Category: Resource Stocks

Copper Mountain Mining has released 2019 operating results and provided three-year production guidance for its 75% owned Copper Mountain mine. The company’s total production of 87.2 million lb. copper-equivalent last year came in at the lower end of its guidance range of 86 million lb. to 95 million lb. for the year with 22.6 million copper-equivalent pounds produced in the fourth quarter.

Over the next three years, the miner expects production around the 100 million lb. copper-equivalent level with a plant expansion to 45,000 tonnes per day, up from 40,000 tpd currently, expected to be commissioned by the end of this year.

“We are now well positioned to deliver strong production, improved grades and lower cost as a result of the significant development completed in 2019 at the Copper Mountain mine,” Gil Clausen, the company’s president and CEO said in a release. “The benefits of that investment were evident in the fourth quarter of 2019, with strong production and grade improvement as we opened up more high-grade zones in our main pit.”

The improvements in grade are expected to continue into this year.

In 2020, all-in sustaining costs are forecast at $1.95 to $2.20 per lb. of copper. An additional $33 million is planned for expansion projects, primarily allocated towards the concentrator expansion at Copper Mountain.

The company acquired the Copper Mountain mine in 2006 and started production in 2011 with a 35,000 tpd mill.

Current reserves across the Copper Mountain project stand at 477 million tonnes grading 0.23% copper, 0.1 g/t gold and 0.73 g/t silver for a current mine life of 31 years. The company is currently working on a pre-feasibility study to examine the option of a plant expansion beyond the 45,000 tpd level.

Mitsubishi Materials holds a 25% stake in the Copper Mountain project.

(This article first appeared in the Canadian Mining Journal)

Treasury Metals has released initial results from a 15,000-metre drill program it began in December at its flagship Goliath gold project in northwestern Ontario, including 7 metres of 14.8 g/t gold in the Eastern C Zone.

Highlights from the Main zone at the project include:

• 6.3 metres of 7.4 g/t gold, including 4 metres of 10.13 g/t gold from 214.7 metres depth in hole 505;
• 7 metres of 5.2 g/t gold from 189 metres depth in hole 502; and
• 4 metres of 6.2 g/t gold from 270 metres depth in hole 507.

Highlights from the Eastern C Zone target, where infill and expansion drilling are being conducted, include:

• 7 metres of 14.8 g/t gold (including 1 metre of 101 g/t gold) from 449 metres depth in hole 503;
• and in hole 506, 1 metre of 14.6 g/t gold (from 400 metres), 1 metre of 11.8 g/t gold (from 339 metres) and 1 metre of 8.13 g/t gold (from 422 metres) . This hole intersected a newly discovered lens of high-grade mineralization east of existing resources.

Results from the Eastern C Zone show consistent zones of strong alteration and a mineralized envelope with high-grade lenses within it. Treasury reports that some holes designed to test the Eastern C Zone target unexpectedly intersected Main zone mineralization.

Infill drilling will continue at the C Zone and at the eastern area of the Main zone before new downhole targets are tested. The drill campaign includes 5,000 metres aimed at upgrading inferred resources at the C Zone East area; 5,000 metres to test recent targets identified through a downhole IP survey; and 5,000 metres for exploration drilling on strike extensions across the Goliath property.

The project, 20 km east of Dryden, contains measured and indicated resources of 15.3 million tonnes grading 2.26 g/t gold and 8.2 g/t silver for 1 million contained ounces of gold and 4.3 million oz. silver. Inferred resources add 2 million tonnes grading 3.43 g/t gold and 8.8 g/t silver.

According to a preliminary economic assessment that was released in 2017, the initial capex for an open pit and underground mine at Goliath would be C$133 million with an after-tax net present value of C$306 million and an internal rate of return of 25%.

Treasury Metals received federal approval environmental assessment approval last August and can now apply for final permits needed to start construction.

(This article first appeared in the Canadian Mining Journal)

Frik Els

Investment in battery manufacturing plants and electric vehicle factories continue to boom around the world, but for now the market for lithium shows no signs of emerging from a four-year slump.

Prices for the raw material used in lithium-ion batteries fell again at the end of last year according to the December price assessment released by industry tracker Benchmark Mineral Intelligence.

The Benchmark Lithium Index declined to its lowest point since January 2016 in December, down more than 36% on the start of the year. The weighted carbonate price fell to below $8,000 a tonne while hydroxide prices now average just over $10,000.

Industry participants are expecting further pressure on prices at the start of 2020 which could threaten the future of higher-cost suppliers. 

Hard rock miners have been hardest hit with the price of spodumene concentrate (6% lithium for hydroxide manufacture) fell another 3.5% during October to average $450–$510 a tonne. That a 45% drop in the last year.

Thanks to a slew of new hard-rock mines and expansions, Australia quickly became the number one producer of lithium over South American brine producers, but the additional supply and weakening conditions in the downstream industry in China, responsible for as much as 80% of global processing, have piled pressure on prices.

Canadian lithium hopeful Nemaska has filed for bankruptcy and Australian spodumene (feedstock for lithium hydroxide) producers have trimmed expansions plans, scaled back projects, reduced output targets and mothballed mines in an effort to shore up the market, but Benchmark says cutthroat competition in China could push prices down further:

With new spodumene producers feeling the strain of lower pricing there is limited scope for further decreases, however Chinese converters are also facing an increasingly competitive chemical market. 

As a result, industry participants are expecting further pressure on prices at the start of 2020 which could threaten the future of higher-cost suppliers. 

Cecilia Jamasmie

German engineering giant Siemens will decide by Monday on its involvement in the controversial Carmichael coal mine being built in Australia by India’s Adani, chief executive, Joe Kaeser, said on Friday.

Climate activists and mine opponents are asking the company not to provide a key piece of rail infrastructure to transport coal from the mine, in Queensland, to ports.

“While we understand why people focus on this one project, we follow a broader approach in order to fight climate change and supply people around the world with affordable and reliable electricity,” Siemens said in a statement announcing the deal on Dec. 11.

Source: @JoeKaeser.

The firm, however, yielded to pressure, delaying a final decision on the 20 million euros ($22m) contract to provide a rail signalling system for the project to next week.

Speaking after meeting climate activist Luisa Neubauer in Berlin, Kaeser told journalists he had offered her a seat on the supervisory board of the group’s new Siemens Energy division, Reuters reported. Neubauer did not join the news conference.

Organized groups have called for demonstrations at Siemens sites across Germany on Friday, arguing that while Siemens “promises in Germany to take responsibility for the climate and become carbon-neutral by 2030, [it supports] a backward-looking project in Australia, as well as the destruction of our planet and our future.” 

Final decision on Siemens’ 20 million euros ($22m) contract to provide a rail signalling system for Carmichael coal project will be announced on Monday.

The Carmichael mine, expected to produce 8-10 million tonnes of thermal coal a year, was approved by the state government in June 2019 after a near decade-long struggle with regulators and environmental protesters.

It has battled a string of lawsuits from environmental groups and scientists, who argue it will contribute to global warming and damage Australia’s Great Barrier Reef.

According to official estimations, Carmichael will contribute $2.97 billion each year to Queensland’s economy and will create 1,500 direct and 6,750 indirect jobs during ramp up and construction.

Thermal coal is one of the largest sources of greenhouse gas emissions. If burnt, output from Carmichael would release 700m tonnes of carbon dioxide into the atmosphere every year for more than 50 years.

Several projects are seen following in the Galilee if Adani builds infrastructure to connect it to the state’s rail network.

Canada and the US announced Thursday they have finalized the Canada–US Joint Action Plan on Critical Minerals Collaboration, aimed to advance the countries’ mutual interest in securing supply chains for the critical minerals needed for manufacturing sectors, communication technology, aerospace and defence, and clean technology. 

In June, US President Donald Trump and Canadian Prime Minister Justin Trudeau ordered officials to develop a plan for U.S.-Canada collaboration on critical minerals. 

Thurday’s announcement delivers on the June 2019 commitment. 

In June, US President Donald Trump and Canadian Prime Minister Justin Trudeau ordered officials to develop a plan for US-Canada collaboration on critical minerals

The Action Plan will guide cooperation in efforts to secure critical minerals supply chains for strategic industries and defence; improving information sharing on mineral resources and potential; and cooperation in multilateral fora and with other countries. 

Washington has grown concerned about its dependence on imports of rare earth minerals from China after Beijing suggested using them as leverage in their trade war. 

 This Action Plan promotes joint initiatives, research and development cooperation, supply chain modelling and increased support for the critical minerals industry. 

Experts from both countries will convene in the coming weeks to advance joint initiatives to address shared mineral security concerns — helping ensure the continued economic growth and national security of both Canada and the U.S. 

(With files from Reuters)

Frik Els

After spiking to a near six-year high when news of an Iranian missile attack on a US base in Iraq first broke, the price of gold plummeted on Wednesday.

Wednesday was one of the worst trading sessions in dollar terms in gold market history with the gold price dropping to $1,553.40 an ounce in afternoon trade – down 3.7% or $59.90 an ounce from the high hit in after hours trade on Tuesday.

Gold came under heavy selling, with the volume of contracts on the Comex market in New York for February delivery gold traded reaching the equivalent of 78.7m troy ounces by late afternoon (vs annual global gold production of ~100m ounces). That’s roughly $124 billion worth of gold traded in a single session.

Wednesday was one of the worst trading sessions in dollar terms in gold market history

Gold’s pullback came after tensions between the US and Iran were calmed somewhat by US President Trump when he said the Middle Eastern country “appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world.” Trump spoke after it became apparent that Iran was careful to avoid US casualties in its retaliation for the US killing of the country’s top general.

History suggests that gains driven by geopolitical tensions alone are usually short-lived, Macquarie Group strategists including Marcus Garvey said in a report quoted by Bloomberg yesterday:

“To illustrate this with the examples of Gulf War 1, the World Trade Center attack of 9/11 and last year’s strike on Saudi Aramco’s Abqaiq facility, gold prices initially jumped higher but were ultimately unable to sustain their newly elevated level,” they said.

Volatility

The gold futures market has been quiet in recent years, but today’s fallback is in dollar terms the biggest fall in the price since 2013 when gold was trading at today’s levels in the mid-$1,500s.

Gold ended the day on April 15, 2013 over $87 below the previous closing – and never recovered on its way to $1,050 an ounce three years later. On that day, 10 million ounces traded within 30 minutes described as a “shock and awe” trading strategy by a short seller.

Gold hit a record $1,909 an ounce intra-day on 23 August 2011, but the next day suffered one of its few triple digit one-day losses when it plummeted $105, ending the week down more than 10% from the all-time high.

Adjusted for inflation, gold’s highest price point ever was on January 21, 1980 when the precious metal hit $850 only to plunge the very next day to $737.50, a 13% fall.

The biggest fall in percentage terms came in February 1983, when the yellow metal fell from $475 to $408.50 over two days, a 14% decline.  

Havilah Resources (ASX: HAV) confirmed the presence of elevated levels of REE at its flagship Kalkaroo project in South Australia.

In a press release, Havilah said the discovery was made after re-assaying selected retained drill samples from the Kalkaroo copper-gold-cobalt deposit and the Croziers copper prospect.

Studies have commenced on the Kalkaroo copper-gold project to investigate the potential for economic recovery of a REE concentrate as a by-product

According to the miner, two copper-gold mineralised reconnaissance aircore drill hole samples, recently re-assayed from West Kalkaroo, show elevated levels of Nd, Pr, Dysprosium (Dy) and Terbium (Tb). These four REE make up approximately 80% of the potential value of REE in the two drill samples.

“The levels of these REE in the underlying copper ore types (e.g. native copper, chalcocite and chalcopyrite) is yet to be determined, although it is noted that previous limited La assay values were generally elevated,” the company’s media brief states.

Havilah also reported that composites of 11 drill samples also recently re-assayed from two reverse circulation drill holes at the Croziers copper prospect returned similarly elevated REE, although with higher relative proportions of the light-REE, namely La and Ce.

“The critical questions for Havilah are what mineral(s) host the REE and can the REE be recovered and concentrated to produce a saleable, direct shipping by-product along with copper concentrates,” Havilah’s technical director, Chris Giles, said in a statement.

By Cecilia Jamasmie

The world’s largest copper producer, Chile’s Codelco, has issued in New York 10-year dollar-denominated bonds to secure funding for its multibillion-dollar upgrade projects and refinance debt.

The state-owned copper giant has also reopened a 30-year bond placement issued last year as part of a fresh funding strategy that includes taking out loans and selling non-structural assets. 

Issuing long-term debt should allow Codelco refinance its short- and medium-term debt.

“A favourable debt market, with rates at historically low levels, makes it attractive to pre-finance our cash needs of 2021,” Codelco’s vice president of administration and finance, Alejandro Rivera, said in the statement.

The company’s objective is to secure financing for its sprawling 10-year, $40 billion mines overhaul as many of its aging operations have been dogged by declining ore grades and increasing costs.

Codelco has already kicked off one of its most ambitious plans — the $5.6 billion conversion of the giant Chuquicamata open pit mine into an underground operation.

The next major mine overhaul is a $5.5 billion new level at El Teniente underground mine, the company’s largest, which fell under chief executive Octavio Araneda’s mandate in his previous role of vice-president of operations at the company’s central and southern divisions.

In the copper giant’s pipeline of so-called structural projects are also a $1.3 billion expansion at the Andina mine, a $1 billion upgrade at Salvador and the expansion of Radomiro Tomic, which doesn’t have an estimated capital expenditure yet.

This is the fourth time since 2017 that Codelco issues long-term debt to refinance its short- and medium-term debt as the sector continues to face low copper prices.

The company, which produces nearly 10% of the world’s copper, returns all its profits to the state and is funded by a mix of capitalization and debt.

By Cecilia Jamasmie

Brazil’s Atlantic Nickel has resumed commercial production at its vast Santa Rita mine in the northeastern state of Bahia and said the first sale of concentrate will be shipped this month.

The operation, one the world’s largest open pit nickel sulphide mines, was halted in 2015 due to low nickel prices. Plans to restart activities were set in motion when Appian Capital Advisory acquired the mine through the bankruptcy process of its previous operator, Mirabela Nickel, in 2018.

Santa Rita, one the world’s largest open pit nickel sulphide mines, was halted in 2015 due to low nickel prices. 

Santa Rita is a fully permitted, past-producing nickel mine with an estimated annual production capacity of 6.5 million tonnes of nickel in sulphide concentrate.

Since blasting restarted in July, Atlantic Nickel has achieved several operational milestones on or ahead of schedule. Refurbishment of the plant is complete, and the ramp-up of commissioning activities has resulted in early production of nickel concentrate, the miner said.

To date, Atlantic Nickel has produced over 11,000 tonnes and has entered into a three-year offtake contract for a portion of Santa Rita’s production plus a $40.8 million financing arrangement with Trafigura.

“The deal provides the remaining funding required for the restart of the project and establishes a strong relationship with a best-in-class global commodities trading firm,” the miner said in the statement.

Following on recent drilling results, an updated open pit reserve statement is planned for completion in the first quarter of 2020 and the company expects to undertake further drilling this year to continue to grow and define the long life underground resource potential.

Nickel was, by far, the best performer among the London Metal Exchange’s metals last year and is set to remain strong due to an expedited ban on nickel ore exports from Indonesia effective Jan. 1, 2020.

The latest results from the Silver Coin deposit at Ascot Resources’ Premier gold project continue to suggest presence of high-grade mineralization at this zone.

Drill highlights include:

• 6.69 metres of 30.81 g/t gold;
• 3.2 metres of 28.96 g/t gold;
• 4.59 metres of 12.24 g/t gold.

“The new intercepts underpin a better understanding and predictability of the geological model and provides Ascot a stronger base to work from for the development of the forthcoming updated resource statement and feasibility study,” Derek White, Ascot’s president and CEO said in the release.

These latest drill results were testing the northern and southern extents of the Silver Coin deposit. According to the company, the infill results came in ahead of forecasts with an expected positive impact when integrated into the forthcoming resource update for the project.

The Silver Coin deposit is located 5 km north of the Premier mill and 800 metres south of the Big Missouri deposit.

Based on processing at the Premier mill in 1991, Silver Coin ore averaged 8.88 g/t gold. Ascot acquired this deposit in 2018 and is currently preparing an associated mine plan using side hill access.

Current Silver Coin indicated resources stand at 859,000 tonnes grading 8.01 g/t gold for a total of 221,000 oz. with additional inferred resources of 1.2 million tonnes grading 7.78 g/t gold for a total of 289,000 oz with additional contained silver in both categories.

Premier is situated within B.C.’s Golden Triangle and is host to five deposits with existing resource estimates. Ascot also holds the Red Mountain project, an estimated 10 km away. The Premier project is host to a mill, tailings facility and water treatment plant as well as historical underground workings.

Work is currently underway on an integrated feasibility study. Last month, Ascot released results of drilling on the central and southern parts of Silver Coin.

(This article first appeared in the Canadian Mining Journal)