.”

Uranium continued to present humanity with a dual benefit—a carbon-free fuel for emerging middle classes and a cautionary example for those who would predict the future. Still oblivious to optimistic forecasts, the recalcitrant metal scraped a post-Fukushima low of $18 in December before creeping to $20.25 on the 19th. The stuff fetched around $72 a pound just before the 2011 tsunami and hit $136 in 2007.

The world’s most popular mints: Key facts and comparisons

June 1st, 2016

Story by Jeff Desjardins, Visual Capitalist | Infographic by JM Bullion

In the precious metals industry, trust is paramount. That’s why if you own gold or silver bullion, there is a good chance it comes from one of the world’s few internationally recognized mints.

This infographic from JM Bullion highlights key facts and comparisons about some of the world’s most popular mints, including the United States Mint, the Royal Canadian Mint, the Perth Mint, PAMP Suisse and Sunshine Minting.

The world’s most popular mints: Key facts and comparisons


Some quick facts on each of the world’s most popular mints:

The United States Mint was founded in 1792 and now has minting operations in Philadelphia, Denver, West Point and San Francisco. The mint produced more than 17 billion coins for circulation in 2015, the fastest annual pace since 19.4 billion coins were struck in 2001. Legend holds that George Washington donated some of his personal silver to the mint for manufacturing early coinage.

The Royal Canadian Mint was founded in 1908 in Ottawa. It produces over one billion coins per year, with the Silver Maple Leaf as its signature bullion offering. In 2007, the Royal Canadian Mint created the largest coin in the world—a 100-kilogram, 99.999% pure, $1-million gold bullion coin.

The Perth Mint was founded in 1899. It was originally built to refine metal from the gold rushes occurring in Western Australia, while also distributing sovereigns and half-sovereigns for the British Empire. In 1970, the mint’s jurisdiction was moved to the state government of Western Australia. The Australian Kookaburra (1990-), Koala (2007-) and Kangaroo (1990-1993, 2016-) are some of the mint’s most popular products among bullion buyers.

PAMP Suisse, a private mint, was founded in Switzerland in 1977. The mint refines an impressive 450 tonnes of gold annually, and much of the gold used for worldwide jewelry production comes from PAMP. The mint also produces the popular Fortuna bar, which is available in gold, silver and platinum, with sizes ranging from one gram to 100 ounces.

Sunshine Minting is another private mint. Founded in Idaho in 1979, Sunshine mints 70 million ounces of bullion each year, including its version of the popular Silver Buffalo Round. Sunshine Minting is also the primary supplier of one-ounce silver planchets (round metal disks, ready to be struck as coins) to the United States Mint.

Story by Jeff Desjardins, Visual Capitalist | Infographic by JM Bullion

In the beginning

May 20th, 2016

Baffin Bay’s “birthmarks” date back to Earth’s infancy, geologists say

by Greg Klein

The Book of Genesis somehow overlooks this country but Canada—traces of it, anyway—turns out to be an awful lot older than previously thought. In fact some Baffin Bay rocks contain relics an awful lot older than most of the planet, according to a team of scientists. The wonder of it is that, despite 4.5 billion years of geological turbulence, the Earth still retains these remnants of its 50-million-year babyhood.

Baffin Bay’s “birthmarks” date back to Earth’s infancy, geologists say

These Baffin Bay rocks host 4.5-billion-year-old silicate material
formed when “baby Earth” was less than 50 million years of age.
(Photo: Don Francis)

But don’t expect to see them, handle them or trip over them next time you’re footloose in Nunavut. Their presence can be detected only with an extremely sensitive mass spectrometer.

The findings were reported last week in the academic journal Science under the intimidating title Preservation of Earth-forming events in the tungsten isotopic composition of modern flood basalts. Richard Walker, a co-author and University of Maryland geology professor, took time to explain that to in laypeople’s lingo.

He came to this study through his work with high-precision isotopic measurements. That makes tungsten especially interesting. “Its isotopic composition varies primarily as the result of the decay of another element, hafnium, at the other end of solar system history,” Walker explains. “The isotope of hafnium that decays to tungsten, hafnium-182, has a half-life of only about nine million years. So it was present for maybe the first 50 million years of solar system history. Any variations in tungsten isotopic composition that would follow had to have been created within the first 50 million years of solar system history.”

Walker and his colleagues didn’t expect to find such variations in Earth rocks when they began their study of core formation. The hot, metallic centre of the planet seems to have formed in the first 30 million years of the solar system. “By inference it has a very different tungsten isotopic composition from the rest of the planet. So one of the reasons we got into tungsten isotopes is we’re looking for some geochemical evidence for core-mantle interaction.

“Surprisingly, things didn’t turn out at all like we expected. The isotopic composition of the core, by inference, is presumed to be considerably lower than you, me and light bulbs. Almost all the stuff we have measured in early Earth rocks is actually higher. So that requires some process other than extracting the tungsten from the core. That’s what this paper is all about.”

But the rocks that we’re reporting data for in this study are only a few tens of millions of years old. These are not old rocks, they’re what we consider practically modern rocks.—Richard Walker,
professor of geology at
the University of Maryland

His team and another group had previously found similar isotopic compositions in rocks ranging from 2.5 billion to four billion years of age. “But the rocks that we’re reporting data for in this study are only a few tens of millions of years old. These are not old rocks, they’re what we consider practically modern rocks. But they show the isotopic imprint of the process that happened within the Earth—wow!—really, really early in its history while it was still growing.”

Again, the finding isn’t the rocks themselves, as some media reported. It’s the isotopic measurement, imprint, signature or, to use a word concocted by the U of M press office, “birthmark.”

“I kinda like that term,” Walker says. It represents a portion of the Earth’s mantle that was somehow isolated from the rest of the planet’s middle part over 4.5 billion years ago.

Lead author Hanika Rizo of l’Université du Québec found the Canadian examples on Padloping Island off Baffin Island’s southeastern coast. Only a few rocks have been analyzed so far. “The general type of rock that’s being measured extends over thousands of square kilometres,” Walker points out. “We don’t know how much of this rock has that unusual isotopic signature. That’s something we’ll be working on for years to come.”

Similar findings came from the Ontong Java Plateau northeast of Papua New Guinea.

As for the world’s oldest actual rocks, Walker says that’s a matter of debate. “Everybody accepts that there are rocks that are more than 3.9 billion years old.”

He and some colleagues are among those who believe that rocks from the Nuvvuagittuq Belt of arctic Quebec’s Hudson Bay coast date back at least 4.3 billion years.

Zircons from Western Australia’s Jack Hills date back at least 4.4 billion years. “The rocks they’re found in are nowhere near that age but some of the minerals themselves can be dated to even older than 4.4 billion years.”

But as for the “birthmarks” of Nunavut and Micronesia, they convey a sense of drama to the cognoscenti. This planet, “despite having a very exciting and violent birth in the form of probably a sequence of giant impacts building a bigger and bigger Earth, never completely got itself chemically homogenized,” Walker says. “It’s surprising that we have somewhere down there remnants of the Earth that formed more than 4.5 billion years ago. That’s exciting, at least to a geologist—this goes back to the earliest stages of Earth history.”

Along with Walker and Rizo, report authors include Richard Carlson and Mary Horan of the Carnegie Institution for Science, Sujoy Mukhopadhyay, Vicky Manthos and Matthew Jackson of the University of California, and Don Francis of McGill University.

Christie’s flogs pink diamond for $28.5 million; Sotheby’s hopes Blue Moon will get $55 million

November 10th, 2015

by Greg Klein | November 10, 2015

Update: On November 11 the Blue Moon sold for $48.4 million.

A stinking rich buyer has christened this $28.55-million purchase the Sweet Josephine. And so sets a Christie’s record for pink diamonds, this one described as the “largest cushion-shaped fancy vivid pink diamond ever to be offered at auction.” The November 10 winning bid brought over half a million more than the highest anticipated price and nearly tripled the auctioneer’s past pink record of $10.77 million set in 2009.

In 2010 rival Sotheby’s sold a 24.78-carat pink for $46 million.

Christie’s auctions pink diamond for $28.5 million; Sotheby’s hopes Blue Moon will get $55 million

As investments, diamond jewelry “can appreciate considerably in
value over a relatively short period of time,” according to Christie’s.

The 16.08-carat stone comes set in a ring and “surrounded by a double row of pavé white diamonds, highlighting the main stone, with a third row of small pink diamonds underneath,” Christie’s stated. “The band is comprised of small circular-cut white diamonds set in platinum.”

Among coloured diamonds, pinks are the most coveted and regularly fetch record prices, the auctioneer explained. But with no trace of a secondary colour, this one’s exceptionally rare. “Only one in 100,000 diamonds possesses a colour deep enough to qualify as ‘fancy’.”

Size matters too. Less than 10% of pinks weigh more than one-fifth of a carat. “In almost 250 years of auction history, only three pure vivid pink diamonds of over 10 carats have appeared for sale,” Christie’s added.

The stone “comes to market at a time when great gems are mirroring prices achieved for masterpieces in the world of fine art,” said Christie’s spokesperson Rahul Kadakia prior to the auction. “Collectors are looking to jewels as savvy investments that are both beautiful and can appreciate considerably in value over a relatively short period of time.”

Christie’s auctions pink diamond for $28.5 million; Sotheby’s hopes Blue Moon will get $55 million

These five “heroes” of Rio’s most recent tender went to “notable investors,
collectors and retailers based in Europe, USA, China and the Middle East.”

Rio Tinto’s (NYE:RIO) Argyle mine in Western Australia claims credit for most of the world’s rare pinks and reds. The same day the Sweet Josephine changed hands, Rio’s 2015 Pink Diamonds Tender “delivered an exceptional result, reflecting global demand and sustained price growth,” the company stated. But prices were confidential. Rio plans to suspend Argyle’s operations sometime this quarter.

Sotheby’s hopes to soar past the record-selling pink the evening of November 12, when the final lot of its Geneva auction comes up for bids. The 12.03-carat, internally flawless Blue Moon has been described as one of the world’s rarest gems, with a fancy vivid hue that “might be so unique as to be indescribable.”

This billion-year-old chunk of carbon from Petra Diamonds’ Cullinan mine in South Africa could bag $35 million to $55 million.

See an infographic: Six of the world’s most famous diamonds.

AREVA urges Ottawa to reject Nunavut’s negative environmental recommendation

July 7th, 2015

by Greg Klein | July 7, 2015

Last May the Nunavut Impact Review Board recommended a federal minister reject the proposed Kiggavik uranium mine. Now the project’s backers want the minister to reject the board’s recommendation, saying the NIRB overstepped its mandate.

AREVA urges Ottawa to reject Nunavut’s negative environmental recommendation

Proponents say the community will benefit from 750 jobs
during construction and 500 during operations.

Located near the territory’s southeastern hamlet of Baker Lake, Kiggavik is a joint venture of AREVA Resources Canada (64.8%), JCU (Canada) Exploration (33.5%) and DAEWOO Corp (1.7%). In their application for an environmental permit, the proponents declined to provide a definite start date, citing low uranium prices. That omission comprised the NIRB’s chief concern.

“We do not want this proposal approved but still hanging over our heads for decades to come, not knowing what the future of our community will be,” the report quoted the Baker Lake Hunters and Trappers Organization. The NIRB invited the proponents to resubmit an application once a date has been chosen.

While estimated start dates are helpful, they’re not necessary, argued Vincent Martin, president/CEO of the AREVA subsidiary. Moreover the NIRB’s rationale “expanded their oversight beyond the intent of EA [environmental assessment].”

Martin’s July 3 letter to Minister of Aboriginal Affairs and Northern Development Bernard Valcourt pointed out other mine proposals that were passed without start dates, Nunavut’s Hope Bay gold project and Western Australia’s Kintyre uranium project.

Despite uranium market uncertainty, Kiggavik’s backers “continued with the EA process as a prudent step to enable a positive development decision when favourable market conditions return,” Martin’s letter maintained.

He added that the application provided remedies to address the uncertain start date but it’s not clear whether the NIRB considered them.

Martin called on Valcourt to reject the NIRB’s report and refer it back to the board “to consider the inclusion of appropriate terms and conditions that should be attached to a project approval.”

Failing that, Valcourt should label the report deficient and have the board address a number of omissions and other faults, Martin contended.

A July 7 AREVA press release added, “If the minister rejects the recommendation and approval is received, the Kiggavik project will be more likely to receive approval from shareholders to proceed to development when market conditions are favourable.”

“Ultimately, we are not the decision-makers but we are asserting that the environmental assessment for the Kiggavik project is sound and the approval should therefore be provided.”

The July 7 Nunatsiaq News reported that “AREVA isn’t the only company appealing to Ottawa to reject a made-in-Nunavut decision. Baffinland Iron Mines has also approached Valcourt to overturn the Nunavut Planning Commission’s land use plan ruling, so it can send its expanding shipping project straight to the NIRB instead.”

Read more about the Kiggavik project.

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.

How fares Canada in the Fraser Institute’s global mining survey?

February 25th, 2015

by Greg Klein | February 25, 2015

Saskatchewan’s number two worldwide, Quebec’s back in the top 10 and Manitoba climbed 17 notches. But Alberta, Ontario and British Columbia took a beating in the latest Fraser Institute survey of mining jurisdictions. Released February 24, the study rates 122 jurisdictions (including provinces and states in Canada, the United States, Australia and Argentina) based on 485 returned questionnaires. Drawing on their 2014 experience, mining and exploration companies provided numerical ratings for a number of factors, which the institute tracked on separate indexes.

Most important is the Investment Attractiveness Index, which combines two other indexes—Best Practices Mineral Potential (geology) and Policy Perception (government attitudes). The institute weighs the IAI 60% for geology and 40% for public policy, roughly the same consideration companies reported for their investment decisions.

Here’s the top 10 IAI globally, with 2013 rankings in brackets:

1 Finland (4)
2 Saskatchewan (7)
3 Nevada (2)
4 Manitoba (13)
5 Western Australia (1)
6 Quebec (18)
7 Wyoming (11)
8 Newfoundland and Labrador (3)
9 Yukon (8)
10 Alaska (5)

Here are the Canadian runner-ups:

15 Northwest Territories (25)
21 New Brunswick (23)
22 Alberta (10)
23 Ontario (14)
28 British Columbia (16)
29 Nunavut (27)
42 Nova Scotia (47)

Prince Edward Island wasn’t included.

As for the bottom 10:

113 Sudan
114 Nigeria
115 Bulgaria
116 Guatemala
117 Egypt
118 Solomon Islands
119 Honduras
120 Kenya
121 Hungary
122 Malaysia

The 122 jurisdictions totalled 10 more than in 2013. For inclusion, the institute requires a minimum of 10 responses per jurisdiction.

The anonymous replies also included comments which, for Canadian provinces and territories, note serious but unsurprising concerns.

But for some people, the rankings rankled. B.C.’s 10th-place finish out of 12 Canadian jurisdictions doesn’t jibe with the province’s second-place status for mining investment, according to the Association for Mineral Exploration British Columbia. Citing data from Natural Resources Canada, AME BC credited Ontario as Canada’s favourite for attracting investment. Fraser Institute respondents stuck that province with ninth place in Canada.

“Furthermore, one of the best indicators of success in exploration is seeing discoveries move through to mine development,” said AME BC president/CEO Gavin Dirom. “In recent years, we have seen a number of new major metal mines constructed in our province, including Copper Mountain in 2011, New Afton in 2012 and Mount Milligan in 2013. Also, Red Chris is being readied for commercial operations, and the KSM and Kitsault mine development projects have received environmental assessment certificates.”

The NWT and Nunavut Chamber of Mines noted the Northwest Territories’ considerable improvement and its breakaway territory’s slight slump. The organization vowed to continue working with federal and territorial governments “to improve the investment climate for exploration and mining in the two territories.”

Download the Fraser Institute Survey of Mining Companies 2014.

Strateco sues Quebec for $190 million over stalled uranium project

December 12th, 2014

by Greg Klein | December 12, 2014

Claiming damages for lost investment in its Matoush uranium project, Strateco Resources TSX:RSC launched a nearly $190-million lawsuit against the Quebec government on December 11. The suit alleges actions by the government and its environmental minister wiped out about $123 million spent on the project from 2006 to 2012.

Strateco sues Quebec for $190 million over stalled uranium project

Strateco spent $123 million developing a resource of 7.78 million pounds U3O8 indicated and 19.22 million pounds inferred.

Strateco claims the government strung the company along for years, issuing some 30 permits and praising Matoush’s benefits. In 2013, however, Quebec slapped a moratorium on uranium exploration following opposition from the James Bay Cree Nation. Later that year the province refused Strateco an exploration permit “alleging a lack of social acceptability of a certain group,” the company stated. The project was already permitted by the federal government and the Canadian Nuclear Safety Commission.

“Uranium exploration and mining are allowed in Quebec, both under the old Mining Act and under the new Mining Act that came into effect in December 2013,” the company states, adding that “the government never explained what it meant by ‘lack of social acceptability,’ a concept not defined in any Quebec law or regulation.”

Quebec’s BAPE inquiry is currently examining the environmental effects of uranium exploration and mining. Strateco has since moved into Saskatchewan’s Athabasca Basin. Last month the company announced a deal in which ASX-listed Toro Energy would acquire a stake in Strateco. Toro “has shown clear interest” in Matoush, Strateco indicated at the time. Toro’s experience in permitting an advanced Western Australian uranium project, “in an area formerly under moratorium, will certainly be an asset for Strateco,” the company added.

British Columbia’s 2008 ban on uranium exploration led to a $30.35-million out-of-court settlement. But payment has been held up by disputes among the beneficiaries.