Union thrilled with salary, benefits deal for laid-off Cameco workers

‘It’s way more than I would ever have anticipated’: Union thrilled with salary, benefits deal for laid-off Cameco workers

ALEX MACPHERSON, SASKATOON STARPHOENIX

Published on: November 14, 2017 | Last Updated: November 14, 2017 4:45 PM CST

Cameco Key Lake

Cameco Corp.’s Key Lake uranium mill in northern Saskatchewan. CAMECO CORPORATION / SASKATOON

Workers affected by Cameco Corp.’s decision to temporarily close two uranium production sites in northern Saskatchewan will be paid 75 per cent of their base salary and retain their benefits during the 10-month layoff, according to the union representing them.

United Steelworkers (USW) Local 8914 announced the agreement with Cameco in a social media post on Monday. Denis O’Hara, the union’s interim president, said in an interview that the money will come from employment insurance (EI) plus “top-ups” from the company.

“It’s way more than I would ever have anticipated,” O’Hara said less than a week after Cameco announced plans to temporarily shut down its McArthur River mine and Key Lake mill, beginning in January, in the face of what it called “unsustainably” weak uranium prices.

The production halt is expected to affect 560 Cameco employees and 285 contractors. O’Hara said while it’s not yet clear how many USW members will get pink slips, Cameco’s actions mean the workforce will be around next year when the operations are expected to start up again.

“This enforces my opinion of Cameco being a caring employer. They care about their employees and the communities they come from,” O’Hara said, noting that the agreement will be especially beneficial for the roughly 49 per cent of workers who live in the province’s north.

Cameco said in a memo to employees last week that it was working on a plan to top up EI benefits and provide group benefits during the shutdown. Tim Gitzel, the company’s president and CEO, said in an interview that the company will need them when the operations are restarted.

Company spokesman Gord Struthers confirmed the agreement in an email on Tuesday, noting that Cameco will top up EI and continue “selected benefits” for permanent unionized and salaried staff.

“Cameco respects people and we want to help our employees and their families get through this period. When it’s time to restart production, we will need the many skilled and experienced people who operate these facilities,” Struthers said.

Cameco has been struggling since the 2011 Fukushima Daiichi disaster sent uranium prices into freefall by drastically reducing demand for nuclear fuel. The company responded by cutting costs, part of what it calls a “lower for longer” business strategy.

Despite temporarily closing its Rabbit Lake mine in April 2016 and slashing its corporate workforce, however, the company continued to struggle as uranium prices fell by more than 70 per cent. Last month, Cameco reported its fourth consecutive quarterly loss.

“There’s just today too much uranium out there,” Gitzel said last week. “We have a good inventory of uranium at Cameco that can sustain us that we can put into profitable contracts … We can actually buy uranium cheaper than we can produce it.”

Whitecap buys Cenovus’ Weyburn Unit for $940-million cash

Whitecap buys Cenovus’ Weyburn Unit

Company plans to resume drilling of new production and injection wells

BRIAN ZINCHUK / PIPELINE NEWS

NOVEMBER 13, 2017 05:33 PM

cenovus-goodwater

Photo By Submitted

Weyburn, Calgary – It may have been prescient that Whitecap Resources Inc. CEO Grant Fagerheim was inducted into the Saskatchewan Oilpatch Hall of Fame at the 2017 Saskatchewan Oil & Gas Show. He’s liable to be spending a lot more time in Weyburn now, as Whitecap announced on Nov. 13 it had bought the Weyburn Unit from Cenovus Energy Inc. for $940 million cash. Whitecap plans on resuming drilling and expanding the operation.

Cenovus took to selling off assets in a big way to finance its $17.7 billion purchase of ConocoPhillip’s 50 per cent interest in jointly owned oilsands venture and deep basin conventional assets, announced March 29. Since then, it’s targeted $4 billion to $5 billion in asset sales to cover part of the purchase. The Weyburn Unit went on the block.

The Weyburn Unit is one of Saskatchewan’s most significant oilfields, producing over 60 years. They introduction of a carbon dioxide miscible flood enhanced oil recovery (EOR) scheme near the turn of the century dramatically enhanced the field’s expected producing life, to the point where Cenovus stopped putting an estimate on its longevity. The field initially only took carbon dioxide from the 20 inch Souris Valley Pipeline running from the Dakota Gasification Company at Beulah, N.D. Since 2014, it has also been receiving carbon dioxide from the SaskPower Boundary Dam Unit 3 Integrated Carbon Capture and Storage Project, near Estevan, a contract that has seven years of life remaining.

The previously announced sale of Cenovus’s Pelican Lake assets closed on September 29, 2017 and the company still anticipates the previously announced sales of its Palliser and Suffield assets to close later this year. “We’re pleased with the progress we’ve made in delivering on our divestiture plan to optimize our portfolio and deleverage the company’s balance sheet,” said Alex Pourbaix, Cenovus president and CEO. “Net proceeds from the Weyburn asset sale, combined with the other three divestitures announced earlier this fall, will position us to retire the entire $3.6 billion bridge facility associated with the ConocoPhillips asset purchase by the end of 2017.”

For Whitecap Resources, it’s another significant addition in southern Saskatchewan in recent years, as other, larger players move out. In May 2016, Whitecap purchased 11,600 barrels of oil equivalent  (boepd) assets from Husky in southwest Saskatchewan as that company, too, sought to divest itself of much of its widespread assets to have a more concentrated focus on thermal heavy oil projects.

While the operator of the Weyburn Unit, Cenovus has many partners with minority shares in the unit. The agreement is for Cenovus’ interests.

The acquisition includes a 62.1 per cent operated working interest in the Weyburn Unit (14,600 boepd) and 200 barrels of oil equivalent per day boepd of production from minor assets in southeast Saskatchewan. Whitecap described the Weyburn Unit as a world class carbon dioxide enhanced oil recovery development with a low base decline rate of less than 5 per cent, high operating netback of $31.86/boe, and significant short and long term development and expansion opportunities. The assets also include extensive infrastructure in place to facilitate future development plans.

Strategic rationale

In a press release on Nov. 13, Whitecap said, “The acquisition is a continuation of Whitecap’s strategy to enhance our existing portfolio with assets that exhibit lower production declines, high operating netbacks and significant growth opportunities with strong capital efficiencies to further enhance our future free funds flow. The Unit is a self-sustaining operation that generates strong free funds flow even in a low commodity price environment and requires minimal capital investment to maintain production volumes and associated funds flow.

“In 2018, our base case assumptions are to invest 35 per cent of the net operating income from these assets to maintain production at 14,800 boepd which we anticipate will result in significant additional free funds flow of approximately $112 million. We estimate that over the next five years, the base assets have the potential to grow to approximately 17,700 boepd and generate cumulative free funds flow of $459 million using a flat operating netback of $31.86/boe.”

Drilling to resume

Whitecap noted there has been minimal development of this asset over the last few years with only 12 infill wells drilled in 2015 and one CO2 expansion phase added in 2014. Due to low commodity prices, capital spending has been limited to production maintenance over the last few years. A drilling rig that worked in the unit for decades was released during this time.

Whitecap anticipates spending approximately $60 million in 2018 on the Unit, which represents 35 per cent of anticipated net operating income from the assets, to maintain a flat and stable production profile.

The Unit is anticipated to be a multi-decade source of self-funding growth and annual free funds flow with meaningful near and long term growth opportunities. There are significant optimization and expansion opportunities within the Unit including:

  • 34 waterflood and EOR area infill drills;
  • Reservoir optimization of the mature EOR patterns to minimize decline and improve CO2utilization;
  • Eight identified and planned COexpansion phases which include the drilling of 93 (57.8 net) production and 62 (38.5 net) injection wells; and
  • Recovery of hydrocarbons liquids from recycled CO2stream prior to reservoir reinjection.

Whitecap said the eight EOR expansion phases are conservatively booked to an ultimate recovery factor of 31 per cent compared to an average ultimate recovery factor of 54 per cent booked on the existing 13 phases. To date, the 13 existing phases have recovered on average 42 per cent of the original oil in place (OOIP) with some of the more mature phases recovering over 60 per cent. The eight expansion phases will develop a significant portion of the remaining 44 per cent of the Unit area that has yet to benefit from the CO2 injection. The hydrocarbon liquid recovery from the CO2 stream, prior to re-injection, is also expected to provide an extremely stable and significant source of free funds flow.

There are also material expansion opportunities identified immediately offsetting the existing CO2 scheme which are in the preliminary planning stage. These include vertical and lateral expansion of the existing CO2 EOR scheme of which the combined opportunity set is unbooked and could represent incremental gross reserves of 109 MMbbls and a peak incremental gross production increase of over 13,000 bopd.

The field has had a long history

Sixty-three years ago, the discovery well of what would eventually become known as the Weyburn field was drilled near Ralph by Central Leduc Oils Ltd., a company which became Central Del Rio Oils Ltd. in 1957 with the merger of Del Rio Oils. The discovery well at 14-7-7-13-W2 came in during the fall of 1954.

According to PetroleumHistory.ca, “Central-Del Rio was purchased by Canadian Pacific Oil and Gas in 1969. However, the company continued to operate under the Central-Del Rio name until 1971 when its name changed to PanCanadian Petroleum Limited.

“PanCanadian was purchased by Alberta Energy Company in 2002 and became EnCana. Later EnCana was split into EnCana and Cenovus.”

That split took place in 2009, with EnCana at the time focussing on natural gas, and Cenovus focussing on oil.

 

Tesla battery production releases as much carbon dioxide as eight years of gasoline driving

Tesla battery production releases as much carbon dioxide as eight years of gasoline driving

by  DAVID BOOTH  | NOVEMBER 10, 2017
http://driving.ca/auto-news/news/motor-mouth-a-few-more-inconvenient-truths-about-ev-co2-emissions

gas gauge

It was a huge announcement, greeted with much fanfare. Ford, BMW, Mercedes-Benz and the VolkswagenGroup have joined together to build an automobile-recharging network throughout Europe, one they hope will allow uninterrupted EVing all throughout the continent by 2020. Better yet, said recharging stations will be of the ultra-fast 350 kilowatt variety, which are the ne plus ultra of battery rebooting, rendering an almost complete recharge in but 15 minutes or so. Now, never mind that there are currently no car batteries — no, not even Tesla’s — that can withstand such an onslaught of electrons without blowing up, or that the first cars (mondo expensive Porsches and Audis) that will be 350 kW-capable won’t be released until 2019; the formation of what’s called the IONITY consortium is a development worthy of front page, extra bold headlines.

But, like all things EV, it seems like it’s only the rah-rah, let’s-plunge-headfirst-into-something-we-haven’t-fully-calculated optimism that gets the media’s attention. A little more sobering is a recent study by the University of Michigan that calculated the “well-to-wheels” production of automotive greenhouse gases depending on a) the source of the electricity used to recharge said electric vehicles and b) the rough country-by-country breakdown of those sources. And, to make it easier for simpletons (that would be Yours Truly) to understand, rather than quantifying the difference in kilowatt-hours, BTUs or some other archaic scientific quantum that would mean nothing to the average motorist, authors Michael Sivak and Brandon Schoettle converted the entire equation to a miles per gallon equivalent. By Sivak’s estimation, for instance, a battery-powered electric car fueled by electricity generated by coal gets the equivalent of 29 US miles per gallon. Ditto for oil-powered generation. On the other hand, solar power is good for 350 mpg, nuclear 2,300 mpg and hydro a whopping 5,100 miles for every blessed gallon of gasoline.

The beauty, then, of Fuel Sources for electricity in the individual countries of the world and the consequent emissions from driving electric vehicles is that it gives an easily understood quantification of the benefit of converting cars from gasoline to electricity depending on what sources each country uses to generate all that electricity. Put even more simply, the numbers Sivak et al have determined are the break-even point: If gasoline-powered cars can achieve these magical fuel economy numbers, then they will pump out less C02 than BEVs. If they can’t, then EVs have the advantage.

First, the good news, at least for we Canuckians: According to U of M’s calculations, thanks to our cornucopia of green energy sources, gasoline cars would have to average 1.4 litres per 100 kilometres to match the CO2 reduction available from BEVs. That’s 169.5 miles per gallon. Needless to say that’s an unattainable goal, even the most optimistic motorhead not daring to posit such a breakthrough. Score one for the Great White Frozen North then when it comes to EVs.

But, before you go getting all smug, note that we’re not anywhere near the top. Pride of place atop the potential CO2 reduction sweepstakes goes to — cue drum roll — Albania. Yes, with 100 per cent of its electricity generated by hydro power, it gets a perfect 5,100 mpg score. Never mind that there’s probably not a dozen people in the once-totalitarian agrarian state that can afford a Tesla; at least the potential is there. Ditto for Paraguay, Nepal, the Congo and Ethiopia, which are next in line. Indeed, it is in 7th place Norway that one finally sees some convergence between fuel economy equivalency (1,820.6 mpg) and the ability to afford an expensive EV.

But even Norway is a drop in the greenhouse gas reduction bucket. And the numbers for the world’s largest economies are not nearly as energizing. The breakeven point for the United States, for instance, is 55.4 mpg (4.2 L/100 km). With 33 per cent of its electricity supplied by coal and another third by natural gas, if America’s fleet of gasoline-powered vehicles could average 4.2 L/100 km or better, they would actually produce less CO2 than electric cars. Now, to be sure, the current average consumption is about twice that, but 55 miles per gallon is still the number former president Obama was touting as attainable by 2025 (albeit with some loopholes). And, let us not forget, the current president is promoting coal production, so Sivak’s magical number may become be easier to attain.

Worse yet is China, the country many environmentalists are currently touting for its massive push toward EVs. Because so much of its electricity is coal fired, its break-even point is 40 mpg (5.9 L/100 km), a number my new 2018 Accord easily achieved on a recent trip to Ottawa. Somehow that doesn’t gel with the narrative being proposed of China as green siren.

But according to the U of M team, even that calculation doesn’t fully account for a BEV’s total C02 production. According to Sivak, building a BEV results in 15 per cent higher emissions than manufacturing a similarly-sized conventional automobile. For larger vehicles — cue Teslas and upcoming Porsche/Audi products — with larger batteries, the difference is even greater; 68 per cent. Indeed, according to a recent Swedish report, Tesla battery production releases as much CO2 as eight years of gasoline driving. Yes, according to the IVL Swedish Environmental Research Institute, manufacturing every kilowatt-hour of lithium-ion battery storage — the Model S has up to 100 kW-hr — releases 150 to 200 kilograms of carbon dioxide into the atmosphere. In other words, a Model S has accounted for about 17.5 tons of C02 even before it has used a mile of coal-fired electricity.

In other words, the American — and certainly the Chinese — government might be better off spending those hard-to-come-by tax dollars on cleaning up its coal production rather than converting all our cars to batteries.

 

Shore Gold Inc. announces third quarter results

Shore Gold Inc. announces third quarter results

Stock Symbol: SGF: TSX

Saskatoon, SK, Nov. 9, 2017 /CNW/ – Shore Gold Inc. (“Shore” or the “Company”) reports that the unaudited results of Shore’s operations for the three and nine months ended September 30, 2017 will be filed today on SEDAR and may be viewed at www.sedar.com once posted. A summary of key financial and operating results for 2017 is as follows:

Highlights

  • Announced the consolidation of the Fort à la Corne mineral properties (including the Star – Orion South Diamond Project), resulting in Shore holding a 100% interest with Newmont Canada FN Holdings ULC (“Newmont”) increasing its interest to a 19.9% shareholder of the Company;
  • Announced the concurrent Option to Joint Venture Agreement with Rio Tinto Exploration Canada Inc. (“RTEC”) for the Fort à la Corne mineral properties (including the Star – Orion South Diamond Project);
  • Announced the related closing of a subscription by RTEC for 5.6 million Common Shares and 5.6 million Common Share purchase warrants for aggregate gross proceeds of $1.0 million;
  • Announced ten hole HQ core drilling program and geotechnical investigations on the Star Kimberlite
  • Working capital of $1.7 million at September 30, 2017;
  • Issued and outstanding shares of 361,005,822 at September 30, 2017

Overview
Shore is a Canadian natural resource company focused on exploring and developing Saskatchewan’s diamond resources.  The Company, as a result of the recent mineral property consolidation and earn-in agreement (as discussed below), is now in an enhanced position to advance its 100% held Star – Orion South Diamond Project (“Project”), which is situated in the Fort à la Corne kimberlite field in central Saskatchewan. Indicated Mineral Resources for the Project are 55.4 million carats (see SGF News Release dated November 9, 2015 and Technical Report filed December 21, 2015). In addition to the Indicated Mineral Resource Estimate, the Star and Orion South Kimberlites include Inferred Resources containing 11.5 million carats.

Consolidation of the Fort à la Corne mineral properties and Option to Joint Venture
During the quarter ended June 30, 2017, Shore announced that it has acquired (the “Newmont Acquisition”) all of Newmont’s participating interest in the Fort à la Corne joint venture (the “FalC JV”), resulting in Shore owning 100% of the of the Fort à la Corne mineral properties (including the Project), and has concurrently entered into an Option to Joint Venture Agreement (the “Option Agreement”) with RTEC pursuant to which the Company has granted RTEC an option to earn up to a 60% interest in the Fort à la Corne mineral properties (including the Project) on the terms and conditions contained in the Option Agreement (see SGF News Release dated June 23, 2017). Immediately after the closing of the Newmont Acquisition and issuance of common shares, Newmont held approximately 19.9% of the common shares issued and outstanding on a non-diluted basis.

Activities relating to the Star – Orion South Diamond Project
The Company and RTEC recently announced an HQ core drilling program, consisting of ten holes and some 2,500 metres of drilling, on the Star Kimberlite (See SGF News Release dated October 12, 2017). This core drilling is required to accurately document the internal stratigraphy of the Star Kimberlite prior to a proposed sampling program, which is expected to commence in 2018. In conjunction with this diamond drill program, geotechnical investigations on the overburden will also be conducted.

During the nine months ended September 30, 2017, the Company performed geotechnical investigations, assessments and test work that would be required for an updated feasibility study on the Project. The work completed included: X-ray Transmission (“XRT”) recovery of diamonds from Star pyroclastic kimberlite, ore processing data review, diamond parcel characterization, kimberlite particle size analysis and overburden removal investigations. These programs investigate the use of new technology for the efficient excavation of the open pit and improvements to the flow-sheet of the diamond processing plant, while simultaneously reducing pre-production capital costs and the time to initial diamond production.

In January 2017, the Company was informed by the Saskatchewan Minister of Environment that additional consultation is required between the government and First Nation and Métis communities for the government to meet its legal obligation with respect to duty to consult and accommodate process (See SGF News Release dated January 26, 2017). Since that time, the government proceeded with a work plan that enabled them to make significant progress by the end of the third quarter of 2017. The Ministry has indicated to Shore that once consultations with potentially impacted First Nation and Métis communities are completed, all pertinent information will be reviewed before a decision is made under The Environmental Assessment Act.

Quarterly Results
For the quarter ended September 30, 2017, the Company recorded a net loss of $0.6 million or $0.00 per share compared to a net loss of $1.1 million or $0.00 per share for the same period in 2016. The losses incurred during the quarters ended September 30, 2017 and 2016 were due to operating costs and exploration and evaluation expenditures incurred by the Company exceeding interest income earned on cash and cash equivalents and short-term investments.

Year to Date Results
For the nine months ended September 30, 2017, the Company recorded net income of $41.6 million or $0.13 per share compared to a net loss of $4.4 million or $0.02 per share for the same period in 2016. Net income during the nine months ended September 30, 2017 was due to the partial reversal of previously recorded impairments relating to exploration and evaluation assets ($44.5 million). As a result of the Newmont Acquisition, the Company performed an assessment of the carrying value of exploration and evaluation assets. Based on this assessment, the carrying value of exploration and evaluation assets (which includes the Fort à la Corne mineral properties) was determined to be $66.3 million, resulting in a partial reversal of previously recorded impairments. Exploration and evaluation expenditures incurred during the nine months ended September 30, 2017 primarily related to work relating to geotechnical investigations and test work for the Project. The loss during the nine months ended September 30, 2016 was primarily due to ongoing operating costs and exploration and evaluation expenditures incurred by the Company exceeding interest income earned on cash and cash equivalents and short-term investments.

In connection with the Option Agreement, RTEC subscribed for 5.6 million units, for a gross subscription amount of $1.0 million, with each unit consisting of one common share and one common share purchase warrant. In addition, options and broker warrants were also exercised during the quarter ended June 30, 2017 for total cash proceeds of $0.4 million. In connection to the Newmont Acquisition, 53.8 million common shares and 1.1 million common share purchase warrants were issued to Newmont. The Company also agreed that Newmont will receive a contingent payment in the aggregate amount of $3.2 million upon a positive decision being made to develop a mine on the Project.  Shore, in its sole discretion (subject to regulatory approvals), may satisfy the contingent payment due to Newmont through a cash payment or the issuance of common shares. The estimated discounted present value of this contingent consideration at September 30, 2017 was determined to be $0.7 million.

Selected financial highlights include:
Condensed Consolidated Statements of Financial Position As at

September 30,

2017

As at

December  31,

2016

Current assets $  1.8 M $  3.2 M
Exploration and evaluation, capital and other assets 67.6 M 1.5 M
Current liabilities 0.1 M 0.3 M
Premium on flow-through shares 0.1 M 0.2 M
Non-current liabilities 1.4 M 0.6 M
Shareholders’ equity 67.8 M 3.6 M

 

Consolidated Statements of Loss and Comprehensive Loss Three Months
Ended
September 30,
2017
Three Months
Ended
September 30,
2016
Nine Months
Ended
September 30,
2017
Nine Months
Ended
September 30,
2016
Interest and other income $  0.0 M $ 0.0 M $ 0.0 M $ 0.0 M
Expenses 0.6 M 1.2 M 3.0 M 4.8 M
Flow-through premium recognized in income 0.0 M 0.1 M 0.1 M 0.4 M
Reversal of prior impairments to exploration and evaluation assets 0.0 M 0.0 M 44.5 M 0.0 M
Net and comprehensive income (loss) for the period (0.6) M (1.1) M 41.6 M (4.4) M
Net income (loss) per share for the period (basic and diluted) (0.0) (0.00) 0.13 (0.02)

 

Condensed Consolidated Statements of Cash Flows  Nine Months
Ended
September 30,
2017
Nine Months
Ended
September 30,
2016
Cash flows from operating activities $  (2.9) M $ (3.7) M
Cash flows from investing activities (0.6) M 0.1 M
Cash flows from financing activities 2.1 M 1.0 M
Net decrease in cash (1.4) M (2.6) M
Cash – beginning of period 2.8 M 4.0 M
Cash – end of period 1.4 M 1.4 M

 

Outlook
The successful completion of the consolidation of the Company’s Fort à la Corne mineral properties (including the Star – Orion South Diamond Project) and the concurrent earn-in arrangement with RTEC sets the stage for a new phase for the Company. It is the Company’s view that Rio Tinto is one of the few companies in the world with the resources and expertise to move forward with a project of the magnitude of the Star – Orion South Diamond Project. The Company is also very pleased to have acquired the remaining portion of the Project from Newmont and having Newmont as a significant shareholder.

As of November 9, 2017, the Company had approximately $1.4 million in cash and cash equivalents and short-term investments (excluding $0.8 million in restricted cash). A portion of the Company’s cash and cash equivalents and short-term investments will be used to complete the 2017 programs (including remaining flow-through commitments) and advance certain aspects of the Project, including the environmental assessment process and assessment and test work programs required for an updated feasibility study, as well as for general corporate matters.

Caution Regarding Forward-looking Statements

This news release contains forward-looking statements within the meaning of certain securities laws, including the “safe harbour” provisions of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. The words “may,” “could,” “should,” “would,” “suspect,” “outlook,” “believe,” “plan,” “anticipate,” “estimate,” “expect,” “intend,” and words and expressions of similar import are intended to identify forward-looking statements, and, in particular, statements regarding Shore’s future operations, future exploration and development activities or other development plans contain forward-looking statements. Forward-looking statements in this news release include, but are not limited to, statements relating to mineral resources and/or reserves; statements related to the approval of the development of the Star – Orion South Diamond Project; statements relating to future development of the Star – Orion South Diamond Project and associated timelines; the environmental assessment and permitting process; objectives for the ensuing year, including drilling and geotechnical programs and the re-optimisation of the open pit, the optimisation of the Feasibility Study and the anticipated positive change in the economic model for the Project.

These forward-looking statements are based on Shore’s current beliefs as well as assumptions made by and information currently available to it and involve inherent risks and uncertainties, both general and specific.  Risks exist that forward-looking statements will not be achieved due to a number of factors including, but not limited to, developments in world diamond markets, changes in diamond valuations, risks relating to fluctuations in the Canadian dollar and other currencies relative to the US dollar, changes in exploration, development or mining plans due to exploration results and changing budget priorities of Shore or its contractual partners, the effects of competition in the markets in which Shore operates, the impact of changes in the laws and regulations regulating mining exploration and development, judicial or regulatory judgments and legal proceedings, operational and infrastructure risks and the additional risks described in Shore’s most recently filed Annual Information Form, annual and interim MD&A, news releases and technical reports.  Shore’s anticipation of and success in managing the foregoing risks could cause actual results to differ materially from what is anticipated in such forward-looking statements.

Although management considers the assumptions contained in forward-looking statements to be reasonable based on information currently available to it, those assumptions may prove to be incorrect. When making decisions with respect to Shore, investors and others should not place undue reliance on these statements and should carefully consider the foregoing factors and other uncertainties and potential events. Unless required by applicable securities law, Shore does not undertake to update any forward-looking statement that may be made.

SOURCE Shore Gold Inc.

For further information:

shoregold@shoregold.com or (306) 664-2202, www.shoregold.com

This information is being distributed to you by / Cette information vous est transmise par : Shore Gold Inc.

CA, 224 – 4th Avenue SouthSuite 300 Suite 300, Saskatoon, SK, S7K 5M5, Canada
http://www.shoregold.com

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Cameco CEO reassures workers, investors over mine closure

Cameco CEO reassures workers, investors over mine closure

Saskatoon / 650 CKOM
Bryn Levy
Cameco CEO reassures workers, investors over mine closure

A worker at Cameco’s uranium milling operation in Key Lake, Sask. (Cameco)

Cameco president and CEO Tim Gitzel faced questions from media and investors in a wide-ranging conference call early Thursday morning.

The call came after the company announced Wednesday it was suspending operations at its McArthur River uranium mine and its uranium milling operation at Key Lake.

The move will see more than 800 workers placed on a temporary layoff.

Gitzel said the company made the decision in the face of a stubbornly weak global market for uranium.

In 2010, uranium was selling in the $60-a-pound range. The price tanked following Japan’s Fukushima disaster in 2011, and was hovering this week around $20-a-pound.

“The message is very clear that the market does not need more uranium. Behaving in a $20 market the same way we did when uranium prices were much higher, in our opinion, is neither rational nor sustainable,” Gitzel said during prepared remarks before he took questions.

Under current conditions, Gitzel said it made more sense to draw down the company’s inventory to meet its contract obligations, noting Cameco has contracts to sell uranium above market prices for years to come.

Gitzel stressed repeatedly throughout the call that layoffs at McArthur River and Key Lake would be temporary.

He said the company would continue to provide benefits for affected workers and would top-up their Employment Insurance cheques, all as part of efforts to retain staff through the shutdowns.

“These are good, solid people. We need them. (McArthur River) is going to keep running for 20 years,” he said.

Cameco investors will also be feeling some pain amid the poor uranium market conditions, with the company slashing the dividend paid on its stock to 8 cents per share as part of efforts to maintain its cash flow and keep servicing its debts. The dividend had previously been 40 cents per share.

Gitzel said all the company’s decisions were made with a view to maintaining Cameco’s long-term health.

In particular, he said the company was protecting its investment grade from rating agencies — a designation typically given to companies with a credit rating of BBB or better.

Gitzel said those investing in Cameco would be doing so because, in the longer term, the current low market price for uranium is unsustainable, with the company sitting on some of the lowest cost-of-production mines on Earth and well-positioned to take advantage of an eventual turnaround.

Asked if Cameco would consider selling off any of its ownership stakes in its mines, Gitzel gave a forceful vote of confidence in the long-term future for the industry in Saskatchewan.

“Sale of ownership? Not a chance. We’re not looking at that at all. In fact, if some Saskatchewan assets came available that were part of the joint ventures we’re in, we would look at purchasing them.”

The McArthur River and Key Lake shutdowns were expected to take about a month to complete, with some 200 workers kept on to maintain the sites following their anticipated closures at the end of January 2018.

Gitzel said it would also take about a month to get the facilities up-and-running again.

BHP Jansen – timeline clarification

BHP says Jansen will be ‘the first mine in Canada that’s truly attractive to women’

ALEX MACPHERSON, SASKATOON STARPHOENIX

Published on: November 9, 2017 | Last Updated: November 9, 2017 6:00 AM CST

BHP VP potash Giles Hellyer

BHP vice president of potash operations Giles Hellyer speaks in Saskatoon on Wednesday, Nov. 8, 2017. MICHELLE BERG /SASKATOON STARPHOENIX

Amid efforts to achieve a gender-balanced workforce, BHP says its massive Jansen potash mine under construction east of Saskatoon will be the first in Canada that is “truly attractive to women.”

Technology used to make the mine more efficient and cost-effective is also expected to better serve a future workforce that is 50 per cent female, said Giles Hellyer, BHP’s vice-president of potash operations.

“The traditional way we think and view mines does not have to be that way,” the 33-year BHP veteran said after addressing a North Saskatoon Business Association (NSBA) lunch event.

“The nature of the work will change, and I think it will become much, much more interesting to all people of all demographics,” Hellyer said, alluding to the low number of women working in the province’s mining industry.

That means the facility — which is expected to have a final price tag of US$14 billion — will have everything from an equal number of men’s and women’s washrooms to automated mining machines that can be controlled remotely, he said.

BHP has so far committed around US$3.8 billion to Jansen, of which US$2.6 billion is being spent to sink two kilometre-deep mine shafts and build surface infrastructure — work that is now 73 per cent complete.

Located 100 kilometres from Saskatoon, the Jansen project has been plagued with uncertainty. BHP said in August that its board won’t give the project final approval this year, and that the company could wait until markets improve, bring on a partner, or simply sell it.

In his speech to the NSBA, Hellyer emphasized that it is “not uncommon for (BHP) to take a long time to develop large projects like this one.” He said afterward that the company is committed to making the best case possible for Jansen.

Asked when it could go to the board for approval, Hellyer said: “When the timing is right — and that will be a function of when we believe the market dynamics are right and also when … we have spent the time and effort to get the project itself right for their consideration.”

BHP made its commitment to achieve gender balance by 2025 last year. Hellyer said Wednesday that women now make up 33 per cent of its Canadian workforce. By comparison, the Saskatchewan mining industry average is a little over 14 per cent.

While improving that figure won’t be without its challenges, Hellyer said making the company more inclusive is “morally and ethically the right thing to do, and it also has huge business value.”

On Trans Mountain opposition, Burnaby doesn’t have a case

Yedlin: On Trans Mountain opposition, Burnaby doesn’t have a case

DEBORAH YEDLIN, CALGARY HERALD
Published on: November 4, 2017 | Last Updated: November 4, 2017 9:06 AM MDT

Trans Mountain pipes
Pipes are seen at the Trans Mountain facility in Edmonton, Alta., Thursday, April 6, 2017. JONATHAN HAYWARD / THE CANADIAN PRESS

When TransCanada officially announced it was abandoning the Energy East project, which would have transported 1.1 million barrels of oil per day to the East Coast, a significant amount of discussion took place in the days that followed, suggesting the pipeline quagmire could push the country toward a constitutional crisis.

That prediction took one step closer to reality last week, when Kinder Morgan Canada filed a notice of motion regarding its Trans Mountain expansion project, challenging the City of Burnaby on constitutional grounds as it seeks to block the project’s advancement by delaying the issuance of permits.

There is no way Burnaby should be doing this.

The project has received the requisite approvals — even after additional reviews and assessments — from the National Energy Board and the federal government. Since when is that not enough for the public, or other governing jurisdictions, to rely on?

It’s instructive to look at the TMX project in the context of what is going on in China.

It is a country on the move — spending billions in infrastructure to facilitate investment, development and opportunity. There might be valid disagreement about methods and process, but there is a goal and a plan; to become an economic powerhouse and eventually establish the yuan as the global reserve currency.

And in Canada, we can’t even get a pipeline built that would be important for economic growth and business investment.

No, the building of the Three Gorges Dam wasn’t pretty — but it now generates 22,400 megawatts of much-needed, clean electricity. Still, that’s only two per cent of the country’s electricity needs. That presents a huge opportunity for Canada to supply China with liquefied natural gas – but we’re stalled in that department, too.

This is all about playing for the long game, something China has figured out but Canada has long forgotten.

There is no denying the challenges in a “command and control” economy — but our system of laws, contracts and approvals should be enough to move projects, such as TMX, forward.

Burnaby, in failing to grant Trans Mountain the required permits, and which were part of the comprehensive review process that took place at the NEB and on which the federal cabinet relied, is grasping at straws, not to mention causing additional delays.

Here’s why:

Municipalities exist by virtue of provincial legislation. And there is established case law that shows when there is a conflict between federal and provincial laws, federal law takes precedence.

The notice of motion submitted by Trans Mountain to the NEB late last month refers to a B.C. Supreme Court ruling in 2016, which stated provincial governments must issue provincially required permits that are necessary to carry out a federal undertaking; failure to do so conflicts with a federal purpose.

And the NEB has jurisdiction to act on behalf of the federal government by virtue of the NEB Act.

It doesn’t get more complicated than that.

The mayor of Burnaby likes hyperbole.

When there were protests against Kinder Morgan conducting geotechnical tests it had been ordered to do, the mayor famously said, “This is war.” The citizens of Syria and Iraq know what war means — Derek Corrigan does not.

When Kinder Morgan Canada chief executive Ian Anderson paid Corrigan a visit last week, the response was that he was being bullied by Anderson.

While Corrigan can technically say Burnaby has not turned down the requests for permits, because it hasn’t, the fact Kinder Morgan has been waiting 22 weeks compared with the standard six-week timeframe clearly suggests the city is obfuscating.

Missing is the understanding that when a project is approved, it includes both approval for the project itself and the timing; they are not mutually exclusive.

As stated in the notice of motion, and supported by prior Supreme Court rulings at both the provincial and national level, “A municipality cannot lawfully deny a permit application for a federal undertaking … allow them to manoeuvre out of their duty to issue permit by imposing unreasonable requirements and delays allows them to impair the core of the federal authority thereby doing indirectly what they cannot do directly ….

“Burnaby is improperly exercising control over whether and when the project (TMX) will proceed. The timing of the project was clearly a part of the public interest determination. This amounts to an unconstitutional exercise of its power.”

As Premier Rachel Notley said this week, when the Alberta government announced it would be intervening at the NEB to force Burnaby to issue the requisite permits to Kinder Morgan, one jurisdiction – and a municipal one at that – has no right to obstruct the construction of a project this important to the country.

But it gets better, because Burnaby and its mayor appear to be suffering from amnesia.

When Kinder Morgan was prevented from carrying out its geotechnical work in 2014, it took similar action: submitted a notice of motion to the NEB seeking an order for Burnaby to allow the geotechnical work to proceed. Then, like now, it included notice of a constitutional question.

The NEB ruled in favour of Kinder Morgan. The work took place.

All this calls into question the response by former justice Thomas Berger submitted this week. Berger is seeking to dismiss the Kinder Morgan request for the timely issuance of permits – but in doing so is blatantly ignoring the fact the timing of the project was part of the national interest determination; Kinder Morgan is seeking certainty of process. One could argue Berger is the reason we have been hamstrung on pipelines since his 1977 report that effectively killed the Mackenzie Valley pipeline.

A constitutional crisis triggered by a pipeline? Sadly, it’s entirely in the realm of possibility.

Deborah Yedlin is a Calgary Herald columnist.

 

 

 

Agrium sells U.S. plants to ease Potash merger concerns

Handout

Agrium Corporate Office in Calgary, Alta.

Canadian fertilizer producer and farm supplier Agrium Inc said on Tuesday it will sell its Idaho phosphate production facility for $100-million to fertilizer company Itafos, to address concerns of U.S. regulators about its merger with Potash Corp of Saskatchewan.

Separately, Agrium will sell its North Bend, Ohio, nitric acid plant to a subsidiary of Trammo Inc for an undisclosed price.

The combination of Agrium and Potash Corp is expected to close by year-end, and requires U.S. approval. Agrium did not specify what concerns U.S. regulators have, but Potash is already one of the biggest U.S. phosphate producers.

Earlier on Tuesday, China’s commerce ministry said it has approved the merger on the condition that Potash divest certain stakes in other companies.

Agrium’s U.S. listed shares fell 1.7 per cent to $106.01.

Under the deal, Itafos gets Agrium’s Conda, Idaho, phosphate production plant and adjacent mineral rights. The deal includes an agreement for Agrium to supply ammonia to the Conda facility and buy the monoammonium phosphate it produces.

Agrium said it will take a $178-million impairment charge on the Conda sale and retain its historic environmental obligations.

Agrium’s sales to both Itafos and Trammo are subject to approval by the U.S. Federal Trade Commission, the company said.

The merger combines Potash Corp’s fertilizer production capacity, the world’s largest, with Agrium’s network of farm supply stores, the biggest in the United States.

Hot oil markets ignite speculation around Cenovus deal – in Weyburn SK for $1-billion or more

Hot oil markets ignite speculation around Cenovus deal

CENOVUS ceo Nov 2017
Last week, departing Cenovus CEO Brian Ferguson, shown in this file photo, would not say when asked how many parties have looked at the property.

CHRIS BOLIN/THE GLOBE AND MAIL

JEFFREY JONES AND JEFF LEWIS

CALGARY

NOVEMBER 6, 2017

 

Cenovus Energy Inc. is expected to announce a deal shortly to sell its interest in a major Saskatchewan oil project just as surging crude prices rekindle industry interest in attractive energy properties.

The Weyburn project, with a price tag estimated at $1-billion or more, is the last of four large assets Cenovus had earmarked for sale to reduce debt taken on to fund its acquisition earlier this year of ConocoPhillips Co.’s Alberta oil sands and natural gas assets.

Several companies that have their production skewed to oil, rather than natural gas, are thought to be possible bidders for the assets – some as sole entities and others in partnerships with private-equity sources or pension funds.

Such investors covet the long-term, steady returns and low rate of production declines that the enhanced oil project delivers.

A 16-per-cent rise in U.S. oil prices over the past month is seen as supportive to potential buyers and their financing plans.

Deal interest is said to be picking up as oil prices climb to more than two-year highs amid a string of high-profile arrests in Saudi Arabia over the past weekend in an anti-corruption crackdown, and as markets tighten.

West Texas intermediate cruce closed up 3 per cent on Monday at $57.35 (U.S.) a barrel.

An improving oil market could open up capital markets for the oil patch, allowing financing for deals, after months of being out of favour.

Spartan Energy Corp. and Whitecap Resources Inc. have both been rumoured as bidders for Weyburn, though such a deal would be a big undertaking, especially for the former, whose market capitalization is about $1.2-billion (Canadian).

Spartan did not respond to a request for comment on Monday. It gained an ownership interest in Weyburn last year as part of a $700-million acquisition of oil assets from ARC Resources Ltd.

For its part, Whitecap, with a market cap of about $3.6-billion, is one of few companies to have successfully raised large sums in equity issues during the downturn. Whitecap chief executive officer Grant Fagerheim did not respond to a request for comment.

On Monday, GMP FirstEnergy analyst Michael Dunn speculated that Husky Energy Inc., with $2-billion of cash in hand and a strong balance sheet following its own asset sales, could also be in the running. A Husky spokesman declined to comment.

Cona Resources Ltd., led by former investment banker Adam Waterous, is also said to have made it to the final stages of bidding.

The Weyburn project, located in southeastern Saskatchewan, produces about 24,000 barrels of oil a day, with the aid of carbon dioxide that is piped in from North Dakota. It is known as the world’s largest CO2 capture-and-utilization storage project. Cenovus is operator and has a 62-per-cent stake in the complex venture, and its share of output is around 15,000 barrels a day. Several analysts have pegged the interest’s value at $1-billion or more.

Last week, Brian Ferguson, Cenovus’s departing CEO, would not say when asked how many parties have looked at the property. But he described the sales process as very competitive. Bids were due in mid-October and industry sources said the company was in talks with the winning bidder.

“It’s a very attractive asset,” Mr. Ferguson told analysts on a conference call. “And all the parties that are in the process I would characterize as substantive parties that are well-financed.”

The company has said it is targeting a deal to be announced by the end of this year. Spokesman Brett Harris declined to say Monday if an agreement is imminent.

So far, Cenovus has garnered $2.8-billion from sales of its Pelican Lake, Suffield and Palliser oil-and-gas properties, helping to rebuild investor confidence, which took a hit following the $17.7-billion ConocoPhillips deal owing to the sudden build-up of debt.

Mr. Ferguson was replaced as chief executive of Cenovus on Monday by Alex Pourbaix, a onetime TransCanada Corp. executive. Despite the leadership change, executives indicated last week that a strategic pivot was not on tap.

Still, the company is likely to put more assets on the block to meet its targeted range of $4-billion to $5-billion in sales by the end of the year. It plans to unveil its budget for 2018 in December, while also providing more detail around potential asset sales in the Deep Basin region of Alberta.

China commerce ministry conditionally approves Potash-Agrium merge

NOVEMBER 6, 2017 / 9:19 PM

China commerce ministry conditionally approves Potash-Agrium merger

Reuters Staff

 Nutrien logo - merger of PotashCorp and Agrium

BEIJING (Reuters) – China’s commerce ministry said on Tuesday it has granted conditional regulatory approval to the proposed $25 billion merger between fertilizer companies Agrium Inc (AGU.TO) and Potash Corp of Saskatchewan Inc PTO.TO.

The ministry, in a statement, said the merged entity should divest some assets including those in Israel and Chile. The merged entity also cannot acquire stakes in industry competitors for five years without regulatory approval, it added.

Reporting by Beijing Monitoring Desk; Editing by Kenneth Maxwell

 

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