March Newsletter – 14.03.16
TOP NEWS
PDAC 2016: Randgold CEO bemoans short-term thinking across industry
Peter Koven, March 9, 2016
Mark Bristow, the chief executive of African miner Randgold Resources Ltd., has been an outspoken critic of his gold industry peers for years. He blames them, with plenty of justification, for wasting the best gold bull market ever by not generating any real value per share. He said the value of the industry’s impairments is worth more than its combined market cap today.
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PDAC 2016: Giant bifurcation underway in junior mining sector
Peter Koven, March 7, 2016 Financial Post
In mining, the great bifurcation is finally underway.
After a multi-year bear market in which nearly every junior mining stock got decimated, the sector is enjoying an honest-to-goodness recovery in 2016. This year’s PDAC conference is ringing with renewed optimism as commodities, particularly gold, are rebounding.
But the early evidence suggests this recovery is limited to a very small group of companies. The high-quality juniors are raising money again and enjoying huge bumps in their share prices. Meanwhile, nothing has changed for most of the companies, which remains entrenched in an awful bear market with no end in sight.
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COMMODITIES
Iron Ore Jumps Most on Record as Market Goes ‘Berserk’
By Jasmine Ng March 7, 2016 Bloomberg
- Goldman says gains won’t last with $35 seen in final quarter
- Huatai Great Wall sees `short-covering’ in futures markets
Iron ore soared the most ever after Chinese policy makers signaled their willingness to buttress economic growth, boosting the outlook for steel consumption in the top user and igniting speculation that some investors who’d bet against the market had been caught out.
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Tin Snaps Back
David Fickling, Bloomberg March 7, 2016
The least-traded LME metal is having a bit of a moment. Tin, used mainly in solder for circuit-boards, is the best performer on the London Metal Exchange so far this year, with a 17 percent price rise to date that’s outstripped the performance of more fashionable commodities such as copper and zinc.
That sort of gain could be taken as evidence that a collapse is looming, but there’s reason to think tin’s rally has legs.
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LEGAL AND REGULATORY
Compliant documents mislead investors
Daniel Gleeson, 09 Mar 2016 Mining Journal
Within a light-hearted presentation on NI 43-101 reports at the Prospectors & Developers Association of Canada’s annual convention came a hard message: the industry is publishing speculative project studies that are misleading investors.
Over a three-month period from May 1 to August 31, 2015, consultant and environmental engineer, Tim Oliver, constructed a compelling argument for one of the industry standard’s being upgraded.
His research on 34 studies – a combination of preliminary economic assessments, prefeasibility studies and feasibility studies – came out with some startling results. A total of 33% of studies were signed off by what Oliver deemed ‘unqualified’ Qualified Persons, project scheduling information was either incomplete, inaccurate, or lacked contingencies in many studies, and cost breakdowns were regularly insufficient.
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Making the Most of Extractive Industries Data
March 9, 2016 World Bank
- A World Bank report aims to improve the standardization, classification and accessibility of Extractive Industries Transparency Initiative (EITI) data
- Boosting consistency and accessibility of EITI data increases awareness about the extractives industries and enhances its contribution to sustainable development
An impressive amount of data from the oil, gas and mining industries has been collected through the Extractive Industries Transparency Initiative (EITI) since its launch in 2003. A total of 45 countries have now published EITI reports collectively, covering 282 financial years and representing over US$1.8 trillion in government revenues from the oil, gas and mining industries. Reporting of payments in the sector from companies to government is required by the EITI in an effort to increase accountability. In 2013, the EITI amended its transparency standard to require countries to disclose data beyond revenues. Reports now include information about governments’ sector and fiscal management, licensing, ownership of natural resources, employment and other contextual information.
But what does this data really tell us?
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FINANCIAL
PDAC 2016: Bankers see Toronto as destination for potential spin-off mining IPOs
Peter Koven, March 9, 2016 Financial Post
No issue is causing more concern for miners right now than access to capital. So a full house was on hand on Tuesday to hear from a panel of well-known Bay Street bankers, who gave their views on the state of mining financing and the broader health of the industry. The speakers included Egizio Bianchini (BMO Capital Markets), Peter Collibee (Scotia Capital), Rick McCreary (TD Securities) and David Shaver (RBC Capital Markets).
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PROJECTS
Failed mining projects offer critical analytical keys to avoid future disappointment 9th March 2016
Simon Rees, Creamer Media Correspondent
TORONTO (miningweekly.com) – The capital structures of failed or faltered mines offer important insights when it comes to assessing the potential of future projects, according to Exploration Insights’ economic geologist and analyst Joe Mazumdar.
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First Quantum sells nickel-copper-platinum mine in Finland for $712 million
Cecilia Jamasmie, March 10, 2016 Mining.com
Canada’s First Quantum Minerals (TSX:FM) (LON:FQM) said Thursday it is selling its nickel, copper and platinum-group metals Kevitsa mine in Finland for $712 million to Boliden AB, as part of ongoing efforts to reduce debt.
The Swedish mining and smelting company will pay cash for the mine that has nickel, copper and platinum-group metals, subject to customary adjustments, First Quantum said. The sale requires regulatory and antitrust approvals and is expected to be completed in May.
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TECHNOLOGY AND INNOVATION
PDAC 2016: Integra hands out $500,000 to ‘Gold Rush’ contest winners in giant mining bash
Peter Koven, March 7, 2016
The PDAC conference is legendary for its giant booze-fueled parties, and there were none bigger on Sunday night than the one hosted by Integra Gold Corp., which named the winners of its clever “Gold Rush Challenge.”
The contest began last year, after Integra acquired a project in Quebec that came with six terabytes of mining records dating back to 1933. The company put all the data online and invited the public to find gold. More than 1,300 people entered the contest, with $1 million of prizes up for grabs to the top submissions.
Some of the submissions were a little dubious; one guy apparently claimed he had X-Ray glasses and could see through the earth’s crust. But there were many strong ones as well.
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Centric to release free geological data management system
Paul Moore International Mining
Centric Mining Systems has announced the pending release of “the first free, cloud based drill hole and sample management system” early this spring. “With the goal of empowering explorers to have confidence in their resource related data, Centric Explore delivers a secure, accountable, scalable, and accessible geological data management solution.” The solution is free for small projects with an option to move to a paid monthly subscription as the project grows.
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PDAC 2016: planetary resources shows off its asteroid mining technology
John Shmuel, March 7, 2016 Financial Post
TORONTO — Depressed commodity prices aren’t stopping one mining company at PDAC from settings its sights high — beyond orbit, actually.
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