Category Archives: other minerals
The 2017 Saskatchewan Mining Supply Chain Forum was a huge success. In a time where other resource shows are shrinking dramatically, ours grew!
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Top 50 biggest mining companies
LIST AT BOTTOM OF STORY
April 3, 2017
MINING.com and sister company IntelligenceMine‘s ranking of the world’s 50 largest mining companies based on market value continues to show an industry in recovery.
At the end of the first quarter this year the top 50 companies had a combined worth of $842 billion. In total these companies’ added $258 billion in market capitalization over the past 12 months and a good fifth of those gains occurred in 2017.
Another indication of how the rising tide of commodity prices lifted all boats is the fact that the cut-off today to make the ranking is $5 billion (number 51 Kumba Iron Ore has a market worth of $4.96 billion). A year ago it was less than $4 billion.
Changing fortunes in subsectors saw the ranking change noticeably lower down the field. A year ago when gold was still enjoying one of its best starts in decades, gold miners were riding high, but well-known names like AngloGold Ashanti and Kinross no longer make the grade. That said, world number one gold company Barrick managed to improve its ranking.
In contrast, coal and iron ore players bunched up near the bottom at the beginning of the second quarter 2016 when most steelmaking raw materials prices were hitting multi-year lows significantly improved their rankings. Australia’s Fortescue has shot up 20 places while Canada’s Teck managed to climb 26 spots.
As with any ranking, criteria for inclusion is a contentious issue. We decided to exclude unlisted and state-owned enterprises at the outset due to a lack of information. That of course excludes giants like Chile’s Codelco, Uzbekistan’s Navoi Mining which owns the world’s largest gold mine, Eurochem, a major potash firm, trader Trafigura, top uranium producer Kazatomprom and numerous entities in China and developing countries around the world.
Another central criterion was the depth of involvement in the industry before an enterprise can rightfully be called a mining company.
For instance, should smelter companies or commodity traders that own minority stakes in mining assets be included, especially if these investments have no operational component or not even warrant a seat on the board?
This is a common structure in Asia and excluding these types of companies removed well-known names like Japan’s Marubeni and Mitsui, Korea Zinc and Chile’s Copec.
Levels of operational involvement and size of shareholding was another central consideration. Do streaming and royalty companies that receive metals from mining operations without shareholding qualify or is are they just specialized financing vehicles? We included Franco Nevada and Silver Wheaton.
What about diversified companies such as BHP Billiton or Teck with substantial oil and gas assets? Or oil sands companies that use conventional mining methods to extract bitumen for that matter?
Or vertically integrated concerns like Alcoa and number three on the list Shenhua Energy which is a power and shipping company more than a coal miner.
Chemical companies are also problematic – should FMC Corp not be ranked because its potash and lithium operations are such a small part of its overall revenues and what about Albermarle? While the merger of Potash Corp and Agrium is still to close we included only Potash Corp on this listing.
Many steelmakers own and often operate iron ore and other metal mines, but in the interest of balance and diversity we excluded the steel industry, and with that many companies that have substantial mining assets including giants like ArcelorMittal, Magnitogorsk, Ternium, Baosteel and many others.
Let us know of any omissions, deletions or additions to the ranking or suggest a different methodology.
How to build a mine
Goldcorp’s Cerro Negro Mine in southern Argentine. Miners inside the Eureka vein Photo courtesy Goldcorp Inc.
The old adage “Mines are made not found” is a good start to “How to Build a Mine”. There are thousands of mineral discoveries with very few that reach the positive feasibility stage and fewer yet where a profitable mine is actually built. There are three key components to building a mine, starting with a competent, experienced management team. The second component is the financing required to build the mine. The third component is the deposit, which needs to be technically sound and economically feasible. This article assumes that a positive feasibility study (FS) has been completed.
In a normal mining market, financing will be available to proven management teams. An experienced management team can make the most out of a marginal deposit, while an inexperienced team can botch up the best deposit. This is not to say that good teams have not failed, as a number of very successful mine builders have started with, or had at least one failure, in their careers.
An FS produces a Life-of-Mine plan with development and production schedules based on the mining method and operating rate determined. The operating rate is based on what is practically and technically achievable for the deposit. Operating costs and capital costs are developed to within +/- 20% or better. A Life-of-Mine cash flow model is developed to include all revenue, operating costs and capital costs with the cash flow generating Net Present Values for the mine at several discount rates. An after-tax Internal Rate of Return of about 20% to 30% would be considered positive, combined with a quick payback of capital of two to three years and a mine life of five to ten years with a longer mine life preferred.
Also, to allow some leeway for slower ramp up to full production, swings in metal prices and mistakes, it is very important to have sufficient cash flow, say double, to payback the initial capital. The strategy should be to develop the mine as quickly as possible with the least amount of capital and mining /processing the high-est grades first.
Armed with a positive FS, senior management and the board of directors of the company that owns the project must decide whether they want to sell the project or their company, find a joint venture partner, or to build the mine themselves. Management’s first responsibility is to do what is best for the majority of the share-holders. Thus, if the price is right, a sale of the company may be the best route. A sale of the project and not the company is more complicated, as cash or shares remain in the company.
The second option would be to find a joint venture partner with the financing and or experienced team to build the mine, which is not as desirable, as the original owner will have to give up a significant amount of ownership to attract the new partner.
The third option is for the company to build the mine itself, whereby it will need to raise funds (financing) through equity (shares), debt such as loans, convertible debentures, royalty streams, smelter off-take agreements or some combination.
Assuming that the financing is in place, the project owner needs to hire a person to manage the project through to commissioning of the mine and potentially become the General Manager (GM) of the ongoing operation. This person should have experience in managing these types of projects and preferably have operations experience to mine manager level. The GM will hire several persons, the “Owner’s Team” to assist in managing the actual building of the mine and related aspects such as environmental, permitting, human resources and First Nations communications. Alternatively, the GM could engage a management company to act as the “Owner’s Representative” with a team in place that will manage most of the aspects required to build the mine. The key components for actually building the mine are engineering, procurement and construction management (EPCM). There are large firms that carry out all of this work and smaller individual consulting firms that can do the work in conjunction with associates. The Owner’s Team or Representative selects, engages and manages all of the consultants and contractors required to build the mine and will need to be in place through the EPCM phase, including commissioning of the process plant.
Once the mine Owner’s Team or Representative is in place and has engaged the consultants and contractors to carry out all aspects of building the mine, work will begin to build the mine based on the design, plan and schedule developed in the FS. The construction of roads, rail, air-strips or ports to access the mine plus the services such as water, sewage and power will begin, with much of this work similar to the work required for establishing other types of industries except that this construction could be in remote areas with added logistical challenges.
Construction of ancillary buildings such as the office, maintenance shop, warehouse, employee camp, and kitchen/ cafeteria is also similar to other industries. The key difference in construction is the mine itself, the crushing and processing plant, the tailings storage facility, permanent waste storage areas, in particular, if the waste is considered to be acid generating. For remote mine sites, it may be necessary to charter helicopters and/or private planes of various sizes to bring in equipment and personnel.
The FS will include base line studies of all environmental aspects to determine what the current environment is for the habitat of all living things and the long-term impact of building a mine. The quantity and quality of all ore and waste to be mined plus tailings will have been determined with regard to the potential to generate acid and other deleterious metals plus how to treat these issues while operating and at closure. The quantity and quality of water used during operation, the requirement for long-term treatment will have been determined. The work carried out for the FS is the basis for submitting plans for all permits required to obtain a licence to start mining. In Canada, there are two levels of permitting, provincial and federal. For smaller mines that do not have a significant impact on fisheries and waterways or international boundaries, only provincial permitting is required. For larger mines, both provincial and federal permitting is required.
What is called social licence to operate is now high on the list of risks in building a mine. Without approval from all stake-holders that will be impacted by the mine, governments will not provide approval to build the mine. Permitting includes a full closure plan for the end of the mine. In Canada, consultation is required with First Nations prior to granting a licence to develop a mine. This has complicated the permitting process, adding time, costs and risk to the process.
Development of the mine itself will be quite different for an open pit than an underground mine and will require different experience and equipment. Porphyry deposits are often large and many of the current deposits are near surface, thus are mined as open pits with large mining equipment; however, at depth some may have suitable characteristics to convert to large underground block caving mines. Vein type deposits are often narrow, can go to depth and are mined by underground methods with smaller equipment.
Operating costs are normally a function of the size of the equipment used for the mining method. Thus, open pits with large equipment have lower operating costs than underground mines. The grade of ore that can be mined is a function of the operating costs. Thus, the lower the operating costs, the lower the grade of ore that can be mined.
An open pit requires large equipment used to mine large quantities of ore and waste with overburden of soil stripped before the start of the pit. Sufficient over-burden is stripped and waste is mined, at a large capital cost, at the beginning, to provide the start to the open pit with the first benches of ore exposed and mined to sustain the process plant at capacity once the plant has started up. The mining method and equipment for an open pit mine is determined by the type of deposit, shape, size, and depth. The key pit design parameters are the slope of the walls, the bench heights and widths, the location of the road access for equipment and sizing of the equipment.
The underground mining method and operating rate chosen in the FS is mainly dependent on the thickness of the ore, the orientation (flat to vertical), the stability of the ore and the host rock, in particular the walls adjacent to the ore. Historic mining methods included a lot of timber support for unstable ground, whereas, modern ground support has changed to mechanized support such as rock bolts, screen and shotcrete. Wide veins and larger ore zones can now be completely mechanized for drilling, blasting, ground support and mucking. More precise long hole drilling and smaller mechanized equipment is now allowing many narrow veins to convert to safer sub level long hole mining instead of the more labour intensive conventional shrinkage and cut and fill mining methods.
Development of an underground mine is more complicated than an open pit and requires different experience and equipment plus different design depending on whether a shaft, adit or decline (sloping tunnel) is the main means of access. If the mine access is via an adit or decline, then this is easier to get started, requires less equipment, expertise, less development to open up the first stopes for mining and less capital.
Once the first stopes are developed, the decline can continue downwards, opening up new stopes after production commences. If a shaft needs to be sunk instead of a decline, then a headframe needs to be constructed with a hoist installed. The shaft needs to be sunk and equipped for a man cage and skip for ore and waste. As it is difficult to sink the shaft while the mine is operating and it is expensive to setup for deepening the shaft, the initial sinking will often be to a depth that allows mining for the first five to ten years, which is a large, initial capital outlay.
If a decline is required as well, then there is an additional expense, but with the benefit that mining of ore can start as soon as the first few months of ore have been developed from the decline. Subsequently, the shaft can continue sinking while the plant is already processing ore from the mine. In conjunction with the main accesses, other development will be required for ventilation and a secondary means of egress.
The crushing and processing facility is constructed based on the testing, flow sheet and design determined in the FS. Processing of the ore starts with understanding the mineralogy, then metallurgical testing for crushing, grinding and recovery of the metals and treatment/management of the tailings.
The metallurgy is extremely important and lack of sufficient testing up front has been the demise of a number of projects. Most deposits require one or two stages of crushing and sometimes a third stage, with at least one crusher in closed circuit, via screening to provide a feed to the grinding circuit of one quarter inch to half inch size. However, if semi-autogenous grinding (SAG) is used, the ore feed to the SAG from primary crushing may be six inch, thus eliminating the need for secondary crushing prior to the SAG Mill. Conventional grinding using a rod mill or ball mill will also be used, or some combination, to grind the ore to fine powder (micron size) using rods, balls, with the ore in the SAG mill to assist with the grinding, while the mills rotate.
Once the ore is ground to the prescribed size for optimum recovery of the economic minerals, then these metals are recovered by a number of processes. Gold and silver can be recovered by gravity for the free gold/silver followed by cyanidation of the lower grade ore to make doré bars on site from both products. Alternatively, after gravity, a flotation step can be used to produce a lower grade concentrate to be shipped to smelters worldwide for final processing. Base metal and polymetallic ores usually use differential flotation to produce one or more concentrates to be sent to smelters worldwide.
Heap leaching has been used for some time for lower grade, precious metal and copper deposits, whereby the ore only has to be crushed to a size that liberates most of the economic metals and does not have to be ground, a quarter inch to a few inches in size is sufficient to achieve metal recoveries in the order of 60% to 80%. Heap leaching eliminates the need for a grinding circuit, flotation and/or large cyanide tanks, thus reducing the initial capital and operating costs. The crushed ore is trucked or conveyed to a leach pad where an impervious liner collects the leach solution from the heap, which has been sprayed with cyanide as each layer of ore is placed.
Carbon-in-Pulp, Carbon-in-Leach, Merrill Crowe, Solution-Extraction-Electro-Winning are a few of the processes to recover precious metals from the cyanide solution. Gold and silver doré that is produced on site from conventional milling and heap leaching will be sent to refineries including the Canadian mint for final refining to 99.999% purity from a doré bar that contains between 80% and 99% gold or silver. Doré bars provide quick cash flow from production with low shipment and refining costs compared to concentrates of large volumes that may require shipment halfway around the world with payments for the metals staggered over months.
Tailings from all of the processes must be deposited in a conventional tailings storage facility, near the plant, with a dam and often lined, or dried and stacked, or deposited underground after thickening, or after it has been made into a paste. If cyanide is used, then residual cyanide in the tailings stream must be destroyed prior to leaving the plant.
In summary, building a mine takes a long time from discovery to mining the deposit, usually 10 years or more with a huge amount of capital invested by many investors from the high-risk exploration stage through feasibility to building the mine. The skills and expertise of people from very diverse backgrounds are used in the conception and planning regarding the technical, environmental, social and economic impacts of the project on the local habitat, communities and the country.
Mr. Sveinson is a professional mining engineer with more than 40 years experience in exploration, development, construction, operation and financing of mining projects ranging in size from 100 to 2,000 tonnes per day in Canada, the United States, South America and Africa. Mr. Sveinson is President of International Mine Builders Inc., a consulting firm providing management and technical services to the mining industry.
by Fred Sveinson, PEng
Published with permission of Resource World Magazine
Making the grade: understanding exploration results
Diamond drill core from the Freegold Ventures Shorty Creek Project in Alaska. Note the massive chalcopyrite (copper) mineralization. Photo courtesy Freegold Ventures Ltd
The most exciting news from a mining exploration stock is a high-grade drilling result. But what constitutes a good assay? It varies from situation to situation and commodity to commodity. Listed below is some rule of thumb information on interpreting drill results for investors.
The first thing investors must under-stand is that high-grade mineralization is relative to the depth of the intersection and relative to the size of the intersection. Today’s mining technology allows mining on a vast scale, with large open pits and huge 200-tonne mining trucks capable of processing large volumes of ore at a low cost. This is possible, provided the zone is near surface and the ore zone is large enough to be mined in bulk. Open pits are generally less than 300 metres deep and are several hundred metres in diameter. Two questions to ask are:
- Is the zone less than 300 metres deep?
- Is the drill intercept over 100 metres thick?
If both of these questions can be answered ‘yes’, then the threshold for what constitutes ‘high-grade’ will be dramatically lower. As a rule of thumb, open pit mining can process ore for $10 per tonne and, where the ore grade is more than double that at $20 per tonne, results would be economic. Consider that 1% of a metric tonne is 22 pounds. Then, for a commodity worth about $1 per pound such as zinc, 1% zinc worth $22 per tonne becomes interesting. Grades triple that, worth $66 per tonne when less than 300 metres deep and more than 100 metres thick, would be considered high-grade.
Using the same dollar figures for mining, but considering other commodities, here are some high-grade intercepts for other commodities and a few recent examples.
COPPER: Anything over 100 metres and 1% copper equivalent or better is considered to be high-grade. For example, Serengeti Resources announced 119.6 metres of 0.9% copper equivalent (copper plus gold values added together) at depths from 180 to 300 metres. The stock then increased from $0.30 to $1.50 after those drilling results were reported.
NICKEL: This valuable metal doesn’t usually occur in nature as a bulk tonnage target since most bulk tonnage mines contain 100 million tonnes of ore or more, and most hard rock nickel deposits are less than 10 million tonnes in size. Therefore, anything over 20 metres in thickness (significantly less thickness than other commodities) and 2% nickel grade or better would be reasonably considered high-grade. Example: In September 2007, Noront Resources released two nickel intercepts from shallow drilling between 80 metres and 150 metres deep, with a section of 71 metres grading 1.8% nickel and 1.5% copper. The stock moved from $0.80 to $4.00.
GOLD: It is usually reported in grams per tonne (or g/t), although sometimes, in the US, it is in oz/ton. A gram of gold is worth about $25, so 2 grams or better would be viewed as high-grade for bulk tonnage mining. One hundred metres of good grade is again good criteria for thickness.
As a spectacular example, Aurelian Resources announced intercepts of 216 metres grading 12.8 grams gold/tonne from its Fruta Del Norte deposit in Ecuador, now owned by Lundin Gold. This result is truly exceptional in terms of grade and thickness, and propelled the stock from $2 to over $22 in 2006. However, this extreme grade and thickness only comes along once every 10 years or so.
URANIUM: Uranium has traded in a wide range over the last 10 years, being negatively impacted by the shutdown of the nuclear industry in Japan. It is sold under long term contracts with undisclosed prices so it is difficult to know a reliable reference price. I would use $50 per pound as a long term price and suggest that an open pit target that grades 2.2 pounds/tonne, or approximately 0.1% would be an economic intercept over 100 metres. For high-grade, underground deposits, a grade of 1% would be a significant intercept over thicknesses of 2 metres or more.
DIAMONDS: Economic diamond mines are generally small even though they are commonly shallow deposits mined by open pits. The contained value per tonne can be extremely high, but varies from deposit to deposit, depending on the quality and size distribution of the contained diamonds. Larger diamonds are much more valuable than smaller ones, and consequently, two diamond deposits with the same grade, which contain different proportions of large stones, will vary significantly in their value per tonne of ore.
As a general rule of thumb, 1 carat/tonne of ore is viewed as high-grade. The geometry is important. Diamond pipes are carrot-shaped, vertically inclined bodies that come to surface and can be mined by open pits, and then, if the grade is high enough, can also be mined from underground. Diamond pipes are usu-ally comprised of a rock called kimberlite which gushed up from deep in the earth carrying diamonds. The diamonds were not ‘born’ in the kimberlite; it is only a medium of transport. The diamonds that survived the long voyage to near surface are found in what is called the diamond stability zone. Diamonds can often occur in dykes, and these are much less preferable for mining due to the limited thickness of the bodies. So look for grades approaching 1 carat/tonne and a description that the sample comes from a pipe rather than a dyke.
In early stage diamond exploration, values are presented as a diamond count rather than a grade. Here the rule of thumb is to have a minimum of one diamond per kilogram sample. One example was Diamonds North Resources, which reported results of 551 diamonds in an 81.75 kilogram sample, for a diamond count of approximately seven diamonds per kilogram sample. This is seven times greater than what we hold as our rule of thumb, and so it’s not surprising that the stock went up over 100% from $0.75 to $1.80 in the day following the release of this result. However, there were not enough commercial-sized diamonds and the project is now on hold.
UNDERGROUND MINING OR SMALL TONNAGE SCENARIOS
Now consider smaller tonnage scenarios, where the thicknesses are much less than 100 metres, but still at least 2 metres thick. These geometrics can be mined by under-ground mining technologies, and the costs are considerably higher, say $25 to $50 per tonne as a rule of thumb. In this style of mining $100 per tonne gross metal value is interesting and $500 per tonne is considered to be high-grade.
Again, considering 1% of a tonne equals 22 pounds then we would need 4.5% zinc to be interesting and 10% zinc to be high-grade. Since zinc deposits are generally flat, and bedded layers have thicknesses of less than 100 metres, we are generally looking for 10% or better. Using $500 per tonne gross metal value as a high-grade metal value on a per tonne basis gives the following parameters for other commodities:
COPPER: 10% copper would be very high-grade, but very often copper occurs with other base and precious metals, so I would consider a value of 5% copper to be a rule of thumb threshold for thicknesses of 2 metres and up. The Nevsun Resources Timok Project in Serbia has indicated resources for the Upper Zone estimated to be 1.7 million tonnes averaging 13.5% copper and 10.4 g/t gold – exceptionally high grades. The Ivanhoe Mines Kakula deposit in the DRC has returned very high copper grades, including 11.91 metres (true width) of 6.23% copper at a 3.0% copper cut-off.
GOLD: One ounce, or roughly 30 grams/tonne is high-grade and can be expected to move markets in most cases. Several ounces of gold per tonne is considered to be high-grade for underground mining, although 5 grams gold/tonne is usually economically viable. The most well-known example of narrow high-grade is in Goldcorp’s Red Lake, Ontario mine where gold grades of 18-20 grams gold/tonne are being mined from its deep workings.
URANIUM: The Athabasca Basin in northern Saskatchewan has high-grade uranium which can run from 1-3% uranium and higher in deposits buried 200 metres or more below surface. These are among the highest grade uranium mines in the world, so we will define 1% uranium as high grade for small tonnage style deposits. Fission Uranium has reported fantastically high grades at its Triple R deposit, including hole PLS16-504 on zone R840W with 25.95% U3O8 over 4.0 metresand 10.03% U3O8 over 11.0 metres. DIAMONDS: There is no separate rule of thumb I can define for small tonnage high-grade diamond deposits as to carat value, or diamond counts; the rule stated previously of one carat/tonne should suffice for all scenarios.
PLATINUM AND PALLADIUM:
These precious metals almost always occur as narrow seams, and one would look for grades of 6 grams platinum + palladium/ tonne over 2 metres as a reasonable thresh-old for high-grade.
The previous guidelines should give the reader a general idea of what is high-grade in a news release. It is important to think of assays in terms of what they mean in dollars per tonne, using the idea that a deposit is generally profitable if the metal value is twice the mining cost. Also it is necessary to determine if the deposit can be mined as a bulk tonnage or low tonnage project before considering whether a news release ‘makes the grade’ or not.
by Alf Stewart
Published with permission of Resource World Magazine
Thu Mar 16, 2017 | 1:44pm EDT
By Zandi Shabalala | LONDON
Smaller mining companies seek IPOs but deals remain modest
FIILE PHOTO: Workers are seen underground South Africa’s Gold Fields South Deep mine in Westonaria, 45 kilometres south-west of Johannesburg, South Africa, March 9, 2017. REUTERS/Siphiwe Sibeko/File Photo
Stock market flotations of smaller mining and metals companies are set to pick up this year, although a return to the flood of deals five or six years ago remains unlikely while investors rebuild their bruised confidence in the sector.
A continued rally in metals prices is galvanizing some firms into raising capital on exchanges across the world to fund exploration and plow cash into existing projects, with others also preparing initial public offerings.
But with investors’ memories fresh of a bloodbath in mining stocks in 2015, the firms’ ambitions are modest: they are joining small-capital indexes or listing on junior markets in deals typically worth $10 million or less – far from Glencore’s $10 billion flotation in 2011 when commodities were booming.
“We are at the early stages of a cyclical recovery so you would expect to see the first signs of resurgence in the IPO market,” said Michael Rawlinson, Global co-head of Global Mining and Metals at Barclays.
So far this year, the bulk of IPOs have been in Australia, where nine mining companies have already filed to list their shares on the Australian Stock Exchange. That compares with 10 new issues for the whole of 2016.
Lee Downham, head of EY’s global mining & metals transaction advisory services, said the small-cap indexes in Toronto, London and Australia would see the bulk of initial activity until investors built up the confidence for larger cash calls.
“The sector needs to regain shareholder confidence before the bigger fundraising takes place,” he said.
Investors were stung when mining indexes in London, Australia and Toronto fell between 27 and 50 percent in 2015, with Anglo-American (AAL.L
) losing 75 percent of its value.
However, commodity prices began their revival last year, sending Anglo-American back up nearly 300 percent and making it the best performing blue chip in London, albeit from a low base.
GOLD EXPLORERS DOMINATE
Gold exploration companies, including Huntsman Resources and Raptor Resources, have dominated the Australian crop of IPOs so far as they take advantage of bullion prices rising in 2016 for the first time in three years.
Huntsman Resources is an exploration company with projects in the Democratic Republic of the Congo and Australia, while Raptor Resources explores for gold and copper in Australia.
Also expecting to list in Australia is lithium-focused Marquee Resources, which plans to raise $2.7 million from investors to find and develop exploration projects.
The London Stock Exchange, which hosts three of the world’s largest five mining firms, listed two companies last year – rare earths miner Mkango Resources (MKA.L
) and uranium miner Aura Energy (AURA.L). They followed just one flotation in 2015.
Mkango chief executive Will Dawes said the miner listed on London’s junior AIM market to fund its projects, increase liquidity and broaden its shareholder base while maintaining its Toronto listing.
Rainbow Rare Earths RWBR.L raised $8 million from its listing in London in January to fund its Burundi project.
“Circumstances seem to be more optimistic for junior mining IPOs in the short to medium term than they have been before,” said Martin Eales, chief executive of Rainbow Rare Earths.
Performance of the new listings has been mixed. Shares in Mkango and Rainbow have not added that much value but Aura Energy has surged about 75 percent.
There have been two new mining listings on the Toronto Stock Exchange so far this year, and the bourse said more are expected in the coming months. In 2016, there was a 38 percent increase in cash raisings by mining firms from 2015.
“Assuming that things continue the direction they are going with commodity prices, and there is every indication that there will, we will be seeing a large number of new listings,” said Orlee Wertheim, the head of business development for mining at TSX.
However, industry experts said that while there was a marginal improvement of new listings, investors were still cautious and this could affect how many companies actually make it to market.
“In terms of our pipeline, we are definitely seeing more flow of potential transactions,” said Jeff Keating, director at SP Angel Corporate Finance. “There is more interest in mining companies but I don’t believe that it is going to lead to a flood of IPOs or a return to where we were five or six years ago.”
(Story corrects number of Toronto listings this year in eighteenth paragraph.)
(editing by David Stamp)
From virtual reality to programmable bacteria: innovation on display mining
By: Alexandra Posadzki, The Canadian Press
Posted: 03/9/2017 3:01 AM | Last Modified: 03/9/2017 7:05 AM
TORONTO – Programmable bacteria, a gold-sniffing camera and a virtual realitytool for taking investors underground were among the innovations on display at the world’s biggest annual mining convention in Toronto this week.
Their makers say these and other technologies have the potential to reshape the mining industry at every stage — from financing and exploration to extraction and cleaning up sites once the metal is gone.
The Gold Sniffer, a digital camera with a macro lens, a specialized light source and custom-built software with a sophisticated algorithm to detect gold’s unique optical signature, is shown in this undated handout photo. Programmable bacteria, a gold-sniffing camera and a virtual reality tool for taking investors underground were among the innovations on display at the world’s biggest annual mining convention in Toronto this week. Their makers say these and other technologies have the potential to reshape the mining industry at every stage — from financing and exploration to extraction and cleaning up sites once the metal is gone. THE CANADIAN PRESS/HO – Gold Sniffer Inc.
Some veterans of the Prospectors and Developers Association of Canada (PDAC) convention say such innovation is badly needed in an industry traditionally resistant to change.
“There’s a lot of inertia in our business,” said George Salamis, chairman of Vancouver-based Integra Gold Corp. (TSXV:ICG).
“There’s this mindset that, ‘We’ve been doing this for 100 years, why would we change?’ With new blood coming in, that is changing. But change is slow.”
The mining industry has been on the mend as commodity prices recover from a protracted slump. The downturn made many executives more focused on pruning budgets than investing in technology that might increase efficiency.
But even a small implementation of such products can have a huge effect on margins and operating costs, Salamis noted.
“Mining is certainly ripe for that,” he said.
Encouraging innovation was Integra’s chief aim when it partnered with Goldcorp Inc. to create Disrupt Mining, a Shark Tank-style competition held during the opening day of the convention last Sunday.
Among the five finalists was Sudbury, Ont.-based Bio-Mine Ltd., a company that has spent the past 13 years working with bacteria that can be programmed to break down different types of rock, either to help extract valuable metals or neutralize harmful byproducts when remediating old mines.
While micro-organisms have been used in mining for nearly a century, Bio-Mine CEO Kurtis Vanwallegham says the bacteria previously used were static — “one trick ponies” that can only break down one type of rock in a particular environment.
Bio-Mine’s technology is more versatile, Vanwallegham says. By feeding their bacteria a very specific diet and depriving them of certain things, a process referred to as metabolic engineering, the company is able to program the micro-organisms to target specific substances, regardless of what environment they’re in.
“When you have a programmable technology, the opportunities are limitless,” Vanwallegham says.
Another technology on display at PDAC is the Gold Sniffer. It uses a digital camera, a macro lens, a specialized light source and custom-built software with a sophisticated algorithm to detect gold’s unique optical signature, says Jim Kendall, president of Waterloo, Ont.-based Gold Sniffer Inc.
He first came up with the concept while working at a gold mining company in Toronto in 2009.
“My colleague and I were talking and I went to his desk, picked something up and said, ‘If this was a rock in northern Ontario, how could I tell if there’s gold in it?'” Kendall recalls. “He said, ‘You can’t.'”
Gold particles are often too small for a geologist to see with a hand lens, so the only way to know if a rock sample contains gold is to ship it off to a lab — a process that can take weeks or even months to get results. Kendall says the Gold Sniffer shaves the process down to minutes.
Headsets that allow potential investors to tour a mine site without boarding a plane also proved popular at the convention.
Metaverse, a Toronto-based consulting firm specializing in virtual and augmented reality, says the technology can have vast applications in the mining industry, from training employees on safety protocols to visualizing data on ore deposits.
To date, uptake of the relatively new technology has been slow in the mining sector, says Alan Smithson, the co-founder and CEO of Metaverse.
“It’s a very old business,” Smithson said. “People have been digging stuff out of the ground for thousands of years. It takes time to change that.”
The mining industry strikes something new – optimism
The Globe and Mail
Published Sunday, Mar. 05, 2017 4:45PM EST
Last updated Sunday, Mar. 05, 2017 6:28PM EST
For the first time in years, the global mining industry’s annual extravaganza has rattled into life surrounded by what looks suspiciously like a bull market.
Many commodity prices, from copper to zinc, have rocketed higher in recent months. Share prices have followed suit, and attendees to this year’s Prospectors & Developers Association of Canada (PDAC) convention in downtown Toronto no longer bear the dazed look of accident survivors.
But, even so, the opening day of the industry’s big bash on Sunday still struck a wary tone. Organizers expect 22,000 people to attend the show, which runs through Wednesday. That is roughly the same number as last year, but it is far below the 30,000 who flooded through the doors at the height of the commodity boom in 2011.
In happier times, the convention prided itself on being the spot for both hard-drinking parties and non-stop deal-making. It has become a more sober, restrained affair in recent years as the industry has struggled through a prolonged bleak patch.
Attendees to this year’s convention welcomed signs that the sector’s long ordeal is finally over, but nobody was declaring victory just yet.
“There’s definitely optimism here, but it’s of a cautious sort,” said Paul Robinson, a director at mining consultants CRU Group in London, and a speaker at the conference.
The surprise pick-up in mineral prices in recent months was based largely on China’s unexpected economic vigour, with an assist from U.S. President Donald Trump’s pledge to spend a trillion dollars on infrastructure, he said. The problem is that neither the Asian giant nor the U.S. President are a sure bet to keep on giving.
China, which consumes about half the global output of many commodities, remains the biggest uncertainty, Mr. Robinson noted.
He said Beijing’s decision in recent weeks to curtail aluminum production as a way to help ease air pollution is a positive signal because it indicates the Chinese government feels confident enough about the underlying economy to take the risk of throttling back on a key employer.
But skeptics warned that governments in Beijing, Washington and elsewhere are hard to predict. “One common factor for most [metals markets] is the outsized near-term importance of highly uncertain politics and policy,” Rory Johnston of Bank of Nova Scotia cautioned in a note.
Until the global trend becomes clearer, many miners are content to bide their time. However, unlike a year or two ago, when all the emphasis seemed to be on buttressing balance sheets, a growing number of companies are at least considering expansion.
“We’re being asked to talk to clients about a lot of the big projects that were put on hold back in 2012 and 2013,” said Dave Lawson, president of the global mining and metals market for Amec Foster Wheeler, an engineering consultant and project manager. “People are dusting off those projects and taking a new look at them … redoing the calculations and rethinking the economics.”
A slower industry has resulted in cheaper labour and more competitive bids on everything from construction to manufacturing, he said. Thanks to the improving cost picture, Mr. Lawson’s group has shaken hands on – although not yet officially booked – more than $300-million (U.S.) of new business in the first two months of the year, he estimated.
While big players mull a return to megaprojects, many smaller companies are paying an unusual amount of attention to minor metals, such as lithium and cobalt, where the case for buying is less about the global economy and more about technological trends.
Both lithium and cobalt are used in batteries and a host of promoters on the convention floor are delighted to assure passersby that demand for the metals can only climb as smartphones and electric vehicles become more popular.
Visitors who aren’t in the mood to invest in a junior lithium play can check out the comparative merits of a host of mining jurisdictions, from Greenland to Mongolia, that are using the show to pitch their unique virtues.
One of the more intriguing presences at this year’s show is Brazil, which is seeking to reinvigorate its mining sector by cutting red tape and opening up many previously restricted areas to foreign investors.
Fernando Coelho Filho, Brazil’s Minister of Mines and Energy, is in Toronto to talk to miners and assure them that he intends to remove many of the bureaucratic obstacles to winning a mining permit.
“Our bureaucracy has been very tough to go through,” he said. “We know that. And we’re going to improve.”
Feb 27 2017
Full report is HERE
Executive Summary 2016 Mining Survey
This report presents the results of the Fraser Institute’s 2016 annual survey of mining and exploration companies. The survey is an attempt to assess how mineral endowments and public policy factors such as taxation and regulatory uncertainty affect exploration investment. The survey was circulated electronically to approximately 2,700 individuals between August 30th and November 18th, 2016. Survey responses have been tallied to rank provinces, states, and countries according to the extent that public policy factors encourage or discourage mining investment.
A total of 350 responses were received for the survey, providing sufficient data to evaluate 104 jurisdictions. By way of comparison, 109 jurisdictions were evaluated in 2015, 122 in 2014, 112 in 2013, and 96 in 2012. The number of jurisdictions that can be included in the study tends to wax and wane as the mining sector grows or shrinks due to commodity prices and sectoral factors.
The Investment Attractiveness Index takes both mineral and policy perception into consideration
An overall Investment Attractiveness Index is constructed by combining the Best Practices Mineral Potential index, which rates regions based on their geologic attractiveness, and the Policy Perception Index, a composite index that measures the effects of government policy on attitudes toward exploration investment. While it is useful to measure the attractiveness of a jurisdiction based on policy factors such as onerous regulations, taxation levels, the quality of infrastructure, and the other policy related questions respondents answered, the Policy Perception Index alone does not recognize the fact that investment decisions are often sizably based on the pure mineral potential of a jurisdiction. Indeed, as discussed below, respondents consistently indicate that only about 40 percent of their investment decision is determined by policy factors.
The top jurisdiction in the world for investment based on the Investment Attractiveness Index is Saskatchewan, which moved up to first from second place in 2015. Manitoba moved up to second place this year after ranking 19th the previous year. Western Australia dropped to third, after Saskatchewan displaced it as the most attractive jurisdiction in the world. Rounding out the top ten are Nevada, Finland, Quebec, Arizona, Sweden, the Republic of Ireland, and Queensland.
When considering both policy and mineral potential in the Investment Attractiveness Index, the Argentinian province of Jujuy ranks as the least attractive jurisdiction in the world for investment. This year, Jujuy replaced another Argentinian province—La Rioja—as the least attractive jurisdiction in the world. Also in the bottom 10 (beginning with the worst) are Neuquen, Venezuela, Chubut, Afghanistan, La Rioja, Mendoza, India, Zimbabwe, and Mozambique.
Policy Perception Index: A “report card” to governments on the attractiveness of their mining policies
While geologic and economic considerations are important factors in mineral exploration, a region’s policy climate is also an important investment consideration. The Policy Perception Index (PPI), is a composite index that measures the overall policy attractiveness of the 104 jurisdictions in the survey. The index is composed of survey responses to policy factors that affect investment decisions. Policy factors examined include uncertainty concerning the administration of current regulations, environmental regulations, regulatory duplication, the legal system and taxation regime, uncertainty concerning protected areas and disputed land claims, infrastructure, socioeconomic and community development conditions, trade barriers, political stability, labor regulations, quality of the geological database, security, and labor and skills availability.
For the fourth year in a row, the Republic of Ireland had the highest PPI score of 100. Ireland was followed by Saskatchewan in second, which moved up from 4th in the previous year. Along with Ireland and Saskatchewan, the top 10 ranked jurisdictions are Sweden, Finland, Nevada, Manitoba, Wyoming, New Brunswick, Western Australia, and Northern Ireland, which was included for the first time in the 2016 survey.
The 10 least attractive jurisdictions for investment based on the PPI rankings (starting with the worst) are Venezuela, Afghanistan, Zimbabwe, Mongolia, Philippines, Indonesia, Chubut, South Sudan, Mendoza, and Ecuador. Venezuela, Zimbabwe, and Chubut were all in the bottom 10 jurisdictions last year. Two out of the 10 lowest-rated jurisdictions based on policy were Argentinian provinces.
A return to optimism in mining puts Canada at a crossroads
February 16, 2017
The Canadian Mining Association
To download a copy of Facts & Figures 2016, go HERE
Action needed for Canada to capitalize on potential rebound
Cautious optimism is returning to the global mining industry, which could spur mining companies to make new and significant investments. However, a new report from the Mining Association of Canada (MAC) shows evidence of declining Canadian competitiveness and the prospect for major exploration and mining investments to flow offshore.
“Very simply, Canada is not as attractive as it used to be for mineral investment, and competition for those dollars is growing globally. The recent elimination of federal mining tax incentives, regulatory delays and uncertainty, combined with major infrastructure deficits in northern Canada are all contributing factors that can explain Canada’s declining attractiveness. The time is now to put the right policy pieces in place to better compete for those investments and regain our leadership in mining,” stated Pierre Gratton, President and CEO, MAC.
MAC’s Facts & Figures 2016 report notes several indicators that reveal that Canada is not as competitive as it once was. Foreign direct investment into Canada’s mining sector dropped by more than 50 percent year-over-year in 2015. This is disproportionate to Canadian mining direct investment abroad, which only experienced a 6 percent decline. This imbalance indicates that companies are investing in project development, but may be less interested in doing so in Canada. Canada also no longer attracts the single-largest share of total global mineral exploration spending, having conceded first place to Australia in 2015. Further, no new mining projects entered the federal environmental assessment stage in 2016. If these trends continue, there will be fewer discoveries made and fewer projects that become operational mines in Canada.
“The policy landscape in Canada is full of uncertainty as we await the outcomes of major government decisions. The federal government is reviewing federal environmental legislation, is implementing a pan-Canadian climate change policy, and is working to address long-standing transportation and infrastructure issues. These are all necessary and positive steps, but they must result in boosting Canada’s attractiveness as a place to do business. At risk is a key sector of our economy, and one that leads the world in sustainable mining practices,” stated Gratton.
MAC’s report also revealed the mining industry remained a strong contributor to the Canadian economy despite the downturn in 2015. The industry directly employed more than 370,000 people across Canada and remained the largest private sector employer of Aboriginal people on a proportional basis. An additional 190,000 worked indirectly in mining, with more than 3,700 companies supplying goods and services to the Canadian mining industry. In 2015, the mining industry accounted for $56 billion of Canada’s GDP and minerals and metals accounted for 19% of Canadian goods exports.
Policies that improve Canada’s mining competitiveness:
1) Improve the federal project review process – the process should be effective and timely, from pre-environmental assessment (EA) to post-EA permitting, with meaningful consultation with Aboriginal communities.
2) Invest in critical infrastructure in remote and northern regions – introduce strategic tax measures and ensure the new Canada Infrastructure Bank has a strong economic development focus for northern Canada.
3) Improve access to trade – ensure trade policies provide access to new and important markets, including China, and improve Canada’s transportation network to more efficiently move mineral and metal products to market.
4) Address climate change while protecting Canadian businesses – adopt policies that lead to meaningful greenhouse gas emissions while protecting emissions intensive and trade-exposed industries (EITI), like the mining industry. Failing to protect EITI sectors will result in “carbon leakage”—the shifting of production and the associated economic benefits from countries that are taking action on climate to those that are not.
5) Help expedite industry innovation – The Canada Mining Innovation Council is seeking a $50 million investment for the Towards Zero Waste Mining innovation strategy from the Government of Canada to accelerate the adoption of disruptive technologies that will support the transition to a lower carbon future.
To download a copy of Facts & Figures 2016, go HERE
The Mining Association of Canada is the national organization for the Canadian mining industry. Its members account for most of Canada’s production of base and precious metals, uranium, diamonds, metallurgical coal, mined oil sands and industrial minerals and are actively engaged in mineral exploration, mining, smelting, refining and semi-fabrication. Please visit www.mining.ca.
Canada losing ground as mining investment destination
Feb 16, 2017
Source: MAC’s Facts & Figures 2016.
While optimism is slowly but steadily returning to the global mining industry, Canada doesn’t seem to be in a good position to benefit from the increasing number of companies ready to make new and significant investments.
At least that is the conclusion from a report released Thursday by the Mining Association of Canada (MAC), which also warns of the possibility of seeing major exploration and mining investments flow offshore.
“Very simply, Canada is not as attractive as it used to be for mineral investment, and competition for those dollars is growing globally,” MAC President and CEO Pierre Gratton said.
Elimination of federal mining tax incentives, regulatory delays, uncertainty and major infrastructure deficits in northern Canada are all contributing to the country’s declining appeal.
The recent elimination of federal mining tax incentives, regulatory delays and uncertainty, combined with major infrastructure deficits in northern Canada are all contributing factors that can explain Canada’s declining attractiveness, Gratton noted.
The report also highlights the policy areas that Canada needs to pay attention to in order to seize future growth opportunities and re-gain its leadership in mining.
Some of the figures included in the report are quite telling. In 2015, foreign direct investment into Canada’s mining industry dropped by more than 50% from the previous year. In contrast, the country’s resources sector direct investment abroad only experienced a 6% decline.
According the industry body, such imbalance proves that Canada no longer attracts the single-largest share of total global mineral exploration spending, a top place it lost to Australia in 2015. Further, MAC says, no new mining projects entered the federal environmental assessment stage in 2016.
If these trends continue, the association warns, there will be fewer discoveries made and fewer projects to become operational mines in Canada.
Despite the challenges, the sector remains a key contributor to the Canadian economy, employing more than 370,000 people across the country and being the largest private sector employer of Aboriginal people on a proportional basis.
In 2015, the mining industry accounted for $56 billion of Canada’s GDP and minerals and metals accounted for 19% of Canadian goods exports.