October Newsletter – 15.10.18


Behre Dolbear participated in the mission of UK Trade Commission in Kazakhstan October 8-10, 2018. Meetings with mining companies and governmental officials provided insight on the new mining code and it’s practical application, updates in environmental and taxation regulations and provided valuable information on exciting new developments in mining industry in Kazakhstan. More ground is now open for licensing on “first come, first serve basis”, and mining companies are keen to add to their resource base using all the cutting-edge digital technologies.

Sunrise over capital of Kazakhstan, Astana.


A deal to sell a failing nickel mine fell through, then they found gold — lots of gold

But there is some concern about whether the gold strike — expected to be worth around $50 million — is the tip of the iceberg, or just a lucky strike

Kevin Small knew something was up, which was why he was driving a pick-up truck into the dark abyss of an Australian underground mine, occasionally swerving into turnouts to dodge 55-ton trucks hauling giant loads of rock.

A team of his senior colleagues had summoned Small, head of Toronto-based RNC Minerals Corp.’s Beta Hunt Mine, for reasons they declined to share over the radio system that everyone in the mine used.

After 15 minutes, he arrived at his destination, about 500 metres below the surface. Three colleagues, already on the scene, stood marvelling at a rock face that had been blasted open. Huge ribbons of gold streaked the surface and there was more gold lying on the floor than the entire mine had produced in months.


Barrick maintains forecasts ahead of Randgold vote

TORONTO (Reuters) – Canada’s Barrick Gold Corp (ABX.TO), which recently announced a $6.1 billion (£4.6 billion) deal to acquire Randgold Resources Ltd (RRS.L), t.co/N7uaLM1tXK affirmed its 2018 gold and copper production forecast on Wednesday, reflecting improvements in operations.

Citing preliminary data, Barrick said its 2018 effective tax rate was expected at about 48 to 50 percent, up from a previous forecast of 44 to 46 percent, because of lower-than-expected sales from lower-tax mines. More details are expected when it reports quarterly results on Oct. 24.

In the third quarter, Barrick said it sold 1.2 million ounces of gold and 114 million pounds of copper, and produced 1.15 million ounces of gold and 106 million pounds of copper.

Gold production was about 8 percent higher than in the second quarter, while all-in-sustaining costs, a closely watched industry benchmark, were about 7 to 9 percent lower.


LMEWEEK-BHP aims to restart Olympic Dam copper facility this month

LONDON, Oct 9 (Reuters) – BHP expects a plant at its Olympic Dam mine to restart this month following repairs and the company has found a way to deliver returns from the asset as part of a focus on maxmising productivity, its head of Australian operations said on Tuesday.

“The expectation remains that we’ll have that back up and running this month,” Mike Henry, president of operations, minerals Australia, said in an interview on the sidelines of LME Week, an industry gathering in London.

“We have identified a very credible route to growing the asset,” Henry said, adding the company was on track with a plan to seek board approval for “bite-sized chunks of capital (expenditure) with healthy returns”.

Henry said Olympic Dam, which contains uranium oxide, copper, gold and silver, was “a wonderful ore body”, but in the latest in a series of setbacks, BHP in August announced it had shut an acid plant following a boiler tube failure, disrupting copper processing. Underground mining at the site continued as normal.


Top copper miner almost sold-out on extremely strong China

Chinese copper demand has been so strong in the past few months that top producer Codelco has almost sold out of supplies for next year, well ahead of schedule, according to the chairman of the Chilean state-owned company.

“It’s extremely strong, not only China. It’s extremely strong around the world,” Juan Benavides, who took over as chairman of Codelco in May, said in an interview in London. The wave of buying comes as prices have fallen 15 percent this year amid fears that a trade war between the U.S. and China could stifle global growth.



From Blenheim to BlackRock, Here’s Why Everyone’s Bullish About Copper

The chorus of copper bulls includes big producers such as Freeport-McMoRan and hedge funds like Andurand

As the metals world descends on London this week, it seems everybody has something in common: they’re all copper bulls.

Speaking ahead of the annual LME Week gathering that starts Monday, more than a dozen commodity-focused hedge funds, trading houses, producers, banks and brokers were almost unanimously positive on the near-term outlook for the metal used in pipes and wires. Metals specialists consistently pointed to the disconnect between between big-picture concerns for the economy and a rapidly- tightening physical market.

It’s been a tough few months for copper. Worries about a global trade war’s effect on economic growth helped push the metal into a bear market in August and the price recovery since then has been tepid. Yet spot sales of copper to China are booming, say executives at two leading copper suppliers, reaching levels not seen for several years, and exchange inventories have fallen sharply.


Raymond James adjusts forecasts as uranium outperforms zinc, copper in Q3

Analysts at Raymond James are lowering their forecasts for zinc and copper prices.

For the fourth quarter, the analysts have changed their zinc price forecast to US$1.20 per lb. from US$1.40 per lb., and for 2019 they have trimmed their target price from US$1.30 per lb. to US$1.20 per lb. In 2020 they forecast a zinc price of US$1.10 per lb., down from their previous estimate of US$1.20 per lb.

For copper, the analysts have decreased their price target in the fourth quarter from US$3.20 per lb. to US$3.00 per lb., and for 2019 from US$3.25 per lb. to US$3.10 per lb. In 2020 they forecast a copper price of US$3.20 per lb., up from their previous estimate of US$3.00 per lb.



GOLD: Court rules against Kinross mine in Chile

CHILE – The supreme court of Chile has maintained the closure of the water pumping wells at the Maricunga gold mine owned by Toronto’s Kinross Gold. This is the latest chapter in a long dispute between the company and the local environmental regulator, SMA.

The SMA originally ordered the pumps be shut down in 2016, and Kinross suspended operations two years ago, laying off 300 workers. The Maricunga mine was a heap leaching operation located between 4,200 and 4,500 metres high in the Atacama desert.

The mine produced 212,155 oz. of gold equivalent in 2015. In the proven and probable reserves, there are about 1.0 million oz.

Visit www.Kinross.com for information on the company’s other gold operations.


Chile lithium miner shareholder sue to block sale to China’s Tianqi 

SANTIAGO (AFP) – The controlling shareholder in Chile’s lithium producer SQM has mounted a legal challenge to halt the sale of nearly a quarter of the company to Chinese group Tianqi.

Pampa Calichera, Potasios de Chile and Global Mining — collectively known as the Pampa Group which holds 29.12 percent of SQM — said the decision by Chilean regulators to allow the deal breaks competition rules.

SQM operates one of the world’s largest lithium mines on the Atacama salt flats in northern Chile. Lithium is used in batteries, and is in high demand given the boom in the production of electric cars.



B.C’s historical Kootenay-Boundary district mining region gathers attention

Non-profit organization Geoscience BC recently published a series of maps and geological data whose main goal is to encourage mineral exploration in the Regional District of Kootenay Boundary in southern British Columbia.

Known as the Greenwood area, the site is well established since the 1880s as one of the most prolific areas for the exploitation of gold, silver, copper, lead, and zinc in the western Canadian province.

According to Geoscience’s archives, it hosted 26 mines whose combined production reached 1.2 million ounces of gold and over 270,000 tonnes of copper. Among those mines was the world-class, open pit copper-gold skarn deposit known as Phoenix, as well as the Mother Lode, Greyhound and Oro Denoro mines.

“More recently the Lexington copper-gold mine operated up to 2008 and efforts are currently underway to resume mining at it as well as the nearby Golden Crown, May Mac and Lone Star Mines,” Geoscience BC Vice-President of Minerals and Mining, Bruce Madu, told MINING.com.



Capstone ends Pembridge deal, shutters Yukon mine

Capstone Mining Corp. [CS-TSX said Thursday it is terminating a deal to sell its Minto Mine in the Canadian Yukon to Pembridge Resources Plc. [PERE-LON]. Capstone also said it is immediately putting the mine on care and maintenance while it waits for copper and equity markets to improve.

Shares of Capstone, which also has operating mines in Arizona and Mexico, fell 7% or $0.05 to 66 cents on Thursday.