Bacanora secures environmental permit for Sonora project in Mexico

Shares in lithium exploration and development company Bacanora Minerals (TSX-V, LON:BCN) got a boost Friday after it announced it had received environmental approval from the Mexican government for its Sonora project.

The permit lets Bacanora go-ahead with its 35,000tpa (tons per annum) lithium carbonate operation, following comprehensive studies carried out over two years.

“Government approval for the environmental impact statement is the latest key requirement that is now in place at Sonora,” chief executive Peter Secker said in the statement.

The permit lets Bacanora go-ahead with its 35,000 tonnes per annum lithium carbonate operation in Mexico.

“One-by-one we are ticking off our checklist ahead of our goal of developing Sonora into a world class lithium operation,” he noted.

Share in the company climbed on the news in London, closing Friday 3.23% higher at 84.14p. Year-to-date the stock in up more than 20%.

The permit acquisition is one of Bacanora’s latest milestone in the past two years. In 2015, the firm and its joint-venture partner Rare Earth Minerals (LON:REM) signed a conditional agreement with Tesla Motors (NASDAQ: TSLA) to supply the electric cars and energy storage products company with lithium hydroxide from the Sonora project.

In May 2017, the company secured a $11 million investment from Blackrock. And earlier this year, it inked a long-term supply deal with Japan’s Hanwa Corporation, which will see the Tokyo-based trader acquire up to 100% of the output coming from Sonora.

Frequently referred to as “white petroleum,” lithium drives much of the modern world, as it has become an irreplaceable component of rechargeable batteries used in high tech devices and electric cars.

The lithium market, while still relatively small — worth about $1bn a year — is expected to triple in size by 2025, according to analysts at Goldman Sachs.

The commodity has attracted increasing interest from investors, not only in Latin America, where the world’s largest deposits are located, but also in other places such as the UK.

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Shares in Quebec junior surge on Michigan reserves update

Shares in Highland Copper Company Inc (TSX-V:HI) surged on Friday after the company announced a 46% increase in resources at its Copperwood underground copper and silver mine in Michigan’s Upper Peninsula.

During afternoon trade the Quebec-based junior was exchanging hands for $0.16, up 18.5% on the TSX Venture Exchange, in more than double usual trading volumes. Highland Copper is now worth $73.5 million.

In a statement Highland Copper said the measured and indicated resources at Copperwood in Gogebic County are now estimated at 42.5m tonnes, grading an average of 1.59% copper and 3.9 g/t silver.

Copperwood’s contained metal hosted in sediments in the historic district – responsible for some three-quarters of US copper output in the 1800s and early part of the last century – swells to 1.5 billion pounds of copper (680,000 tonnes) and 5.4 million oz of silver.

A feasibility study completed in 2012 estimated construction costs of $213.5 million and according to the company it has enough cash to complete a new study by the second quarter of next year. Highland Copper also owns the nearby past producing White Pine project with historical resources of 1.7 billion pounds of copper.

Private equity firms Greenstone Resources and Orion Mine Finance respectively hold 17.6% and 14.6% of the stock while Osisko Gold Royalties owns a 15.8% stake.

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Rio Tinto wants out of Grasberg now

While Phoenix-based Freeport McMoRan remains at loggerheads with the Indonesian government over selling a majority stake in its Grasberg mine in the remote Papua province, Rio Tinto is reported to be seeking an out sooner rather than later.

Bloomberg reports Melbourne-based Rio has held talks with a number of Indonesian groups about exiting its interest in the Grasberg mine which this year is on track to produce more than 450,000 tonnes of copper (compared to Rio’s target of around 470,000 tonnes in 2017 across its operations) and a staggering 1.6m ounces of gold.

Rio’s deal with Freeport was struck in 1995 and entitles Rio to a 40% share of production when certain output levels are hit. But as a result of strikes and other disruptions and as the open pit at Grasberg nears the end of its life, Rio hasn’t seen any benefit since 2014.

Last year, Freeport offered a 10.6% stake in its Indonesia subsidiary that valued Grasberg at $16.2 billion. Jakarta’s counter offer was $630 million

Apart from building smelters in the Asian nation, Freeport has committed to spending $1 billion per year for the next five years to move operations underground with block-cave mining set to commence in 2019. After 2021 Rio gets the 40% share on all production, but in an interview with Bloomberg last month Rio CEO Jean-Sebastien Jacques said for the company to commit to any spending in Indonesia “an investment would need to prove more valuable than competing opportunities”.

Indonesia has also told Freeport, which under the divestment framework retains operational control until 2014, that it would prefer that the joint venture with Rio be concluded ahead of the stake stale, something Freeport has rejected.

Freeport’s has been mining at Grasberg since the early 1970s and currently owns just over 90% of the local subsidiary PT-FI operating the mine. Freeport has been in negotiations to sell down its stake for the better part of a decade, but talks have repeatedly broken down over valuation.

Last year, Freeport offered a 10.6% stake in PT-FI that valued Grasberg at $16.2 billion. Jakarta’s counter offer was $630 million. The government is arguing that Grasberg’s reserves belong to the state and not the mine operator. Freeport estimates Grasberg’s underground reserves currently being developed at 11.8m tonnes and 24m ounces of gold.

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Southern Copper to resume Tia Maria project in Peru as permit imminent

Southern Copper to resume Tia Maria project in Peru as permit imminent

Southern Copper Corp (NYSE:SCCO), the world’s fifth largest producer of the red metal in terms of output, said Friday it hopes to soon resume work at its $1.4 billion Tia Maria project in Peru, as its expects the government to give it a long-awaited construction permit in the first quarter of 2018.

Reporting results for the three months to September, the Arizona-based company said net profit doubled in the period to $401.8 million compared to the same quarter a year earlier.

Earnings before interest, tax, depreciation and amortization increased 58% to $863.1 million, when compared to the same three months last year.

The miner, a subsidiary of Grupo Mexico, attributed the positive results to higher copper prices, which offset a decline in output.

Southern Copper produced 675,759 tonnes in the first nine months of 2017, down 2.1% from the same period last year.

But the company is betting on the imminent completion of its $1.2 billion Toquepala mine expansion, also in Peru, to boost production. Southern said the project would add 100,000 tonnes of copper to its annual production to reach 1 million tonnes of copper production capacity per year.

It also has high hopes for its Tia Maria mine, which is forecast to produce 120,000 tonnes of copper a year, for an estimated 20-year lifespan.

The project run into fierce community opposition as locals worried about its environmental impacts, so the company had to halt construction in 2015. Support for the project in the southern region of Arequipa has since grown, Southern said, adding that it’s working with authorities to obtain the final licence.

Once it receives such permit, Southern said it would take two years to build the mine.

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Acacia Mining takes further revenue hit, reviews Barrick-Tanzania deal

Acacia Mining (LON:ACA), Tanzania’s No.1 gold producer which, reported Friday a dramatic revenue drop in the third quarter, as it awaits further clarification on the deal reached Thursday between majority owner Barrick Gold (TSX:NYSE:ABX) and the east African nation.

Barrick said yesterday that Acacia would pay Tanzania $300 million and hand the government a 16% stake in three of its gold mines, as part of the agreement aimed at ending disputes affecting the company’s operations, which in turn have hit the Canadian gold giant’s production.

But Acacia restated Friday that no formal proposal has been put forward for consideration. It added that since it was not directly involved in the negotiations between Barrick and Tanzania, any potential agreement would have to be approved by its own shareholders.

Miner said it can’t make an upfront $300 million payment as Barrick promised the Tanzanian government.

The gold producer has faced government pressure in Tanzania since March, when President John Magufuli imposed a ban on gold concentrate, which represents about a third of the company’s output.

Further hurdles, including permit issues and curtailed operations at its main mines in the country hit Acacia’s output in the three months to September.

Gold production in the period fell 8.3% to 191,203 ounces compared to the previous quarter, while capital expenditure decreased to $35.6 million.

Revenue dropped to $171 million (£131m), while earnings before interest, tax, depreciation and amortisation fell 60% to $50 million, mostly due to lower sales.

Acacia shares slipped 3.7% having climbed Thursday on news of the deal, before falling again as investors sought more clarity on the details.

“While progress appears to be being made, there are still significant uncertainties, as evidenced by the market’s yo-yo reaction to yesterday’s news,” analysts at Investec said in a note.

The company itself clarified it doesn’t have the ability to make an upfront $300 million payment.

“Barrick is equally aware of our balance sheet as we are,” Acacia’s Chief Financial Officer Andrew Wray told Bloomberg.

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Alrosa has just unearthed another large yellow diamond, hits annual record of massive findings

Alrosa has just unearthed another large yellow diamond, hits annual record of massive findings

Russia’s Alrosa (MCX:ALRS), the world’s top diamond producer by output, said its affiliate Almazy Anabara has unearthed a 34.17-carat yellow rock at the Ebelyakh alluvial deposit in the Republic of Sakha (Yakutia).

Alrosa has had a lucky year when it comes to finding large fancy-coloured diamonds.

The diamond is the largest fancy-coloured precious gemstone ever extracted by Almazy Anabara, Alrosa said. It measures 20.17 by 19.65 by 15.1 mm and is a transparent intense yellow crystal with a small inclusion in the intermediate zone.

Alrosa has hit this year a record in the number of large fancy-coloured diamond found at its operations.

“We used to extract fancy-coloured rough diamonds over 10 carats once a year on the average, but this year we have already recovered several large fancy-coloured diamonds,” the company said in the statement.

In June, Alrosa unearthed a 65.75-carat yellow diamond at its prolific Jubilee pie and, in September, it recovered a unique 27.85-carat pure pink diamond — the largest of its kind Alrosa has ever found.

The company’s plan is to send the newly found diamond to the United Selling Organization Alrosa (USO Alrosa) in Moscow, where specialists will give it a more detailed and accurate assessment, before the end of October.

Image courtesy of ALROSA.

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Polyus powers on

Russia’s largest gold producer Polyus posted another record-breaking quarter on Thursday, with production rising 16% year-on-year to 642,000 ounces during the third quarter.

Gold output for the first nine months of the year reached 1.58m ounces, an increase of 13%, and CEO Pavel Grachev said the company is confident it will meet its previously announced production guidance for 2017 of 2.075–2.125m ounces.

The company has been working all its mines hard with volumes of ore mined surging 45% to 9.92m tonnes during the quarter. Ore processing was up 12% to 7.3m tonnes over the three months to end-September with throughput capacity expansion either completed or near completion, according to the company.

The company is also unique in the top tier of gold miners with alluvial operations that contributed 116,000 ounces during the first nine months of the year.

The Moscow-based company is set to grow production dramatically over the next two years boosted by its $2.2 billion Natalka mine which was hot commissioned in September.

Polyus predicts gold production of 2.8m ounces in 2019 as Natalka ramps up to capacity of 420–470,000 ounces by the end of next year and at least half-a-dozen brownfield projects come on stream.

Polyus boasts the world’s second largest gold reserves at 71m ounces and in July the company inked an agreement with Russian conglomerate Rostec which over time gives it 100% ownership over the legendary Sukhoi Log deposit. Sukhoi Log in the far east of the country hosts 58m ounces of gold resources and Polyus says a feasibility study should be completed in three to four years.

Polyus, spun out of Russia’s top miner Norilsk Nickel in 2006, returned to the London Stock Market in June raising $879m with the offer valuing the company at $9 billion.

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Vale’s iron ore output hits another record

Brazil’s Vale (NYSE:VALE), the world’s No.1 iron ore miner, said output of the steelmaking material hit a fresh record high in the third quarter as its massive S11D mine in the Amazon continued to ramp up towards achieving full production in 2018.

The Rio de Janeiro-based company said iron ore production rose 3.3% compared with the same period last year to hit a fresh quarterly record of 95.1 million tonnes.

Sales volumes in the three months ended in October were lower than production volumes, implying a slight inventory build-up as a result of operational needs and market strategies. However, the sales/production volume ratio was higher than in in the previous quarter of the year, it said.

Vale reiterated its output guidance for the year of between 360 million and 380 million tonnes of ore.

The mining giant, which is currently looking to sell a few of its loss-making operations, also saw nickel output climb to  72,700 tonnes, or 10.2% higher than in the previous quarter.

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Barrick to give Tanzania stake in mines, $300 million to end dispute

Barrick Gold (TSX, NYSE:ABX) is giving Tanzania a 16% stake in three gold mines operated by its subsidiary Acacia Mining (LON: ACA) and a one-off payment of $300 million (£227.6 million) to resolve a dispute that has hit its operations in the country.

Chairman John Thornton said the agreement also includes a 50:50 partnership between the government and Acacia Mining to share revenues from all the mines the company runs in the east African nation.

Deal doesn’t cover whether an export ban on concentrates affecting Acacia will be lifted, or if the miner will have to pay $190bn in outstanding tax claims.

“A partnership requires trust between the parties, and transparency is the currency of trust,” Thornton said in the statement. “Through our discussions over the last three months we have established both and this will form the basis of our relationship in the future.”

The deal does not mean Tanzania will immediately lift the demand for Acacia, in which Barrick has a 64% stake, to pay $190 billion in allegedly unpaid taxes. But the parties agreed to form a working group that will focus on the resolution of the outstanding tax claims, Barrick said.

The agreement doesn’t cover either whether an export ban on gold and copper concentrates affecting Acacia will be lifted.

Still, investors reacted positively to the news, with Acacia’s shares soaring more than 20% to 227.8p. Barrick’s stock, however, was trading slightly down in Toronto (-0.15%) to Cdn$20.13, and also in New York (-0.37%) to $16.11.

The world’s largest gold producer and the Tanzanian government have been in talks for months trying to reach a deal on the issues affecting Acacia’s operations, which in turn have hit Barrick’s production.

The parties first locked horns in March, when the government banned exports of concentrates, which represents about a third of Acacia’s output.

Less than four months later, Tanzania accused Acacia, the country’s No.1 gold producer, of operating illegally and evading tens of billions of dollars in taxes by understating the amount of metal concentrate in exports from the three gold and copper mines it operates in the country.

Acacia Mining, which owns and operates Tanzania’s three major mines — Bulyanhulu, Buzwagi and North Mara, said it was still studying the deal reached by Barrick and would issue a statement later on Thursday.

The African nation is the continent’s third-largest gold producer.

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Miner Exceeds Estimates for Gold Produced in Q3/17

Source: Streetwise Reports 10/19/2017

BMO Capital Markets reported the preliminary Q3/17 production results for this senior gold producer.

According to an Oct. 16 research note, Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE) produced 257 Koz gold in Q3/17 from six of its seven mines (excluding Brio). The quantity achieved surpassed BMO Capital Markets’ expected 240 Koz “based on better-than-expected production from Chapada, Malartic and El Peñón, offset by lower production at Minera Florida,” indicated analyst Andrew Kaip.

As for other metals, Yamana produced 37.1 Mlb copper, which beat BMO’s anticipated 33.9 Mlb, Kaip added. It generated 1.43 Moz silver, which was in line with BMO’s estimate.

About the Canadian miner’s Q3 performance, Kaip concluded that “incorporating the stronger-than-expected production results is expected to have a positive impact to earnings.”

Yamana’s gold production for the first three quarters of 2017 is 717 Koz, Kaip noted. This represents about 76% of its 940 Koz gold production guidance for this year. Although the company increased its guidance for gold once already in 2017, it is “currently evaluating whether or not to increase production guidance for gold, silver and copper based on year-to-date production and an expected strong Q4/17,” he wrote.

Kaip also noted that as of Sept. 30, Yamana had “approximately $125 million in cash.”

This metals producer will report complete Q3/17 operational and financial results on Oct. 26 followed by a conference call on Oct. 27.

BMO Capital has a Market Perform rating and $3.25 per share price target for Yamana, whose shares are trading at around $2.64 per share.

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Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise …read more

Canadian Mining Hall of Fame welcomes four new inductees for 2018

Since 1988, the Canadian Mining Hall of Fame has been recognizing and celebrating outstanding achievement in the Canadian mining industry. On January 11 the CMHF will be welcoming four new members to its prestige group at the 30th Annual Dinner and Induction ceremony. The new inductees are Ross Beaty, Bob Gannicott, Terry MacGibbon and Ed Thompson.

The four will join the current 177 hall of famers and the 2018 CMHF event, to be held at the Metro Toronto Convention Centre, will reflect on their achievements in leadership, entrepreneurialism, and philanthropic work.

“The Canadian Mining Hall of Fame is proud to recognize these four outstanding individuals for their lasting contributions to the mining industry, both here in Canada and across the globe,” said CMHF Chair Bill Roscoe in an official press release.

Not only has each individual made considerable impact on the Canadian industry, but their passions have also positively impacted surrounding communities and ecological territories.

The 2018 CMHF Inductees:

Bob Gannicott (Photo by Angela Gzowski Photography, Image courtesy of Dominion Diamond Corporation Facebook Page)

Bob Gannicott

Robert Gannicott was both a pioneer in exploration and discovery of North West Territory mines, and a strong advocate for Indigenous peoples and NWT communities. Throughout his years as a visionary entrepreneur, he played a major role in discovering the Diavik mine, which is at the helm of Aber Resources, a 40% owner. Aber was later acquired by a diamond retailer and renamed the Harry Winston Diamond Corporation before the retail business was sold and renamed Dominion Diamond Corporation. When DDC acquired 80% interest in the Ekati mine, combined with the 40% of Diavik this became one of Canada’s largest independent diamond producers. Gannicott passed away in 2016 and his work and memory will be honoured at the CMHF dinner.

Ross Beaty (File Image)

Ross Beaty

A recent appointee to The Order of Canada, Ross Beaty is considered one of Canada’s most successful mining entrepreneurs, according to the official press release. With a background in geology he has built up over thirteen companies creating over $6 billion in shareholder value. His flagship company, Pan American Silver, is one of the biggest global silver producers. In addition, Beaty has paired his passion and success with giving back via environmental, civil society, and philanthropic support.

Terry MacGibbon (File Image)

Terry MacGibbon

Terry MacGibbon became known within the industry as an entrepreneur, innovator, and role model when he segued into mine development and company building. Applying experience from his 30 years with Inco, he built four considerable mining companies (FNX Mining, Torex Gold Resources, TMAC Resources and INV Metals), raised billions of dollars of capital, developed great relationships with industry stakeholders, and generated major employment and economic benefits.

Ed Thompson (Image courtesy of The Northern Miner)

Ed Thompson

One of the founding members of CMHF, Ed Thompson was also a leader in bringing the Prospectors and Developers of Canada (PDAC) global respect and recognition. According to the CMHF official press release, he has showed his diversity of skills by contributing to numerous aspects to the Canadian mining industry …read more

Scotiabank to offload gold trading unit

The Bank of Nova Scotia, A.K.A. Scotiabank, is offloading its gold business in the wake of a massive money laundering scandal involving smuggled gold from South America by one of its clients.

The Canadian lender’s ScotiaMocatta business is one of London’s main gold trading banks and, according to Financial Times, had among its clients a US refinery accused in March of money laundering using “billions of dollars of criminally derived gold” mostly from Peru.

Moves comes on the heels of massive money laundering scandal involving smuggled gold from South America by one of the bank’s clients.

Court documents filed in Florida claim that workers at a subsidiary of Elemetal, a precious metals refinery in Dallas, “knowingly conspired to purchase gold with the intent to promote the carrying on of organized criminal activity, including illegal gold mining, gold smuggling and the entry of goods into the US by false means and statements to US Customs, and narcotics trafficking,” FT reported.

Elemental’s unit, NTR Metals, is said to have imported more than $3.6 billions of gold from Latin America between 2012 and 2015.

Chinese buyers are rumoured to be the key targets of the Scotiabank sale, which is being led by JPMorgan.

Scotiabank (TSX, NYSE: BNS) is Canada’s international bank and a leading financial services provider in North America, Latin America and Asia-Pacific, with more than 24 million customers and 88,000 employees.

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