Category Archives: diamonds
BHP presents united front against activist Elliott
OCTOBER 19, 2017 / 11:23 AM / UPDATED AN HOUR AGO
By Barbara Lewis and Zandi Shabalala
LONDON, Oct 19 (Reuters) – The new chairman of BHP , the world’s biggest miner, threw his weight behind his CEO on Thursday after attacks from activist investor Elliott Advisers prompted speculation that the end of Andrew Mackenzie’s tenure was imminent.
Pressure has mounted on BHP and its chief executive since Elliott went public in April with its criticisms of the miner’s strategy.
“Any suggestion there is a set timeline around Andrew’s tenure is simply false and without merit,” Chairman Ken MacKenzie told reporters after his first AGM since taking office at the start of September.
Asked by a shareholder whether it was Elliott or the BHP board that was running the company, the chairman replied that “MacKenzie and Mackenzie” were running BHP, though he did not specify the order of the pair who share the same names but with slightly different spelling.
At least five representatives from Elliott Advisors, which holds 5 percent of BHP, attended the London meeting but did not ask questions from the floor.
Elliott declined to comment on Thursday, though it has welcomed the new chairman’s appointment.
Chairman MacKenzie said he had met more than 100 shareholders across eight countries, which he said gave him confidence, though he added that there are areas where the company needs to sharpen its focus.
He reiterated that work is in progress to sell shale assets, which is one of Elliott’s main demands, and that further action would take place to refresh the board of directors.
“We recognise that the board needs to continue to evolve to take into account the rapidly changing environment in which we operate. So we will undertake a review of the board’s skills and experience requirements during this financial year,” he said.
BHP’s London share price has risen nearly 7 percent since the start of the year, about half as much as that of its main rival Rio Tinto.
Both the chairman and the CEO said they were striving to maximise shareholder value and that meant that shale assets would be sold only at the right price.
“We will be both urgent and patient as we examine all the options,” CEO Mackenzie said. “We have to get the timing right to maximise shareholder value.”
BHP’s big rival Rio Tinto suffered a setback this week when the U.S. Securities and Exchange Commission (SEC) charged the company and two of its former executives with inflating the value of coal assets in Mozambique and concealing critical information. The company said it would defend itself vigorously against the allegations.
Chris LaFemina, a mining specialist at Jefferies bank, said he had preferred Rio over BHP for the past two years.
“While our preference has not changed, BHP’s competitive position has modestly improved,” he said in a note.
“New chairman Ken MacKenzie seems willing to push for significant strategic changes at BHP … after years of unacceptable underperformance of its share price versus Rio‘s.” (Editing by Elaine Hardcastle and David Goodman)
Star – Orion South Diamond Project Core and Geotechnical Drilling Scheduled to Commence Mid-October
Stock Symbol: SGF: TSX
SASKATOON, Oct. 12, 2017 /CNW/ – George H. Read, P. Geo., Senior Vice President Exploration and Development of Shore Gold Inc. (“Shore” or the “Company”) is pleased to announce that Shore and Rio Tinto Exploration Canada Inc. (“RTEC”) have scheduled an HQ core drilling program, consisting of ten holes and some 2,500 metres of drilling, on the Star Kimberlite, to commence in mid-October 2017. This core drilling is required to accurately document the internal stratigraphy of the Star Kimberlite prior to a proposed large diameter drilling (“LDD”) mini-bulk sampling program, which is expected to commence in 2018. The core drilling program is being conducted by George Downing Estate Drilling Ltd. of Grenville, Quebec. Shore and RTEC geologists are responsible for the supervision of the drilling program and subsequent detailed core logging. In conjuction with this diamond drill program geotechnical investigations on the overburden are being conducted by Paddock Drilling of Brandon, Manitoba and ConeTech of Richmond, B.C. The ten hole locations that have recently been selected are in close proximity (10 to 15 metres) to the underground bulk samples and past 48 inch LDD holes and include areas of significant intersections (80 – 110 metres) of the Early Joli Fou (“EJF”) Kimberlite, the principal economic unit the Indicated Resources previously estimated by Shore for the Star Kimberlite in December 2015.
Senior Vice President Exploration and Development, George Read, states: “This core and geotechnical drilling program is an important precursor to a proposed LDD mini-bulk sampling program scheduled to commence in 2018. The selected locations of these core holes will act as pilot holes for the upcoming program.”
The Star-Orion South Diamond Project (the “Project”) is located in central Saskatchewan some 60 kilometres east of the city of Prince Albert. The Project is in close proximity to established infrastructure, including paved highways and the electrical power grid, which provide significant advantages for future mine development. The Technical Report on the Revised Resource Estimate for the Project dated November 9, 2015 provided an updated Mineral Resource Estimate for the Star and Orion South kimberlite deposits: Indicated Mineral Resources of 393 million tonnes containing 55.4 million carats of diamonds at a weighted average price of US$210 per carat. In addition to the Indicated Mineral Resource Estimate, the Star and Orion South Kimberlites include Inferred Resources containing 11.5 million carats. Accordingly, the mineral reserves and economic assessment previously disclosed by Shore for the Project should no longer be relied upon. Shore 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). Completion of the proposed 2018 sampling program (First Option) does not entitle RTEC to an interest in the Fort à la Corne mineral properties (including the Project).
All technical information in this press release has been prepared under the supervision of George Read, Senior Vice-President of Exploration and Development, Professional Geoscientist in the Provinces of Saskatchewan and British Columbia, and Mark Shimell, Project Manager, Professional Geoscientist in the Province of Saskatchewan, who are the Company’s “Qualified Persons” under the definition of NI 43-101.
Shore is a Canadian based corporation engaged in the acquisition, exploration and development of mineral properties. Shares of the Company trade on the TSX Exchange under the trading symbol “SGF”.
Caution Regarding Forward-Looking Statements
This news release contains forward-looking statements as defined by certain securities laws, including the “safe harbour” provisions of Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward-looking information is often, but not always, identified by the use of words such as “anticipate”, “believe”, “expect”, “plan”, “intend”, “forecast”, “target”, “project”, “guidance”, “may”, “will”, “should”, “could”, “estimate”, “predict” or similar words suggesting future outcomes or language suggesting an outlook. In particular, statements regarding Shore’s future operations, future exploration and development activities or other development plans constitute forward-looking statements. By their nature, statements referring to mineral reserves, mineral resources or TFFE constitute forward-looking statements.
Forward-looking statements in this press release include, but are not limited to statements with respect to the proposed core drilling program (including the number of holes to be drilled, the metres to be drilled, the timing of the drilling and the duration of the program), the proposed geotechnical program and Shore and RTEC’s objectives for the ensuing year, including the proposed 2018 sampling program.
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 prices, 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 joint venture partners, the effects of competition in the markets in which Shore operates, the impact of changes in the laws and regulations regulating mining exploration, development, closure, 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. 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 is made herein.
SOURCE Shore Gold Inc.
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SHORE GOLD INC. ANNOUNCES THE RESULTS OF THE 2017 ANNUAL AND SPECIAL MEETING OF SHAREHOLDERS
Shore Gold Inc. (“Shore” or the “Corporation”) (TSX – SGF) is pleased to announce that all of the nominees listed in the management proxy circular dated July 28, 2017 were elected as directors of the Corporation at its annual and special meeting of shareholders held on September 6, 2017 (the “Meeting”).
In addition, shareholders also approved at the Meeting:
- -a resolution to re-appoint KPMP LLP as the Corporation’s independent auditors;
- a resolution to amend the Corporation’s articles of incorporation to change the name of the Corporation;
- a resolution to restate the Corporation’s articles of incorporation; and
- a resolution regarding the continuation of the Corporation’s amended and restated Shareholder Rights Plan.
Detailed results of the vote for the election of directors held at the Meeting are set out below:
Nominee Votes For Votes Withheld Number % Number %
- Kenneth MacNeill 139,806,623 83.96% 26,699,657 16.04%
- Harvey Bay 138,143,576 82.97% 28,362,704 17.03%
- Arnie Hillier 136,337,120 81.88% 30,169,160 18.12%
- Ewan Mason 163,984,692 98.49% 2,521,588 1.51%
- Neil McMillan 141,002,254 84.68% 25,504,026 15.32%
- Brian Menell 165,021,250 99.11% 1,485,030 0.89%
- Peter Ravenscroft 165,579,587 99.44% 926,693 0.56%
- Michael Ryer 164,287,935 98.67% 2,218,345 1.33%
The Company was advised that certain individuals had been appointed as proxyholders by a significant number of shareholders. Based on legal advice, the Chairman assessed that the solicitation of these proxies was not done in accordance with applicable laws in Canada regulating public companies. It was the Chairman’s view that, in soliciting proxies in this fashion, it was unfair to the shareholders of the Company as a whole in that only those shareholders who were solicited in this fashion were aware that a proxy contest was underway, which is the type of conduct the proxy solicitation rules preclude, in that they require that all shareholders have the same information in making their voting decision. It was clearly communicated at last year’s Meeting that to maintain the integrity of the Corporation’s voting procedures, all parties must comply with the law and any failure to comply with the law in the future will result in those votes being struck. Although these votes were inconsequential to the results, these individuals were warned last year. As a result, the Chairman disallowed these votes, resulting in 11,824,531 votes not being allowed to stand.
The name and trading symbol change will not come in to effect until certain regulatory step occur, as well as other
preparations required by the Corporation; a further press release will be issued when the name change becomes effective.
Voting results for all matters will be posted on SEDAR at www.sedar.com.
Shore is a Canadian based corporation engaged in the acquisition, exploration and development of mineral properties. Shares of the Company trade on the TSX Exchange under the trading symbol “SGF”.
– END –
Concerned Shore Gold shareholders fail to oust directors at annual meeting
ALEX MACPHERSON, SASKATOON STARPHOENIX
Published on: September 6, 2017 | Last Updated: September 6, 2017 5:39 PM CST
The chairman of a Saskatoon-based diamond exploration and development company says he hopes a decisive voting result at its annual meeting signals that the “frustration and dissatisfaction” expressed by some dissident shareholders is a thing of the past.
Brian Menell spoke moments after Shore Gold Inc. shareholders voted to change the firm’s name to Shore Diamond Corp. and elect to its board eight directors — including five incumbents — recommended by management.
“I think the source of frustration for many of our shareholders in the past has been the slow pace of finding a solution to move the project forward,” Menell said after the meeting. “We’ve now found a solution to move the project forward.”
That solution is an option agreement worth up to $75 million over seven years, which could result in a Rio Tinto Group subsidiary earning a 60 per cent stake in Shore Gold’s Star-Orion South diamond project east of Prince Albert.
The meeting was expected to mirror the company’s 2016 event, in which the SGF Shareholders Association Inc. — a group concerned about the company’s direction — came within a few percentage points of unseating three Shore Gold directors.
That did not happen. Although the company deemed some of the proxy votes present at the meeting illegitimate and did not allow them to stand, Menell said that “wouldn’t have made any difference anyway” to the final tally electing the eight directors.
SGF Shareholders Association chairman David Wright said after the meeting that with around 90 per cent of voting shares at the meeting out of the association’s hands, the concerned shareholders had little expectation of a positive result.
“This was pretty much largely what we thought was going to happen today — no surprises here,” Wright said, noting that the association will ask its members what its next steps should be at a meeting sometime this fall.
The nearly two-hour event ended with a question-and-answer session during which Shore Gold CEO Ken MacNeill and senior vice president of exploration and development George Read struck an upbeat tone about the company’s prospects.
They said Shore Gold, which has been trying to build a diamond mine in the Fort à la Corne forest since 1995, remains committed to working with Rio Tinto and significantly reducing the mine’s capital cost — estimated in 2011 at $2.5 billion.
Shore Gold is also waiting for environmental approval from the Government of Saskatchewan, and it is not clear when that will come. The federal government granted environmental approval for the massive open-pit mine project in 2014.
“My enthusiasm is increased as a result of the fact that we have got a big partner with the will, the appetite and the capacity to, in partnership with us, develop a producing mine in Saskatchewan,” Menell said of the recent deal with Rio Tinto.
Shore Golf is expected to publish the voting results, including those proxies that were deemed illegitimate, today.
Showdown with concerned shareholders expected at Shore Gold meeting
ALEX MACPHERSON, SASKATOON STARPHOENIX
Published on: August 24, 2017 | Last Updated: August 24, 2017 6:00 AM CST
An aerial view of Shore Gold Inc.’s Star-Orion South diamond project east of Prince Albert. SHORE GOLD INC.
A Saskatoon diamond exploration and development company’s annual meeting next month is shaping up to be another showdown between management and a group of concerned shareholders who want to shake up its board of directors.
Shore Gold Inc., which has spent the last two decades working to build a diamond mine east of Prince Albert, recently signed an option agreement with a Rio Tinto Group subsidiary worth up to $75 million in exchange for up to 60 per cent of the project.
However, the head of the SGF Shareholders Association Inc. (SGFSA), which was formed with the aim of improving communication between the company and its investors, said he doesn’t expect the deal to dampen support for its latest attempt to oust some directors.
David Wright said while it’s hard to say how each of the company’s investors reacted to the deal, he believes many are not happy with it and that it has not been reflected in the company’s share price, which hit a five-year-high of $0.44 before the deal was unveiled.
“At the end of the day, the one and only — and ultimate — judge of success or failure of any company is based pretty much entirely on its share price,” Wright said, noting that the company’s share price has since fallen back to just over $0.20 per share.
In a letter sent earlier this month, the SGFSA executive recommended its members on Sept. 6 “withhold” their votes from all but one of the company’s incumbent directors and vote for three new directors proposed by Shore Gold, plus two nominated independently.
At the company’s last annual meeting, Wright led an attempt to oust three of the company’s directors. The vote came within a few percentage points of succeeding but was subsequently deemed illegal by Shore Gold’s chairman, who nevertheless allowed it to stand.
Shore Gold’s executives said in an email to the Saskatoon StarPhoenix that the deal with Rio Tinto “sets the stage for a new phase for the company,” and that the firm’s current independent directors believe the nominees proposed by the firm are an excellent fit.
“Management and the board make decisions for the Company based on their view of the best interests of the company and all shareholders. We are extremely pleased to partner with Rio Tinto to further develop the potential of the project.”
Ken MacNeill, the company’s longtime president and chief executive who is also a non-independent director of the company, added in the email that he is always happy to meet with Shore Gold shareholders and that the same offer has been extended to the SGFSA.
Shore Gold’s shareholders are also expected to vote at the meeting on a proposal to change the company’s name to Shore Diamond Corp. In their letter to members, SGFSA executives recommended voting for the change.
BHP’s New Chairman Heralds Era of Tougher Focus on Spending
By David Stringer
August 22, 2017, 6:02 PM CST August 23, 2017, 2:43 AM CST
Montreal-born Kenneth MacKenzie, 53, who takes up the post next month, is viewed by investors and analysts as more likely to focus on investment returns, after influencing BHP’s decisions to exit shale and delay proceeding on the $4.7 billion first phase of the Jansen project in Canada.
“They are talking more now about prioritizing projects based on return on capital,” according to Craig Evans, a Sydney-based portfolio manager at Tribeca Investments Partners Pty., a BHP shareholder and one of the miner’s more vocal critics in recent months. “I’d like to think this is the emergence of a bit more rigor on capex — and that’s coming from the new chairman.”
MacKenzie, appointed to BHP’s board last September and credited for doubling the market value of Australia’s largest packaging company, Amcor Ltd., in a decade-long spell as chief executive officer that ended in 2015, has met in recent weeks with more than 100 investors on a global tour that’s taken in Australia, the U.S. and the U.K.
A willingness to listen to shareholders was again apparent in board changes announced Wednesday. Grant King, the ex-Origin Energy Ltd. CEO appointed as a director in March, decided not to stand for election later this year “owing to concerns expressed by some investors,” according to a BHP statement. Fellow director Malcolm Brinded also opted to step down from October.
The producer’s strategy shift shows “an emergence of the rhetoric we’re going to see from Ken, in terms of where things are going to need to sit on the priority scale to have capital allocated to them,” Tribeca’s Evans said in an interview Tuesday. Melbourne-based BHP declined to comment.
BHP’s shares added 0.2 percent to A$26.04 in Sydney on Wednesday. Its bonds also climbed, with the 750 million euros of hybrid notes rising almost 1 cent on the euro to 119 cents, the highest since they were sold in 2015, according to data compiled by Bloomberg. The company’s 3 percent bonds due in May 2024 climbed almost 1 cent to 116 cents, the biggest gain in more than a year.
BHP’s CEO Andrew Mackenzie set out plans to improve returns and capital allocation in a speech in May 2016 and insisted Tuesday in an interview with Bloomberg Television that the decisions on shale and potash had been under consideration for several years, and weren’t a response to investor activism.
Paul Singer’s Elliott Management Corp., which began a public campaign in April urging BHP to overhaul its portfolio and boost payouts, last week backed MacKenzie as a chairman likely to heed shareholders’ calls for improvements. Elliott didn’t respond to a request for comment.
While BHP forecasts capital expenditure will rise about a third to $6.9 billion in the 12 months through June 2018, it has pledged to hold project spending to less than $8 billion annually through 2020, a fraction of the $23 billion total it deployed at its peak in 2013.
The producer should toughen its spending criteria and only develop projects that will deliver returns above 15 percent, Sydney-based Deutsche Bank AG analyst Paul Young said in a report last week. Aside from mothballing Jansen, BHP should also show caution on a potential $5 billion expansion of the Olympic Dam copper mine in Australia, according to Young.
BHP wants to improve the company’s average return on capital employed to about 20 percent by fiscal 2022 from 10 percent in the year ended in June, Chief Financial Officer Peter Beaven said Tuesday in a presentation. “There is still much more to be done, and this is where we’re focusing our efforts,” he told analysts on a conference call.
MacKenzie’s appointment to replace Jacques Nasser, who has led the miner’s board since 2010, shows “a radical shift in strategy,” Sanford C. Bernstein Ltd.’s London-based analyst Paul Gait wrote in a note last month.
“It’s difficult not to see that in some of these changes,” Gait said by phone on Tuesday. “A focus on returns, on better capital allocation and tighter investment criteria are going to play a huge role on his watch.”
“That’s what he is known for — his reputation is predicated on maximizing returns on capital, and holding management teams to account,” said Gait.
Wesfarmers Ltd.’s outgoing finance director Terry Bowen and ex-BP Plc executive John Mogford will be appointed to BHP’s board from October, the producer said in its statement Wednesday. Bowen’s tenure at Wesfarmers has been noted for “a focus on improved cashflow and cost efficiency,” BHP said.
Ex-Royal Dutch Shell Plc exploration chief Brinded, a BHP director since 2014, chose to stand down as a result of “ongoing legal proceedings in Italy relating to his prior employment,” BHP said. Shell and Eni SpA are the subject of scrutiny over the acquisition of an offshore oil field in the Gulf of Guinea.
Technology set to unleash mining innovation – Anglo’s O’Neill
16th August 2017 BY: MARTIN CREAMER
CREAMER MEDIA EDITOR
JOHANNESBURG (miningweekly.com) – In the next ten years, technology is set to unleash a wave of mining innovation, with the sweet spot centred on changing the thinking around orebodies and processing plants rather than much-spoken-about automation.
“Our focus has changed from hunting technologies to hunting value,” Anglo American technical director Tony O’Neill told Creamer Media’s Mining Weekly Online in an exclusive interview.
Three-dimensional metal printing, nonexplosive breakage of rock and microwave preconditioning of rock, as well as medical imaging equipment, are finding rapid application in mineral mining and processing.
The word in the industry is that mining companies that embrace the new era will be successful and the ones that do not will ultimately not survive. Anticipated are mines with footprints that can more readily coexist alongside a community in much the same way as farming.
The good news is that pathways are already starting to develop that change the current mining and processing paradigm.
Technologies are being reconfigured to make mining and processing far more precise, which offers massive potential reward.
Currently, much larger volumes of waste are brought to surface, compared with the scenario more than a century ago. This is because, outside of safety improvements, old methods are still being used today. For instance, in 1900, to obtain 40 kg of copper, 2 t of material had to be mined using 3 m3 of water and 10 kWh of energy, compared with currently having to mine 16 times more material, using 16 times more energy and drawing on double the volume of water.
“It’s risen at such a rate that it’s becoming unsustainable,” O’Neill commented to Mining Weekly Online.
While mining was, in the past, content to be a research and development laggard, other industries were not – and they shot ahead on the technological front, proving up technology that is now available off the shelf for mining to implement.
A successful pilot plant is already pointing the way for the more widespread introduction of coarse-particle recovery, which brings considerably larger-sized particles to surface and slashes water use.
Moreover, with the maturing of robotics technology, research is also being conducted into the introduction of swarm robotic mining, involving the use of small robots that will bring ultra-precision to a hugely wasteful industry.
As more precise mining methods gather momentum, those 40 kg of copper used to illustrate mining’s deteriorating position may one day be mined without any waste at all.
Coarse-particle recovery and advanced fragmentation (using smart blasting technologies) are good examples of putting existing technologies into new configurations to deliver value right now.
None of the technologies used is unproven, but what Anglo has managed to do is configure them in a way that adds immense value, with minimal additional capital investment.
While technology will have to be honed specifically for mining at some stage, a surfeit of technologies is ready for instant application.
“It’s more about a mindset change than having to make massive investments,” Anglo American technology development head Donovan Waller added to Mining Weekly Online.
Much of the improvement is being driven by data science and the modern world’s ability to analyse increasing volumes of data to a very high degree.
Virtually all the technologies needed have come of age; one of the biggest being the stabilisation of information technology, in which other industries have tended to advance much faster than the mining industry. These other industries include consumer electronics, manufacturing, automotive engineering and the pharmaceutical sector.
The coarse-particle recovery process captures coarse particles that are not recoverable using conventional flotation.
By needing to grind to only 500 micron instead of 170 micron, capacity is increased. Less energy is required in the crushing and grinding and water is more easily extracted from the larger particles and then recycled, significantly reducing the need for fresh water. The extraction of interstitial water results in a dry product, which can be dry-stacked, ultimately eliminating the need for tailings dams.
In copper, coarse-particle flotation has the potential to change the cost curve of the industry by allowing for 30% to 40% more throughput at a recovery loss of 2% to 3%, a 20% energy saving and 30% to 40% less water.
This is already a significant achievement for Anglo American in copper, and the company is hopeful of migrating it to other commodities, including platinum in South Africa, where testwork is still at an early stage.
If, for example, platinum ore can be pre-sorted in advance and be presented at a grade of 10 g/t instead of 4 g/t, output can be increased by two-and-a-half times from the exact same capital invested.
SWARM ROBOTIC MINING
Swarm robotic mining descales mining to make it much more precise, mimicking the actions of a swarm of locusts devouring a field or an army of ants working independently to execute tasks.
The technology envisages highly selective mining of ore types linked to real-time algorithms across a broad spectrum that includes constraints in energy, prices and associated issues.
As many people as possible are taken out of harm’s way in a remotely controlled environment.
Small operational teams will communicate with each other, without the need for a big-brother view from the surface that controls each of those small operational elements independently in self-learning operations.
Currently, the industry spends a lot of time adding water to its processes and even more time trying to get the water out afterwards.
A pathway has been developed to end up with a waterless mine through the adoption of a closed loop, using only a fixed amount of water that is then recycled time and again. Anglo already recycles or re-uses more than 60% of its water requirements.
Ultimately, the aim is to arrive at potentially chemical means that allow for the liberation of particles without having to add water to them, to arrive at a waterless process.
SUN, WIND, GRAVITY AND SMALL, GREEN NUCLEAR
In terms of energy, the focus is on using renewables for energy self-sufficiency.
The solutions will be a combination of sun and wind. As the sun does not shine at night and the wind does not always blow, other energy forms, including gravity, will take advantage of the mining sector having depth as one of those solutions.
Ultimately, nuclear may be incorporated should it become “greener”, smaller and more modular, as is expected.
Instead of spending billions to build one big plant, small modular plants will be built and scaled up quickly, with the lifespan of the modules being influenced by the next step up in technology.
Mines will move away from using the same technology for long periods of time and outlaying large capital expenditure on plants that last for 50 years and more.
Smaller, modular, cheaper units will allow for technology upgrades every five years, providing scalability as well as the opportunity to ramp up on new technology that has arisen.
Although mining is not an industry that has been used to technological change, there is no reason why it should not, from now on, accelerate advancing technology quickly, as other industries do.
“Our FutureSmart Mining programme is about far more than technologies alone. It is end-to-end innovation, in its broadest sense, addressing all aspects of sustainability for the business – safety, health, the environment, the needs of our communities and host governments, and the reliable delivery of our products to customers. Those that innovate and are agile will thrive in this industry. That is mining’s new future.” O’Neill concluded.
Miners Built on Wildcat Culture Now Want to Share the Risk
By Thomas Biesheuvel
August 10, 2017, 5:00 PM CST August 11, 2017, 2:07 AM CST
- Chastened by metals slump, new projects idle awaiting partners
- Industry made by swashbuckling gamblers ‘has lost its nerve’
Swashbuckling gamblers abound in the mining business, where billions are spent searching for mother lodes in some of the most inhospitable places on the planet. But a prolonged slump in metals and big losses on earlier solo projects are turning top producers into risk-avoiding wallflowers.
“The mining industry has lost its nerve,” said Mark Bristow, chief executive officer of Randgold Resource Ltd., a London-listed producer of gold in Africa. “The new fad in town is joint ventures. It’s very strange if you’re a major miner. They should be comfortable in their ability.”
At a time when prices are recovering — helping to make new projects viable again — metals producers including Anglo American Plc, BHP Billiton Ltd. and Rio Tinto Groupare seeking partners to share the investment risk rather than going it alone as they have in the past. While the more-cautious approach is a consequence of the near-death experience of the 2015 commodity crash, it could limit the payoff for shareholders during a metals rally.
The shift to more conservative financing comes as the industry confronts a core dilemma: the richest mines in the safest or most-accessible places have mostly been found and built. That means companies are increasingly looking to develop ore bodies that are of lesser quality and may be in higher-risk countries.
“They have to spend more to mine less,” said Rob Crayford, a fund manager at CQS Asset Management Ltd.’s New City Investment Managers in London. “A lot of the projects out there aren’t that great.”
Still, while prices remain well below their post-recession peaks, they’re up enough in the past year or so for companies to consider dusting off expansion plans they shelved during the glut. The London Metal Exchange index of six base metals, including copper and aluminum, has rallied almost 50 percent from a low in January 2016. Gold is heading for the biggest annual gain since 2010, and iron ore has almost doubled from the all-time lows reached in 2015.
S&P Global Market Intelligence estimates that exploration drilling for metals has risen for five straight quarters, off to its fastest start to a year since 2009, and there are signs the pace is accelerating.
Anglo American, a London-based producer that has been mining metal for more than a century, says its No. 1 new project is the giant Quellaveco copper deposit in Peru. But the company wants a partner before development starts, and says it will seek joint ventures for all future new mines, known as greenfield developments.
Melbourne-based BHP, the world’s largest mining company, is set to commit to the $13 billion Jansen potash mine in Canada after years of study, but says it wants to bring in a partner to help share the risk. London-based Rio Tinto also is seeking partners for future developments, while Glencore Plc says it won’t build any new mines at all.
“I’m not excited about greenfield,” said Chief Executive Officer Ivan Glasenberg, noting that over-development in years past created the oversupply and low prices that led to huge losses for the industry. “Unless something changes in the world, I don’t see Glencore doing greenfield for awhile.”
Acquisitions are more likely, Glasenberg said, because it doesn’t make sense to “bring new tons into the market which cannibalizes your existing production.”
The industry is still smarting from the self-inflicted wounds. Anglo’s giant Minas Rio iron-ore mine in Brazil cost $14 billion to buy and build, but it became an expensive mistake as prices plunged by more than half. Barrick Gold Corp., the largest bullion producer, spent $8.5 billion on the Pascua Lama project high in the Andes that has been stalled since 2013. The company recently signed a deal with China’s Handong Gold Group that may lead to a joint venture on the project.
It’s not just new mines that are making the industry more cautious. Some companies made investment mistakes that compounded the losses when prices fell. BHP has said its $20 billion spending on shale deposits was a mistake, while Glencore took a $7.7 billion writedown on its Xstrata Plc takeover. Rio Tinto bought coal assets in Mozambique for $3.1 billion that it later sold for $50 million.
To be sure, joint ventures aren’t a new idea. The giant Escondida copper mine in Chile is operated by BHP but also owned by Rio Tinto and Japanese companies including Mitsubishi Corp. But the push to share more of the risk is a marked contrast to the expansion during the previous bull market.
Still, the more swashbuckling method of going solo on projects may be the most beneficial for shareholders, according to Randgold’s Bristow, whose company built all of its three mines from scratch, including a joint venture with Johannesburg-based AngloGold Ashanti Ltd.
“Greenfield is absolutely where you should put all your money,” Bristow said. “But a lot of these companies are still dealing with their over-exuberant growth during the super cycle.”
Shore Gold proposes name change to Shore Diamond Corp.
ALEX MACPHERSON, SASKATOON STARPHOENIX
Published on: August 9, 2017 | Last Updated: August 9, 2017 5:31 PM CST
An aerial view of Shore Gold Inc.’s Star-Orion South diamond project east of Prince Albert.
SHORE GOLD INC. / SASKATOON
A Saskatoon-based diamond exploration and development company that has spent the last two decades working to build a mine in the Fort à la Corne forest east of Prince Albert wants to change its name and move its “registered office” to Alberta.
Shore Gold Inc. shareholders are expected to vote on two resolutions — including one that would change the company’s name to Shore Diamond Corp. — at its annual meeting, which was scheduled for June 30 but postponed to Sept. 6.
The company’s executives and directors recommended in their management information circular — a document all public firms must publish ahead of their annual meetings — that shareholders cast their ballots in favour of both resolutions.
“The name Shore Gold Inc., while a connection to the history of the corporation, no longer reflects the current focus of the business (and) rebranding will ensure that investors and stakeholders will better understand the … core business,” the circular states.
The second resolution, which would amend Shore Gold’s articles of incorporation to state that its registered office is in Alberta, does not provide a reason for the proposed change or a more specific location in the western province.
Shore Gold representatives did not immediately respond to a request for comment on Wednesday.
At Shore Gold’s last annual meeting, a group of shareholders concerned about communication from the company’s board and executives came close to unseating three of its directors in a move the firm’s chairman deemed illegal.
Two months ago, Shore Gold consolidated ownership of its Star-Orion South property before signing an option agreement with a Rio Tinto Group subsidiary worth up to $75 million over the next seven and a half years.
If Rio Tinto Exploration Canada Ltd. chooses to exercise all four phases of the option agreement, it is expected to end up with a 60 per cent ownership stake in the project.
Independent diamond industry analyst Paul Zimnisky told the Saskatoon StarPhoenix last month that the world’s second-largest mining company got a good deal, as Shore Gold likely needed a major partner to bring the project into production.
August 8, 2017
After decades of being called “gold” while exploring and developing the world’s largest “diamond” deposit just east of Prince Albert, SK in Fort a la Corne, Shore Gold will become Shore Diamonds.
Management and the Board believe that the name Shore Gold Inc., while a connection to the history of the Corporation, no longer reflects the current focus of the business. Management and the Board of Shore Gold Inc. believe that rebranding will ensure that investors and stakeholders will better understand the Corporation’s core business. As a result, the Corporation is proposing to changes its name to Shore Diamond Corporation.
Also, given Shore’s recent agreement with Rio Tinto, it is worth noting that Shore’s Board of Directors is proposed to include Peter Ravenscroft. According to the Circular on page 8:
He previously was Head of Global Exploration for Cliffs Natural Resources Inc. as well as Managing Director, Technical Evaluation Group at Rio Tinto based in London, with global accountability for internal technical reviews of all major capital projects going before the Rio Tinto board. Also group accountability for the compliance of all Rio Tinto companies’ mineral resource and ore reserve reporting. Mr. Ravenscroft was with Rio Tinto for seventeen years, in a variety of roles in the UK, Australia and Canada, with particular involvement in diamond projects and operations. Before joining Rio Tinto, Mr. Ravenscroft was involved in the southern African mining industry, with De Beers, Anglo American and Gencor, and as a geostatistical consultant.