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Canadian miners struggle amid oversupply, price collapse – coal, copper, iron, gold

Canadian miners struggle amid oversupply, price collapse
Rachelle Younglai – MINING REPORTER
The Globe and Mail
Published Tuesday, Sep. 23 2014, 7:23 PM EDT
Last updated Wednesday, Sep. 24 2014, 11:20 AM EDT
The mining industry is flooded. Years of expensive expansions have left the market awash with iron ore, metallurgical coal and copper.
For more than a decade, China’s growing economy fuelled the bull market in commodities. Mining companies spent billions on acquisitions and new projects around the world, adding waves of new supply to keep the country’s steel mills and factories humming.
Then China’s economic growth slowed and the good times stopped. Now the mining industry around the globe is suffering amid a price collapse for some key metals.
Iron ore has lost more than half its value since the boom days, trading at $80 (U.S.) a tonne from a high of $190 in 2011.
Metallurgical coal has sunk to $120 a tonne, down from $330 in 2011.
Copper has retreated to $3.03 a pound, compared with a high of $4.50 in 2011.
“It will be a while before we see a boom again,” said Fabien Jurdant, chief operating officer with CRU Consulting, a global commodities adviser.
“We are not seeing any kind of major upturn for some time. Unless there was some miracle, if India becomes the new China. But we are not predicting that,” Mr. Jurdant added
Now entering the third year of the commodity slump, miners are still adjusting to the harsh realities. Projects have been shelved and jobs have been cut, as the fallout from sharply lower commodity prices is felt around the world.
In Canada, Labrador Iron Mines Holdings Ltd. suspended operations at its mines this summer. Cliffs Natural Resources Inc. stopped production at its iron ore pellet plant on Quebec’s north shore earlier this year. Baffinland Iron Mines Corp. sharply scaled back its Mary River iron ore project in Nunavut last year.
Also this year, Walter Energy Inc. suspended coal-mining operations and laid off workers in British Columbia, and Teck Resources Ltd. idled its Quintette coal property in the western province. Anglo American PLC will soon halt production at its coal mine in the same province.
China, which has became the world’s largest consumer of iron ore, copper and other metals, is growing at a slower pace.
“China is still growing. The question is ‘will it materially outpace supply?’ The answer is becoming no,” said Bart Melek, head of commodity strategy with Toronto-Dominion Bank.
Weakened Asian demand combined with a surge in production has left a glut of commodities.
According to the CRU’s estimates, the iron ore market has a surplus of about 100 million tonnes over demand. The metallurgical coal market has a surplus of about six million to eight million tonnes because projects developed during the commodity boom are now starting to produce.
Over the past decade, production of iron ore, used to make steel, jumped to 1.85 billion tonnes in 2012 from 1.16 billion in 2003, according to the World Steel Association.
Output of metallurgical coal, also used in steel making, has increased to one billion tonnes in 2013 from 661 million tonnes in 2005, according to the International Energy Agency.
Copper, used in construction, electronics and energy, has jumped to 20.9 million tonnes in 2013 from 15.9 million in 2004, according to the International Copper Study Group.
And although the smaller iron ore companies are losing money and laying off workers, the world’s biggest producers – Vale SA, Rio Tinto PLC and BHP Billiton Ltd. – have no plans to reduce output.
“They are low-cost producers and they are still generating okay margins,” said Jessica Fung, commodity strategist with BMO Nesbitt Burns. “So rather than increase their profit margin per unit, they are going to produce more units,” she said.
And more copper is coming onto the market, which will keep prices low for the foreseeable future. Big mines are expected to start producing next year. Those include China’s Las Bambas project in Peru, HudBay Minerals Inc.’s Constancia in Peru and Wanbao Mining Copper Co.’s mine in Myanmar.
A similar story played out in Canada’s gold industry, home to some of the world’s largest gold producers.
Although the world is not drowning in gold, companies have been forced to shutter mines and projects when the precious metal lost a third of its value. Ore that was once profitable to mine when gold was trading above $1,500 an ounce has become a money-losing endeavour with bullion trading around $1,220.
Agnico Eagle Mines Ltd., one of the few miners to emerge from the rout unscathed, said there is a floor for the precious metal.
“Companies are not investing as much in new projects,” Agnico’s CEO officer Sean Boyd said in a recent interview. “Ultimately that will affect how much gold the industry can produce, which should be good for the gold price at some point.”

Coal revival cripples Germany’s $130 billion green drive #uranium

Coal revival cripples Germany’s $130 billion green drive
Cecilia Jamasmie
September 22, 2014
Germany is likely to miss its 2022 climate targets and greenhouse-gas emissions from power plants, as the country’s use of coal continues to increase.
Only last year the share of electricity generated from coal in Europe’s biggest economy hit the highest in 24 years. The country also opened more coal-fired power plants in 2013 than any other time in the past 20 years as it moves towards a target set three years ago, which aims to have all nuclear power stations shut down by 2022.
Germany’s energy revolution —or “Energiewende”— has come at a high price. According to Bloomberg, it has so far added more than $134 billion (100 billion euros) to the power bills of households, shop owners and small factories.
But falling coal prices seem to have wet the government’s appetite for the fossil fuel, to the point that Chancellor Angela Merkel’s government has recently announced it considers coal-based power plants as “indispensable” for the foreseeable future.
“Despite the massive expansion of renewable energies, achieving key targets for the energy transition and climate protection by 2020 is no longer realistic,” Thomas Vahlenkamp, a director at McKinsey & Co. in Dusseldorf, Germany, told Bloomberg.
“The government needs to improve the Energiewende so that the current disappointment doesn’t lead to permanent failure,” the adviser to the industry added.
German utilities plan to start new hard-coal plants with 5,606 megawatts of capacity this year and next, data from Bonn-based national grid regulator Bundesnetzagentur show. That compares with a target of at least 10,000 megawatts from new solar and wind installations in 2014 and 2015 under Germany’s renewable energy act, which took effect Aug. 1. Solar output reached a record 24,244 megawatts on June 6, according to EEX.

China Bans Low-Grade Coal, Cuts Wind Power Price

September 16, 2014, 4:56 A.M. ET

China Bans Low-Grade Coal, Cuts Wind Power Price

By Shuli Ren

http://blogs.barrons.com/asiastocks/2014/09/16/china-bans-low-grade-coal-cuts-wind-power-price/?mod=yahoobarrons&ru=yahoo

 

Choking in smog, China is trying hard to move away from dirty coal and into clean energy.

Beijing announced on Monday that, starting next year, it would ban the burning of coal with ash content of more than 16% or sulphur content of more than 1% in its populous eastern cities. This is good news for iron ore, a cleaner substitute to coal for steel making. Australian iron ore miners BHP Billiton (BHP), Rio Tinto (RIO) and Fortescue Metals (FSUMF) rose 0.3%, 0.2% and 1% respectively after spot iron ore price jumped 3.9% today. Not surprisingly, Hong Kong listed Yanzhou Coal (1171.HK/YZC) fell 1.5%.

Separately, Beijing also said it would lower the tariff for wind power. South China Morning Post reported:

The National Development and Reform Commission has proposed to cut each of the current regional benchmark per kilowatt-hour tariffs of 51 fen, 54 fen and 58 fen by four fen, and the 61-fen benchmark by two fen, China Business News reported. The average cut is 6.4 per cent.

The long-expected proposed tariff cut, the first since Beijing set regional subsidised wind power prices in 2009, is aimed to reflect lower wind turbine costs and relieve the financial pressure on the government and consumers that have to bear the costs of rising consumption of clean energy.

This is not good news for Chinese wind power companies, however. Deutsche Bank did some analysis:

By assuming 1) weighted avg. wind tariff lowered from Rmb0.59/kWh to Rmb0.56/kWh for new projects post 1H15 2) new projects having 5.5% effective generation contribution in the 1st year 3) 2,000 utilization hrs for FY15/16, Longyuan, Huaneng Renewables and Huadian Fuxin’s FY15E/16E earnings may be affected by -0.14%/-2.25%, -0.33%/-5.36% and -0.14%/-2.1%, respectively. Earnings impact are lower for Longyuan and Huadian Fuxin because Longyuan has the largest wind capacity base and Huadian Fuxin has lowest contribution from wind (34% in 2013) out of total capacity.

Huaneng Renewables (0958.HK), whose earnings would be most affected according to Deutsche, fell 1.8% today.

Also today, the vice chairman of Aluminum Corp. of China is being investigated for corruption. Its Hong Kong listed subsidiary (2600.HK/ACH) fell 2.9%.

SaskPower executive says coal can be green fuel with new carbon-capture plan

SaskPower executive says coal can be green fuel with new carbon-capture plan
By Steven Chua,
The Canadian Press
September 11, 2014
VANCOUVER – Coal can shed its bad rap by becoming a green energy source as long as carbon-capture technology is used in the process, says an executive with Saskatchewan’s power utility.
Mike Monea of SaskPower told the Coal Association of Canada’s annual conference in Vancouver that a $1.4-billion addition to a current plant will prevent about one million metric tonnes of carbon from being released into the air each year in his province.
“Around the world coal is getting, in my mind, a heck of a bad rap,” Monea said. “We decided back in 2008 to figure out if we can leave coal in our fuel or get rid of it. So we embarked on a mission to build a business case to build the world’s first clean coal plant.”
The provincial government gave SaskPower approval to start building the addition in 2011.
Monea said the pilot project is unique for a commercial enterprise.
“It is the first in the world,” he said in an interview after his speech. “The objective is to reduce the emissions on a coal plant and there’s a lot of coal around, so reduce the emissions and make it an environmentally friendly fuel.”
The project outfits a unit of the Boundary Dam Power Station near Estevan, Sask., with a mechanism that grabs carbon dioxide and transports it through a steel pipeline and into storage.
About 90 per cent of the carbon emissions from that unit will be captured, Monea said, adding that’s the equivalent of removing 250,000 cars from roads for a year.
The carbon is turned into liquid form and stored underground, usually in rock formations that are typically several kilometres below the surface.
SaskPower said the material can be stored there for thousands of years.
“I’m getting very biased towards coal because we can clean it up and we can make the economics work,” Monea told the conference.
He said more than 90 per cent of the stored carbon would be sold to oil companies to be used in a liquefied form to inject into reservoirs, drawing more crude from the ground.
SaskPower has a 10-year contract with Cenovus Energy Inc. (TSX:CVE), a Calgary-based oil company set to buy the captured carbon.
But science and policy manager Ian Bruce of the David Suzuki Foundation said he is cautiously optimistic about the carbon-capture project but is concerned that liquefied carbon could leak into the ground during oil recovery processes.
“I think one of the challenges with this technology is that it hasn’t been proven at large scale,” Bruce said. “When carbon dioxide is injected into these reservoirs, many oil companies are assuming there will be no leaks.”
“However, if these emissions manage to leak to the surface there’s big issues of liability,” he said. These oil companies may not be around when that happens. Who will pick up the bill?”
SaskPower has said it is safe to keep carbon dioxide in oil wells.
“Depleted oil and gas reservoirs have similar properties as saline formations and are considered secure repositories for CO2,” the company says on its website.
Naoko Ellis, a professor of chemical and biological engineering at the University of B.C., said carbon-capture technology is a step forward but burnt coal still produces harmful byproducts such as sulphur dioxide, which causes acid rain.
“It would depend on the source of the coal,” she said. “There are a number of different things that are not in huge quantities but significant enough that would affect the environment.”
Dirt particles would also be a potential problem and could lead to breathing and other health problems, Ellis said.
Monea said the technology at the plant will capture all the sulphur dioxide and 27 per cent of the nitric oxide emitted by the power unit.
Nitric oxide is a colourless, toxic gas generated by power plants and car engines.

Claude Resources Drills 26.77 g/t Gold Over 8.7 m at Santoy Gap – multiples higher

Claude Resources Drills 26.77 g/t Gold Over 8.7 m and Initiates Long-Hole Production at Santoy Gap

 

Trading Symbols: TSX: CRJ; OTCQB: CLGRF

SASKATOON, SK , Sept. 10, 2014 /CNW/ – Claude Resources Inc. (“Claude” and or the “Company”) continues to achieve excellent results from the underground drill program at the Santoy Gap including an intersection of 26.77 grams of gold per tonne over 8.7 metres true width. In addition, long-hole production at the Santoy Gap deposit has been initiated ahead of schedule and is expected to have a positive impact on future production.

2014 Santoy Gap Underground Drill Program

The underground drilling program is designed to define and expand the current Mineral Reserves and Mineral Resources at the Santoy Gap. Results show high grade and excellent widths that are hosted within three distinct vein systems, namely the Santoy Gap 9A, 9B and 9C.

Select highlight holes that have intercepted multiple vein systems are presented in Table 1.  Table 2, which is located at the end of the news release, provides further highlights and information specific to each intercept. All results are reported as cut grade and true width.

Table 1: Highlight Holes Intercepting Multiple Vein Systems Within the Santoy Gap Deposit.

HOLE #

VEIN SYSTEM

9A

9B

9C

GRADE g/t
(cut)

TRUE
WIDTH (m)

GRADE g/t
(cut)

TRUE
WIDTH (m)

GRADE g/t
(cut)

TRUE
WIDTH (m)

SUG-14-027

33.56

4.57

7.71

2.52

4.28

10.21

SUG-14-028

15.35

7.51

4.84

3.42

6.71

7.13

SUG-14-029

50.00

1.88

10.91

10.47

15.17

4.80

SUG-14-034

13.29

2.58

22.54

9.62

4.93

1.72

SUG-14-038

9.87

8.22

20.20

0.87

28.36

2.02

SUG-14-044

8.03

3.39

11.33

7.63

SUG-14-048

6.06

6.34

6.23

4.69

26.77

8.70

“These results and the fact that we are now in production demonstrate why we anticipate the Santoy Gap deposit will have a positive impact on our production profile,” stated Mike Sylvestre , Interim President and CEO. “The significance of these results is that all three structures hosted within the Santoy Gap continue to demonstrate economic grades and widths. The Santoy Gap deposit contains more gold ounces per vertical metre than other ore bodies in the camp and, based on that, we have the opportunity to improve productivity and margins.”

Santoy Gap Development Update

The Santoy Gap development is currently ahead of schedule with long-hole production now underway. Long-hole production was originally expected to begin in the fourth quarter of 2014. From May through July, the Santoy Gap produced approximately 13,000 tonnes at 7.1 grams of gold per tonne. Thus far, the average grade has been 8% higher than the Santoy Gap Mineral Reserve grade of 6.4 grams of gold per tonne. Year to date, the Santoy Gap has had a positive impact on production from the Santoy Mine Complex with overall grades improving to 5.65 grams of gold per tonne in the second quarter versus the 3.66 grams of gold per tonne during the first quarter of this year.

Production ramp up at the Santoy Gap is well ahead of schedule and will become the main contributor of tonnes and ounces mined from the Santoy Mine Complex for the remainder of 2014. Production tonnage from Santoy Gap is expected to average 300 to 400 tonnes per day during the fourth quarter, which is well above the budgeted throughput of 200 tonnes per day. The increase in tonnage and grade from Santoy Gap is expected to drive unit cost improvements going forward.

During the third quarter, the Company engaged an engineering firm to update sections of the Santoy Gap mine plan, focusing on mine design, ventilation and future power requirements. Once completed, the Company will move forward with development to achieve a full production rate of 500 to 700 tonnes per day. Capital expenditures required to achieve the future production ramp up are expected to be minimal and the Company expects to fund its organic growth through internal cash flows.

To view longitudinal sections and plan maps of the Santoy Mine Complex please visit the Company’s website at www.clauderesources.com.

Table 2: Highlights of Santoy Gap Year to Date 2014 Underground Drilling Results.

HOLE #

ZONE INTERSECTION

GRADE g/t
(uncut)

GRADE g/t
(cut)

TRUE
WIDTH
(m)

NAME (Target)

FROM

TO

SUG-14-001

9C

118.50

127.50

4.84

4.84

7.60

SUG-14-001

9B

129.00

132.50

20.74

15.82

2.96

SUG-14-001

9A

138.60

140.50

28.82

23.86

1.61

SUG-14-002

9A

155.40

165.00

9.37

9.37

6.96

SUG-14-003

9C

144.00

149.60

4.51

4.51

3.78

SUG-14-003

9A

171.00

177.00

19.31

19.31

3.99

SUG-14-004

9C

158.10

163.80

7.41

7.41

3.49

SUG-14-004

9B

173.50

181.40

15.55

15.55

4.97

SUG-14-007

9C

136.80

139.40

21.05

21.05

1.91

SUG-14-007

9A

165.00

173.90

5.99

5.42

6.72

SUG-14-008

9A

171.70

174.40

36.23

22.39

1.95

SUG-14-009

9C

133.80

137.10

9.03

9.03

2.48

SUG-14-010

9A

153.00

157.00

5.77

5.77

3.11

SUG-14-016

9C

153.50

157.50

10.16

10.16

2.66

SUG-14-017

9C

131.80

140.20

5.24

5.24

6.19

SUG-14-019

9B

166.50

169.50

17.93

17.93

1.92

SUG-14-020

9A

144.00

151.50

3.51

3.51

6.14

SUG-14-022

9C

120.00

121.50

21.19

21.19

1.23

SUG-14-025

9C

113.10

114.30

67.03

50.00

1.05

SUG-14-026

9C

139.00

147.20

11.95

11.95

5.73

SUG-14-026

9A

156.00

160.50

25.01

25.01

3.16

SUG-14-027

9C

129.10

142.50

4.28

4.28

10.21

SUG-14-027

9B

147.00

150.30

7.71

7.71

2.52

SUG-14-027

9A

157.50

163.50

45.49

33.56

4.57

SUG-14-028

9C

127.30

136.50

6.71

6.71

7.13

SUG-14-028

9B

144.90

149.30

4.84

4.84

3.42

SUG-14-028

9A

151.50

161.20

16.44

15.35

7.51

SUG-14-029

9C

119.50

125.40

27.51

15.17

4.80

SUG-14-029

9B

127.30

140.00

14.75

10.91

10.47

SUG-14-029

9A

145.50

147.80

91.58

50.00

1.88

SUG-14-030

9C

114.40

117.50

5.55

5.55

2.66

SUG-14-031

9B

117.00

123.00

16.31

13.63

5.42

SUG-14-031

9A

128.70

133.50

11.95

11.95

4.33

SUG-14-032

9A

131.90

135.50

5.66

5.66

3.26

SUG-14-033

9C

148.40

152.90

6.86

6.86

2.93

SUG-14-033

9B

160.00

163.30

10.58

10.58

2.18

SUG-14-034

9B

118.30

129.50

36.96

22.54

9.62

SUG-14-034

9A

130.60

133.60

13.29

13.29

2.58

SUG-14-035

9C

116.70

120.20

16.57

16.57

3.07

SUG-14-036

9C

133.20

138.50

11.13

11.13

3.96

SUG-14-037

9B

132.00

136.00

6.89

6.89

3.20

SUG-14-038

9C

112.40

114.70

28.36

28.36

2.02

SUG-14-038

9B

120.00

121.00

20.20

20.20

0.87

SUG-14-038

9A

132.40

141.80

14.97

9.87

8.22

SUG-14-039

9C

120.00

122.00

9.29

9.29

1.64

SUG-14-039

9A

146.80

149.50

9.84

9.84

2.20

SUG-14-041

9C

143.20

148.10

10.57

10.57

3.51

SUG-14-041

9B

151.40

155.40

5.59

5.59

3.05

SUG-14-042

9C

133.90

139.20

53.11

11.89

3.94

SUG-14-044

9C

128.80

139.10

11.33

11.33

7.63

SUG-14-044

9A

156.20

160.80

19.18

8.03

3.39

SUG-14-045

9C

141.30

152.10

8.91

8.91

7.57

SUG-14-045

9B

153.00

156.00

11.58

11.58

2.08

SUG-14-047

9C

159.30

172.50

11.06

11.06

7.36

SUG-14-048

9C

154.00

168.30

30.16

26.77

8.70

SUG-14-048

9B

171.30

179.20

7.04

6.23

4.69

SUG-14-048

9A

185.40

196.20

6.06

6.06

6.34

SUG-14-049

9C

160.80

165.00

13.50

13.50

2.60

SUG-14-049

9B

174.40

178.70

12.49

12.49

2.66

SUG-14-049

9A

193.50

199.00

4.93

4.93

3.36

SUG-14-056

9C

150.40

168.00

7.35

7.35

10.88

SUG-14-308

9A

131.20

139.50

37.04

14.71

4.86

SUG-14-310

9A

107.50

109.00

19.38

19.38

1.00

SUG-14-314

9A

74.20

77.80

5.37

5.37

3.46

SUG-14-316

9A

162.60

169.60

5.76

5.76

3.28

SUG-14-318

9A

137.10

144.80

6.47

6.47

4.39

SUG-14-328

9A

70.20

73.80

12.19

12.19

3.59

SUG-14-329

9A

74.60

78.00

6.38

6.38

3.23

SUG-14-334

9A

159.90

161.30

166.87

50.00

0.73

SUG-14-337

9A

72.20

73.50

48.30

48.30

1.27

Note: Composites are calculated at a 3.5 g/t cut-off and a 50.0 g/t top-cut and may include internal dilution.

Qualified Persons

Brian Skanderbeg , P.Geo. and M.Sc., Senior Vice-president and Chief Operating Officer, is the Qualified Person who has reviewed and approved the contents of this news release. Samples were assayed by Claude’s onsite non-accredited assay lab at the Seabee Gold Operation. Duplicate check assays were conducted on site as well as at TSL Laboratories in Saskatoon . Results of the spot checks were consistent with those reported. Sampling interval was established by minimum or maximum sampling lengths and geological and/or structural criteria.  200 gram samples were pulverized until greater than 80 percent passes through 150 mesh screen. 30 gram pulp samples were then analyzed for gold by fire assay with gravimetric finish (0.01 grams per tonne detection limit).

Claude Resources Inc. is a public company based in Saskatoon, Saskatchewan , whose shares trade on the Toronto Stock Exchange (CRJ.TO) and the OTCQB (CLGRF). Claude is a gold exploration and mining company with an asset base located entirely in Canada . Since 1991, Claude has produced over 1,000,000 ounces of gold from its Seabee Gold Operation in northeastern Saskatchewan . The Company also owns 100 percent of the Amisk Gold Project in northeastern Saskatchewan .

CAUTION REGARDING FORWARD-LOOKING INFORMATION

All statements, other than statements of historical fact, contained or incorporated by reference in this news release and  constitute “forward-looking information” within the meaning of applicable Canadian securities laws and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 (referred to herein as “forward-looking statements”).  Forward-looking statements include, but are not limited to, statements with respect to the future price of gold, the estimation of mineral reserves and resources, the realization of mineral reserve estimates, the timing and amount of estimated future production, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency exchange rate fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims and limitations on insurance coverage.  Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate” or “believes”, or the negative connotation thereof or variations of such words and phrases or state that certain actions, events or results, “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotation thereof. 

All forward-looking statements are based on various assumptions, including, without limitation, the expectations and beliefs of management, the assumed long-term price of gold, that the Company will receive required permits and access to surface rights, that the Company can access financing, appropriate equipment and sufficient labour, and that the political environment within Canada will continue to support the development of mining projects in Canada. 

Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Claude to be materially different from those expressed or implied by such forward-looking statements, including but not limited to:  actual results of current exploration activities; environmental risks; future prices of gold; possible variations in ore reserves, grade or recovery rates; mine development and operating risks; accidents, labour issues and other risks of the mining industry; delays in obtaining government approvals or financing or in the completion of development or construction activities; and other risks and uncertainties, including but not limited to those discussed in the section entitled “Business Risk” in the Company’s Annual Information Form.  These risks and uncertainties are not, and should not be construed as being, exhaustive. 

Although Claude has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.  There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements.  Accordingly, readers should not place undue reliance on forward-looking statements. 

Forward-looking statements in this news release are made as of the date of this news release and accordingly, are subject to change after such date.  Except as otherwise indicated by Claude, these statements do not reflect the potential impact of any non-recurring or other special items that may occur after the date hereof.  Forward-looking statements are provided for the purpose of providing information about management’s current expectations and plans and allowing investors and others to get a better understanding of our operating environment.

Claude does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws.

CAUTIONARY NOTE TO U.S. INVESTORS CONCERNING RESOURCES ESTIMATES

The resource estimates in this document were prepared in accordance with National Instrument 43-101, adopted by the Canadian Securities Administrators. The requirements of National Instrument 43-101 differ significantly from the requirements of the United States Securities and Exchange Commission (the “SEC”). In this document, we use the terms “measured”, “indicated” and “inferred” resources. Although these terms are recognized and required in Canada , the SEC does not recognize them. The SEC permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that constitute “reserves”. Under United States standards, mineralization may not be classified as a reserve unless the determination has been made that the mineralization could be economically and legally extracted at the time the determination is made. United States investors should not assume that all or any portion of a measured or indicated resource will ever be converted into “reserves”. Further, “inferred resources” have a great amount of uncertainty as to their existence and whether they can be mined economically or legally, and United States investors should not assume that “inferred resources”.

SOURCE Claude Resources Inc.

Contact:
Mike Sylvestre, Chairman, Interim President & CEO, Phone: (306) 668-7505 or Marc Lepage, Manager, Investor Relations, Phone: (306) 668-7505, Email: ir@clauderesources.com, Website: http://www.clauderesources.com

The ironies of shipping U.S. coal from B.C.

The ironies of shipping U.S. coal from B.C.

Jeff Rubin

Special to The Globe and Mail

Published Monday, Sep. 08 2014, 8:38 AM EDT

Last updated Monday, Sep. 08 2014, 8:45 AM EDT

 

The latest battleground for U.S. President Barack Obama’s so-called war on coal isn’t even in the lower 48 states. It’s across the border in British Columbia’s densely populated lower mainland where a recent proposal to expand Port Metro Vancouver’s Surrey operation could offer a backdoor exit for U.S. coal to escape to Asia.

Environmental groups have lauded the Obama administration for its work in slashing emissions from dirty coal-fired power plants in the U.S. Less well known are its efforts to sell mining leases on federally owned land to promote coal exports abroad. Some 40 per cent of U.S. coal production comes from government land, much of it found in wide-open western states such as Montana and Wyoming.

In theory, the U.S. Department of the Interior, through its Bureau of Land Management, is supposed to auction mining leases to federal lands to the highest bidder. In practice, though, the Bureau ends up giving them away for a relative song. The green lobby argues that the full cycle environmental costs from combusting this coal should be accounted for in the prices paid for mining leases. Such costs are part of what the U.S. State Department is trying to get a handle on as it deliberates on the cross-border Keystone XL pipeline project.

When it comes to climate change, the fact that U.S. coal will be burned in Asia doesn’t change its carbon footprint. Coal that’s mined in Wyoming’s prolific Powder River Basin has the same atmospheric impact whether it’s burned at home or in a power plant outside of Shanghai.

As the coal industry is finding out, however, getting U.S. coal to Asia is becoming a taller order. Before any buyers and sellers can come together, the coal must first make it to tidewater where it can be loaded on a ship and moved across the Pacific. Like landlocked Alberta bitumen, coal from the Powder River Basin is a long way from the coast. If geography was the only issue that would be one thing, but it’s not. Just as Nebraska doesn’t want the Keystone XL pipeline running through its backyard, coastal states such as Washington and Oregon don’t want to see an endless string of coal trains hauling millions of tons of coal to export terminals on the Pacific.

In Oregon, a proposal to ship 8.8 million tons of coal a year from an export terminal at the mouth of the Columbia River was rejected by state regulators last month on the grounds that it would damage marine ecosystems, as well as pose a threat to traditional fishing grounds of the region’s Native American tribes. Plans for similar terminals in neighbouring Washington State are expected to meet a similar fate at the hands of like-minded regulators.

Enter the Fraser Surrey Docks outside of Vancouver. As doors to export coal close in the U.S. northwest, the industry is prying another one open north of the border. Despite opposition from local environmental groups, a few weeks ago Port Metro Vancouver approved a proposal to develop a coal-loading facility with a capacity to handle 4 million tons a year. The operation would transfer coal from rail cars to barges, which would then carry it to nearby Texada Island where it would be loaded on ships and transported to Asia. Mining companies in the Powder River Basin couldn’t be happier about this development, since most of the coal that will be passing through Canada will be coming straight from Wyoming.

The ironies here are abundant. If Mr. Obama is committed to reducing carbon emissions from burning coal on the one hand, why is his administration so busy promoting coal exports on the other? Why also is eco-friendly British Columbia, home of a provincial carbon tax designed to reduce the use of fossil fuels, being such a willing conduit for transporting U.S. coal to Asian markets? Isn’t this the same B.C. that doesn’t want to allow Alberta bitumen to flow through the proposed Northern Gateway pipeline to Kitimat? It’s also hard to miss the irony of Canada being used as an escape hatch for coal exports when the U.S. won’t play a similar role for oil sands crude via the Keystone project.

Seeing B.C. so willing to handle Wyoming coal is somewhat disconcerting given the province’s environmental credentials and the reluctance of Oregon and Washington to do the same. Without export terminals, much of the Powder River Basin’s coal reserves will stay in the ground. Isn’t that what the Obama administration – despite the mixed messages of its war on coal – is after in the first place?

Alaska requests greater involvement in oversight of large B.C. gold mine

Alaska requests greater involvement in oversight of large B.C. gold mine
JAMES KELLER
VANCOUVER — The Canadian Press
Published Friday, Aug. 22 2014, 8:22 PM EDT
Last updated Friday, Aug. 22 2014, 8:24 PM EDT
“The state of Alaska has important obligations to our citizens relating to the protection of fish, wildlife, waters and lands that we hold in trust,” says the state’s letter, signed by three senior bureaucrats.
They request in the letter that the state be involved in the authorization and permitting process for the KSM mine, the development of enforcement provisions in those permits, and the development of monitoring programs for water quality and dam safety.
Alaska has already been consulted during both the provincial and federal environmental reviews, which is routine for projects that could affect neighbouring jurisdictions, but the vast majority of permitting work occurs after an environmental certificate is issued.
Kyle Moselle of Alaska’s Department of Natural Resources said the state has developed a good relationship with Canadian regulators, but he said that shouldn’t stop when the environmental assessment process is over.
“As far as I know, we have not sought direct involvement in the permitting or monitoring processes for a large hard rock mine proposed in northwest B.C.,” Mr. Moselle said in an interview Friday.
“That’s really where the enforceable provisions of how the project will be constructed, operated and monitored are laid out. That’s the process we want to be involved in.”
Environmentalists, aboriginal groups and commercial fishermen in Alaska claim the project poses a risk to rivers that flow into their state, and they’ve pointed to a recent tailings spill at an unrelated mine in central B.C. to amplify those concerns.
The tailings dam at the Mount Polley mine failed almost three weeks ago, releasing millions of cubic metres of water and silt into the surrounding watershed and raising fears about the potential impact on the environment and fish. The B.C. government says testing has so far indicated water and fish in the area are safe for human consumption.
The KSM project would be located near the Unuk River system, which also flows into Alaska, though its tailings facility would be in the Nass River watershed, which empties into the Pacific Ocean in B.C.
While the tailings facility won’t be located near the Unuk, treated effluent is expected to be discharged into the river.
Critics of the KSM mine in Alaska have called for the Canadian Environment Minister to refer the project to a more detailed process known as a panel review, which was used to evaluate the failed New Prosperity mine in central B.C. before the federal government rejected it.
In its letter, the state of Alaska does not take a position on whether a panel review is necessary.
“This letter includes the state’s request that you carefully consider the numerous petitions for a panel review and how the underlying public concerns might be best addressed, whether through such a review or other processes,” says the letter.
Ted Laking, a spokesman for Environment Minister Leona Aglukkaq, said the government is reviewing a study report from the Canadian Environmental Assessment Agency and that it would be inappropriate to comment.
He referred further questions to the Canadian Environmental Assessment Agency, which did not respond.
Seabridge has said it has worked hard to address concerns in Alaska, and the company insisted the project will have no impact on American rivers or fish.
A spokesperson for Seabridge was not immediately available on Friday.

British Columbia orders independent reviews of all province’s tailings dams

British Columbia orders independent reviews of all province’s tailings dams
By: Henry Lazenby
18th August 2014
TORONTO (miningweekly.com) – In the wake of Imperial Metals’ Mount Polley mining disaster, the British Columbia government on Monday ordered independent third-party reviews of 98 permitted tailings impoundments at 60 operating and closed metal and coal mines in the province.
Under the Health, Safety and Reclamation Code for Mines in British Columbia, the deadline for a normal yearly dam safety inspection would have been March 31, 2015, and would not have required an independent third-party review.
However, the chief inspector of mines accelerated the date for inspections to December 1, and added the requirement for an independent review by a qualified, third-party, professional engineer from a firm not associated with the tailings facility.
The chief inspector’s order also included a requirement for a third-party review of the dam consequence classifications by December 1. A dam’s consequence classification was based on the potential impact to population, the environment, cultural values and infrastructure should it fail, and was set according to the Canadian Dam Association Dam Safety Guidelines.
Under the order, mines with high, very high or extreme consequence classifications would be required to have their emergency preparedness and response plans reviewed by an independent third-party.
INDEPENDENT INVESTIGATION
Further, the provincial government, with the support of the Soda Creek Indian Band and Williams Lake Indian Band, also ordered an independent engineering investigation and inquiry into the Mount Polley tailings pond breach two weeks ago, that sent billions of litres of mine waste and fine sand into the pristine environment.
The investigation would be undertaken by a panel of three experts that will examine the cause of the Mount Polley tailings dam failure, including geotechnical standards, design of the dam, maintenance, regulations, inspections regimes and other matters the panel deemed appropriate.
This panel had been given the ability to compel evidence and the Energy and Mines Minister Bill Bennett had been given permission to require the Imperial Metals to cover costs of the inquiry.
The independent engineering investigation and inquiry would be the first step of a two-step process, the government said. The independent panel would first conduct an investigation and provide recommendations through a final report by January 31, 2015, which would determine why the tailings dam failed, after which the government and First Nations would receive the recommendations.
The report’s findings would only then be shared with the public, and its recommendations implemented by government as needed and where appropriate, to ensure such an incident “never” happened again.
ENVIRONMENTAL CONCERN
The environmental disaster came in the face of several government and industry-backed energy and resource developments were already coming under closer examination from Aboriginal groups and environmentalists, who worried that the risks might overshadow the rewards.
British Columbia’s Ministry of Energy and Mines (MEM) revealed Monday that officials investigated an incident on May 24, which had found the height of the tailings pond was above regulation. This occurred in a different area of the tailings pond than the recent dam failure.
The MEM issued Mount Polley with an advisory, stating that the distance between the water elevation and the crest of the dam (freeboard) was less than one metre. The tailings pond level subsequently returned to authorised levels and freeboard was about 2.4 m when last measured.
The MEM said that mine records showed that the operation was carrying out visual dam inspections and measuring freeboard at an acceptable frequency, including daily measurements after the incident.
On August 30, 2012, the MEM issued a warning to Mount Polley Mining Corporation for failure to report exceeding the height of effluent for the perimeter pond. This perimeter pond overflowed, releasing about 150 m3 of effluent over 13 hours to the environment.
Edited by: Creamer Media Reporter

Imperial Metals raising $100-million to clean up B.C. spill

Imperial Metals raising $100-million to clean up B.C. spill
Reuters
Published Friday, Aug. 15 2014, 12:01 PM EDT
Last updated Friday, Aug. 15 2014, 2:07 PM EDT
Imperial Metals Corp., the company behind last week’s major spill of mine waste in Western Canada, is raising $100-million in debt to cover cleanup costs and finish building its newest mine.
The tailings dam burst at Imperial’s Mount Polley copper and gold mine in British Columbia, an accident that analysts say could cost between $50-million and $500-million to clean up.
“While the precise costs of remediation and repair are presently unknown, the company believes that the costs can be managed over time, given the underlying value of the company’s assets and by the resources provided by the additional financing,” Imperial said in a release late on Thursday that boosted investor sentiment in the company’s prospects.
Shares of the miner, which have fallen sharply since the spill, rose 5.8 per cent to $9.24 in early trading on the Toronto Stock Exchange on Friday.
Mount Polley has been closed indefinitely, costing Imperial a key source of cash.
The Canadian company said it would issue $100-million worth of convertible debentures.
Top Imperial shareholder N. Murray Edwards, the billionaire chair of oil and gas company Canadian Natural Resources Ltd., is a key part of the company’s response to the spill.
His Edco Capital and affiliates have committed to buy $40-million of the issue, and Edco has committed to buying more if needed to ensure Imperial raises the full $100-million.
Imperial said the Fairholme Partnership LP has also committed to buy $40-million. The Fairholme Partnership is a hedge fund launched last year by Bruce Berkowitz’s Miami-based Fairholme Capital Management.
RED CHRIS STILL NEEDS PERMIT
Imperial’s new Red Chris mine, also in British Columbia, is almost fully built, but it needs one more permit approved before it can start production, said Steve Robertson, vice-president of corporate affairs, in a message on Wednesday.
The permit is required before Imperial can deposit tailings into a storage facility at Red Chris, Robertson said, noting that the process of obtaining the approval is under way.
On Thursday, British Columbia’s Information and Privacy Commissioner said she will investigate whether the province’s government should have warned the public about risks posed by Mount Polley.
“In the aftermath of the breach, concerns are being raised about what government knew about the condition of the Mount Polley mine and whether the public should have been notified of potential risks before the disaster occurred,” said Commissioner Elizabeth Denham in a release.

Great Western Minerals Reports Second Quarter 2014 Results – revenues up 31%

More at http://finance.yahoo.com/news/great-western-minerals-reports-second-213053779.html

Great Western Minerals Reports Second Quarter 2014 Results

 

SASKATOON, SK–(Marketwired – Aug 13, 2014) – Great Western Minerals Group Ltd. (“GWMG” or the “Company”) (TSX VENTURE: GWG) (OTCQX: GWMGF), a leader in the manufacture and supply of rare earth element-based metal alloys and holder of a low cost, high-grade critical rare earth element mineral property in the Western Cape province of South Africa (“Steenkampskraal” or “SKK”), today reported its second quarter financial results through June 30, 2014, and provided an update on the Company’s activities. All amounts are presented in Canadian dollars unless indicated otherwise.

Highlights and Results:

  • Second quarter revenue increased 31% to $5.6 million over the prior-year period on strong alloy sales as a result of enhanced capabilities and increased customer demand. Revenue was generated by the Company’s production subsidiary Less Common Metals Limited (“LCM”)
  • Released the Steenkampskraal project’s feasibility study results during the quarter; Company moving permit process forward and focused on securing financing to develop the project
  • Company had $13.1 million in cash as of June 30, 2014

Marc LeVier, Company President and CEO, commented, “During the first half of this year, we successfully advanced our mine to metals strategy. We completed and published the Steenkampskraal feasibility study, which reinforced our belief that we have the industry’s best sized, most economically viable, high grade critical rare earth asset that can be produced in a cost effective manner. We also focused much time and energy on implementing efficiencies throughout the organization as we build a foundation to support future progress at SKK and LCM.”

Mr. LeVier added, “Since the conclusion of the feasibility study, we have continued to progress permit applications for the SKK operation and have been actively targeting sources of additional financing which would allow continuation of the Company’s operations and for the development of the Steenkampskraal project. We have also had very preliminary discussions with the Company’s bondholders surrounding the potential restructuring of our current debt.”

Manufacturing Services

Manufacturing services revenue was $5.6 million in the second quarter of 2014, a $1.3 million, or 31%, increase over the same period of the prior year as higher volumes and favorable exchange rates more than offset declining alloy prices. In the recent quarter, the Company sold 85 metric tonnes of alloys compared with 69 metric tonnes of alloys in the second quarter of 2013. The increase in volume can be attributed to increased customer demand for product from the new strip cast furnaces that are now fully commissioned. Future growth will continue to be dependent on the Company’s ability to obtain the necessary rare earth materials at competitive pricing. The Company is working with its customers to identify sources of raw material to meet their short-term demands until the SKK project is developed and production is achieved.

Gross margin of $1.1 million was relatively consistent with the prior-year period; however, as a percent of revenue, gross margin declined to 19.9% from 24.8%. Margin contraction primarily reflected a change in product mix as higher volume, lower margin sales occurred during the second quarter of 2014 compared with the prior-year period. The manufacturing services segment generated a loss of $1.1 million from continuing operations in the second quarter of 2014 compared with a loss of $0.4 million in the 2013 period.

During the 2014 second quarter, the Company completed a sale of certain assets of its Great Western Technologies Inc. (“GWTI”) operation. GWTI paid US$741,836 for the acquirer to assume GWTI’s lease obligations and US$1.2 million in restoration liabilities associated with the GWTI operation. As a result, the acquirer assumed ownership of GWTI’s property, plant, equipment and inventory. Accordingly, the results of GWTI and cash flows of GWTI’s operations have been separately presented as discontinued operations in the Company’s condensed consolidated interim statements of comprehensive loss and condensed consolidated interim statements of cash flows.

Steenkampskraal Project

During the 2014 second quarter, the Company’s focus was on various technical and engineering studies, mine planning activities, and working with its independent consultants to enable the completion of the SKK project feasibility study. The Company expended $0.8 million during the quarter on those activities compared with $2.4 million for various exploration and evaluation investigations during the second quarter of 2013.

In early May, the Company announced the results of the SKK project feasibility study, indicating the following highlights:

  • $274 Million after-tax net present value applying a 10% discount rate
  • 50% after-tax internal rate of return
  • 3.3 year estimated payback period
  • 13-year life of mine
  • Initial capital expenditures of $118.8 million with post commercial production capital expenditures of $51.5 million

The National Instrument 43-101 compliant technical report containing the results of the feasibility study and the reserves estimate was filed on the SEDAR website on June 20, 2014.

The Company also continued to progress applications with the Department of Energy’s National Nuclear Regulator, Department of Mineral Resources and on the Department of Water Affairs integrated water use permit. In addition, the Company is reviewing capital expenditure improvement opportunities and optimization testing in the lab on several aspects of the process flow sheet. Great Western continues to work toward obtaining an acceptable tolling arrangement for the separation of the mixed rare earth carbonate concentrate that will be produced at SKK.

Liquidity

The Company’s cash and cash equivalent position at June 30, 2014 was $13.1 million compared with $23.6 million at the end of 2013. The Company continues to take a prudent approach to expense management and has significantly reduced its monthly cash outlays following various operational efficiency initiatives.

On April 7, 2014, the Company made its fourth semi-annual interest payment of US$3.6 million to service its convertible bonds and the first from funds not held in escrow. The Company believes that its current capital level will allow it to perform certain regulatory and compliance work and make its scheduled interest payments for 2014.

Qualified Persons

Victor-Mark Fitzmaurice, Pr. Eng. M. Engineering (Mining), Managing Director of Rare Earth Extraction Co. Limited and Steenkampskraal Monazite Mine (Pty) Ltd., is the Qualified Person (as defined in NI 43-101) responsible for supervising the preparation of the technical content of this news release.

Teleconference and Webcast

The Company will host a conference call and webcast to review its results, key market initiatives and business strategy on Thursday, August 14, 2014 at 11:00 a.m. ET. A question-and-answer session will follow.

The conference call can be accessed by calling (201) 689-8471. The live listen-only audio webcast can be monitored on the Company’s website at www.gwmg.ca, where it will be archived afterwards, along with a transcript once available.

A telephonic replay will be available from 2:00 p.m. ET the day of the teleconference until Thursday, August 21, 2014. To listen to the archived call, dial (858) 384-5517 and enter replay pin number 13585619.

About GWMG

Great Western Minerals Group Ltd. is a leader in the manufacture and supply of rare earth element-based metal alloys. Its specialty alloys are used in the battery, magnet and aerospace industries. Produced at the Company’s wholly-owned subsidiary, Less Common Metals Limited in Ellesmere Port, U.K., these alloys contain transition metals, including nickel, cobalt, iron and rare earth elements. As part of the Company’s vertical integration strategy, GWMG also holds 100% equity ownership in Rare Earth Extraction Co. Limited, which controls the Steenkampskraal monazite mine in South Africa. The Company also holds interests in three rare earth exploration properties in North America that are not active.

The Company routinely posts news and other information on its website at www.gwmg.ca.

Email inquiries can also be made to info@gwmg.ca.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

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