Trevali Mining has released its 2020 production results and released production and costs guidance for 2021. Last year, the miner generated 313 million lb. of zinc, in line with its guidance for 312 million lb. to 327 million lb. for the year. Lead production came in at 30 million lb., above the 23 to 25 million lb. forecast, with an additional 752,000 oz. of silver, in line with the 742,000 to 762,000 oz. expected.

The majority of the company’s zinc output, at 150 million lb., came from the Perkoa underground mine n Burkina Faso, with a further 86 million lb. contributed by the Rosh Pinah underground site in Namibia.

The Caribou mine in New Brunswick, which temporarily stopped production in March 2020 due to the covid-19 pandemic and weak zinc market conditions, generated 15 million zinc lb. Earlier this month, Trevali announced that it plans on restarting the mine in early February.

This year, the company expects to produce 330 to 360 million lb. of zinc, at all-in sustaining costs of $90¢ to $97¢ per lb. In addition to lead, it expects to generate 45 to 50 million lb. of lead and 925,000 to 1 million oz. of silver. Perkoa is expected to contribute 150 to 165 million lb. of zinc; Caribou is forecast to generate 60 to 65 million lb. of the base metal.

“The company ended 2020 on solid footing and is well-positioned to take full advantage of the significant opportunities provided by the positive momentum in the zinc market,” Ricus Grimbeek, Trevali’s president and CEO, said in a release. “We are excited about the year ahead. Production is forecast at 330 to 360 million lb. of zinc from our four operations that will generate meaningful cash flow at current zinc prices.”

Grimbeek added that this forecast cash flow is expected to strengthen Trevali’s balance sheet, allowing it to pay down debt, and create financial flexibility for growth opportunities such as the RP2.0 expansion project at Rosh Pinah – a feasibility study for this development is expected in the second half of 2021.

The first-quarter Caribou restart includes first production scheduled for March. Additional operational and commercial enhancements are planned for this year.

In December, Trevali closed a C$34.5-million offering with proceeds intended for the restart of Caribou, exploration and development and debt repayment.

The 2021 capital budget stands at $50 million, which includes $39 million allocated for sustaining capital, $6 million planned for exploration and $5 million in expansion capital (this excludes the RP2.0 expansion project).

Fourth-quarter and full-year financial and operating results are expected before market open on February 25.

(This article first appeared in the Canadian Mining Journal)

The US Bureau of Land Management gave final approval on Friday to Lithium Americas’ (TSX: LAC) (NYSE: LAC) Thacker Pass lithium mine, located 100 km northwest of Winnemucca, in Humboldt County, Nevada.

The project is host to the largest known lithium resource in the US. It is designed as a two-phase open-pit project, with production capacity that could reach 60,000 tonnes of battery-grade lithium carbonate (Li2CO3) per annum over a 46 year-mine life.

The company now plans to seek financing for the project, which could be producing lithium by October 2022.

“The issuance of the ROD is the culmination of over 10 years of hard work from the Thacker Pass team, as well as the BLM and other federal, state and local agencies, all of whom worked tirelessly to ensure their respective commitments to environmental stewardship and community engagement,” Jon Evans, Lithium Americas CEO said in a media release.

Applications for key state permits and water rights transfers have been submitted, with results expected later this year, the company said.

Lithium Americas previously said it plans to spend $400 million on the first phase of the Thacker Pass project, with initial output of 20,000 tonnes of lithium annually. The mine is expected to open by 2023.

The approval comes in the waning days of US President Donald Trump’s administration, during which a raft of mining projects have been approved.

Midday Monday, Lithium America’s stock was up 18% on the TSE. The company has a C$3.2 billion market capitalization.

Iron ore prices continued to climb on Monday as data revealed record-breaking steel production numbers in China, which forges more steel than the rest of the world combined.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were changing hands for $174.07 per tonne, setting a new near-decade high.

Year-to-date, the steelmaking raw material has enjoyed 8.5% gains after an 80% rise last year. The benchmark hit an all-time high of $191.70 in February 2011.

The high-grade Brazilian index (65% Fe fines) also advanced to a near record high of $195.30 a tonne, after rising about 78% over the past year.

Iron ore’s stellar run was largely due to the rising industrial demand from China. Last year, the country produced a record 1.05 billion tonnes of steel, a breakthrough as it is the first time the 1 billion mark has been exceeded.

Customs data last week showed that China imported 1.17 billion tonnes of iron ore, beating its previous record of 1.075 billion tonnes in 2017 despite a decline in December shipments.

However, iron ore may lose steam in 2021 on recovering supply from top exporters Australia, Brazil and South Africa, as early signs that Chinese steel output is likely to stabilize this year, according to industry analyst Clyde Russell.

China’s steel demand is likely to rise moderately this year, and probably not by more than the supply of iron ore can keep up with, Russell said.

Global industrial internet-of-things (IIoT) and cloud technology company sensemetrics has launched the Thread X3, a next-generation broadband IIoT sensor connectivity device. Thread X3 makes it simple and cost-effective for organizations to deploy secure, cloud-managed IIoT networks in distributed environments to accelerate digital transformation.

Thread X3 extends sensemetrics’ lead in the broadband IIoT space, combining intelligent connectivity with an easy-to-deploy, plug-and-play design.. The device gives engineers and safety managers a simple and secure connectivity solution for automating sensors from any manufacturer — and access to the data in a comprehensive situational awareness dashboard — available anywhere.

“The Thread X3 is the most robust broadband IIoT connectivity device available today, with all the advanced capabilities needed for complex sensor connectivity, control, and analytics – in a simple, cost-effective design,” Cory Baldwin, CEO of sensemetrics, said in a release. “As our next-generation connectivity offering, it drives faster and more cost-effective installations and smarter and more secure outcomes for our customers.”

The Thread X3 offers fully autonomous sensor connectivity with multiple modes of communication including ethernet, cellular, and low-power wide-area (LPWA) wireless networking — with intelligent communication uplink prioritization and automatic failover.

As a wireless gateway, it enables efficient connectionless wireless communication and management of smart sensors. In addition, sensemetrics’ industry-defining interface provides a scalable and secure means of connecting remote sites and field activities with enterprise data management systems and processes.  

For intelligent wireless networking, the Thread X3 offers automatic network role detection for gateways, repeater and endpoints, and also enables self-forming long-range wireless mesh networking. It also operates on 600-plus cellular networks across 190 countries, with no provisioning or carrier management required.

Thread X3 allows for dense sensor installations and lets customers cost-effectively manage nested sensors. Multiplexer (MUX) devices can be attached to support up to 128 sensors per device. And, using the patented sensemetrics Sensor Integration Builder (SIB), it is easy to build customized or proprietary drivers that can be securely deployed to connect and control any sensor that may need to be automated.

Alternatively, users can select from thousands of published sensor drivers available in the sensemetrics cloud-hosted library. Mobile and browser app-driven workflows support plug-and-play connectivity, control, and automation for the industry’s widest range of sensors, from simple to complex.

(This article first appeared in the Canadian Mining Journal)

Gold prices edged higher on Monday, recovering from a near seven-week low, as prospects of a massive US coronavirus relief aid outweighed a stronger dollar and lifted bullion’s appeal as an inflation hedge.

Spot gold advanced 0.6% to $1,838.30 per ounce by 11:30 a.m. EST, rebounding from an intraday low of $1,810.90 earlier. US gold futures were also 0.4% higher at $1,837.40 per ounce.

Meanwhile, European equities and US futures remain under pressure. Global shares slipped over the past week on optimism surrounding a historic $1.9 trillion US aid package.

“Market sentiment is tilted toward the cautious side after US equities pulled back from their recent highs, despite robust corporate earnings,” Margaret Yang, a strategist at DailyFX, told Bloomberg.

Bullion has fallen more than 3% this year as US Treasury yields and the dollar climbed on hopes that covid-19 vaccines and more fiscal stimulus will aid an economic recovery.

Inflation expectations have increased steadily since March, though too slowly to compensate for the recent spike in bond rates, diminishing gold’s appeal in what has typically been a strong month for the metal over the past decade.

“We expect nominal yields to play some catch-up to the move breakevens have already had, lifting real yields and presenting a headwind for gold prices through 2021,” said Marcus Garvey, head of metals and bulks commodity strategy at Macquarie Group Ltd.

“The gold market remains relatively supported at these levels, as the current run of the US dollar has more to do with safe haven, rather than a discernible pivot to a stronger dollar,” Stephen Innes, chief global market strategist at Axi, told Reuters.

The US dollar continued its climb over the past two weeks, hitting a four-week peak against rival currencies on Monday, thus making gold expensive for holders of other currencies.

“The US stimulus (plan) is quite large, we’re going to get around $1.9 trillion or $1.5 trillion, and either scenario is good for gold,” Innes added.

(With files from Bloomberg and Reuters)

Russia’s Norilsk Nickel, the world’s largest producer of palladium and nickel, has launched a blockchain-based range of exchange traded products to track prices of gold, silver, platinum and palladium.

The move marks the first time a miner introduces tracker products. The Exchange Traded Commodities (ETCs), which started trading on Deutsche Börse on Monday, are debt securities backed by physical metal.

They will be run by Norilsk Nickel’s Global Palladium Fund (GPF), which was created in 2016 to advance the development of metals in technologies used by the aerospace, electronics and car sectors.

The company, owned by an oligarch with ties to the Kremlin, said it planned to expand its new ETCs to the London Stock Exchange within a few days.

The platform uses blockchain technology for security and proof of ownership. They will also trace the way the metals were produced and include the producer’s credentials of environmental standards.

“Our way of digitalization of commodities allows one to capture and trace the source of underlying metals and the way they were produced, coupled with ESG credentials,” Alexander Stoyanov, GPF chief executive, said in a media statement.

ESG considered

Anton Berlin, vice-president, sales and distribution at Norilsk Nickel noted that environmental, social and governance standards would also be included in the ETCs.

“Metals will be sourced on a ‘best efforts’ basis from producers and suppliers that support the UN Sustainable Development Goals and other global responsible mining initiatives,” Berlin said.

Norilsk Nickel has said it plans to launch similar ETCs for nickel and copper in the future.

A British consortium that includes Cornish Lithium, a junior eager to lead the development of a lithium industry in the UK, said on Monday it had locally produced its first lithium carbonate, an essential ingredient for the batteries that power electric vehicles (EVs) and high-tech devices.

The government-funded Li4UK project, of which the main goal is to secure a domestic supply chain of the battery element in the UK, said the product came from Cornish Lithium’s project in Cornwall and from another site, in Scotland.

It followed 18 months of work involving scoping for suitable lithium mineralisation in hard rock and geothermal waters, field sample collection and analysis, as well as processing  production of two separate lithium carbonate concentrates at the WAI Mineral Processing Laboratory.

The UK government has been working on attracting investment into battery factories to protect the future of local car plants.

Figures released in early January by the Society of Motor Manufacturers and Traders, the local industry body, showed new car sales in the UK fell by almost 30% to 1.63 million in 2020, the toughest year for the market since 1992.

UK carmakers have three years to source local electric car batteries, following the Brexit free trade deal inked last year. Under the agreement, all European trade in cars and parts will continue to be free of tariffs or quotas after the Brexit transition period ended on December 31, as long as they contain enough content from either UK or EU factories.

Batteries will at first be allowed to have up to 70% of materials from countries outside the EU or the UK. From 2024 onwards, that requirement will tighten to 50%.

In September 2019, the UK government launched the Faraday Battery Challenge as part of the Industrial Strategy Challenge Fund (ISCF), to spur research and innovation.

Li4UK (Securing a Domestic Lithium Supply Chain for the UK) was one of the projects to secure financial backing from the pioneering program, soon to open a fifth round.

Breaking foreign dependency

Most of the world’s lithium is currently produced in huge brine evaporation ponds in South America or open pit mines in Australia. The metal is then shipped to China for processing into lithium chemicals for the manufacture of lithium-ion batteries.

Europe is not too far from commercially producing battery-quality lithium, industry actors believe.

“The development of lithium processing technologies at the WAI labs as part of the Li4UK project has been a huge stepping-stone,” Ben Simpson, technical director for mineral processing at WAI, said in the statement. “What has been achieved here puts the UK at the forefront of developments in the European battery industry.”

“Given the potential that has been established by this project to exploit lithium resources in Cornwall, it is possible that the UK could produce a significant percentage of its lithium demand domestically,” Cornish Lithium CEO Jeremy Wrathall noted.

The miner received a permit earlier this month to explore for the battery metal in geothermal waters off the coast of Cornwall.

Cornish Lithium is targeting four sites where it plans to potentially extract lithium using a low-impact and environmentally responsible process. Mining lithium from geothermal water allows using the same hot rock water to power up turbines, generating zero-carbon electricity and heat.

The £4 million ($5.4m) project will trial direct lithium extraction (DLE) technology, which removes dissolved lithium compounds from water without the need for brine ponds.

Cornwall also provides access to renewable energy from solar and wind, and established infrastructure such as rail, road and port facilities – which represent a considerable advantage over other European lithium projects.

The Li4UK consortium is made up of Wardell Armstrong International, The Natural History Museum and Cornish Lithium.

Researchers at Kyoto University in Japan have measured what happens at the micro-level when pressure is applied on tiny samples of metals containing niobium silicide, which are promising materials that can withstand high temperatures and improve efficiency of gas turbines in power plants and aircraft.

In a paper published in the journal Science and Technology of Advanced Materials, the scientists report their results demonstrate the cutting edge of research into plastic deformation behaviour in crystalline materials.

Plastic deformation describes the distortion that occurs at the atomic level when a sustained force is applied to a crystal. By using a new approach to systematically measure plastic deformation in crystals, the team led by Kyosuke Kishida has discovered that the process shows promise for use in high-temperature gas turbines.

In detail, the team measured plastic deformation in a niobium silicide called alpha-Nb5Si3. Tiny ‘micropillars’ of these crystals were exposed to very small amounts of stress using a machine with a flat-punch indenter at its end.

The stress was applied to different faces of the sample to determine where and how plastic deformation occurs within the crystal. By using scanning electron microscopy on the samples before and after the test, they were able to detect the planes and directions in which deformation occurred.

This was followed by simulation studies based on theoretical calculations to further understand what was happening at the atomic level. Finally, the team compared the results with those of a boron-containing molybdenum silicide (Mo5SiB2) they had previously examined.

“We found that instantaneous failure occurs rather easily in alpha-Nb5Si3, which is in marked contrast to Mo5SiB2,” Kishida said in a media statement.

This could mean alpha-Nb5Si3 is at a disadvantage compared to Mo5SiB2 for use as a strengthening component in metal-based alloys. Kishida and his team think, however, that this material’s inherent brittleness could be improved by adding other alloying elements.

Explorer and developer Bluejay Mining (LON: JAY) announced that all conditions have now been satisfied for the start of the Enonkoski project joint-venture and earn-in agreement with Rio Tinto (ASX, LON, NYSE: RIO).

The deal could see the world’s second-largest miner progressively earn up to a 75% interest in the Finnish nickel-copper-cobalt-PGE project by injecting $20 million into it, either by covering expenses or paying cash equivalent amounts, over three stages.

According to Bluejay, fieldwork at Enonkoski – which is part of the agreement – has now started with re-logging and reassaying historical diamond drill core at the Geological Survey of Finland’s core archive; completing Tromino data acquisition via two surveys; and starting detailed ground magnetic surveys of Tevanjoki and Laukunsuo, two near-mine areas.

“I am pleased to see that we have together been able to quickly move forward with the near-mine geophysical surveys and other data acquisitions all aiming to further refine targets to be tested by drilling in 2021,” Thomas Levin, COO of Bluejay’s subsidiary FinnAust Mining Finland Oy, said in a media statement.

According to Levin, the Enonkoski belt has remained significantly underexplored although it hosts two historical nickel, copper, cobalt mines that were in operation in the 1980s and early 1990s. 

“We have acquired most of the historical data from the belt and new ground and airborne geophysical surveys have been conducted,” the executive said. “Diamond drilling conducted by FinnAust less than 1.5 kilometres southeast of the closed Enonkoski mine intersected a nickel, copper mineralisation at shallow depth proving that also the near-mine areas are underexplored.”

The Enonoski mine produced 6.7 million tonnes at an average grade of 0.8% nickel between 1984 and 1994 and it sits within its namesake belt, which also hosts the Enonkoski project.

Roxgold has released assay results for reverse circulation and diamond tail drilling completed at the Koula deposit within its Seguela development project in Côte d’Ivoire.

The drill highlights include 14 metres of 42.9 g/t gold starting at 61 metres; 11 metres of 46.2 g/t gold from 48 metres; and 18 metres of 22.1 g/t from 175 metres.

A four-rig infill program is underway at the Koula deposit, which is aimed at infilling this deposit on 25-metre centres to establish a future indicated resource. Additional extension drilling is also ongoing. Current inferred resources at Koula stand at 1.1 million tonnes grading 8.1 g/t gold for a total of 281,000 gold oz.

“Today’s results continue to demonstrate Koula’s ability to add significant value to the Séguéla gold project, through its ongoing expansion and the high grade tenor of mineralization,” John Dorward, Roxgold’s president and CEO, said in a release.

A feasibility study for Seguela is expected in the second quarter of 2021, with a construction decision anticipated shortly thereafter for a potential first gold pour in 2022.

In April 2020, the company published the results of a preliminary economic assessment on Seguela. The study outlined an open pit operation producing an average of 103,000 oz of gold a year over an eight-year life at all-in sustaining costs of $749 per oz. With an initial capital outlay of $142 million, the project has an after-tax net present value estimate, at a 5% discount rate, of $268 million and a 66% internal rate of return, based on a gold price assumption of $1,450 per oz.

In December, the company received the mining permit from the government of Côte d’Ivoire to develop and operate Seguela.

Last year, Roxgold generated 133,940 gold oz. at its Yaramoko mine complex in Burkina Faso. This year, the mine is expected to produce 120,000 to 130,000 gold oz.

(This article first appeared in the Canadian Mining Journal)

Following last month’s announcement of the sale of Premier Gold Mines to Equinox Gold, Premier has released an updated preliminary economic assessment for its McCoy-Cove property in Nevada. The past-producing asset will be part of i-80 Gold, a US-focused spin-out with shares of this new company distributed to Premier’s existing shareholders.

The latest PEA suggests an 8-year, 1,070 t/d underground mine at McCoy-Cove, producing an average of 102,000 gold oz annually at all-in sustaining costs of $948 per oz. With mine construction capital costs pegged at $81.9 million and assuming a $1,400 per oz. gold price, the after-tax net present value estimate for the project comes in at $178 million, at a 5% discount rate, with a 36% internal rate of return.

“The PEA underscores the importance of McCoy-Cove as one of the cornerstone assets in our soon-to-be spun-out i–80 Gold Corp, whose focus will remain the exploration and development of quality gold projects in Nevada, USA,” Ewan Downie, president and CEO of Premier Gold Mines, said in a release. “Our go-forward plans for the project includes an exploration ramp to allow an aggressive underground drill program to upgrade and expand mineral resources in advance of a future feasibility study and also provide a platform to increase recoverable gold resources and delineate the deposit still open down-plunge.”

The proposed mining scenario includes single-ramp access from surface with contractor mining using drift and fill mining methods. Processing would be under a toll-milling arrangement: there are three roasting facilities and two pressure oxidation facilities in northern Nevada which could potentially process the Cove mineralization.

The latest study assumes the mining of two of the four deposits at the site – Helen and Gap – both of these remain open.

McCoy-Cove is permitted under an environmental assessment (EA), which allows Premier to develop an exploration ramp, complete underground drilling and test mine up to 108,860 tonnes. The latest study assumes a new EA will be required to mine the Helen zone with an additional environmental impact statement (EIS) required for further dewatering. Baseline data collection, permitting and bonding for the EIS are expected to be completed in the second quarter of 2024.

In 2021 and 2022, Premier expects to focus on evaluating processing methods, optimizing the mine plan and completing baseline studies for the EIS, in addition to exploration decline development. A feasibility study work is expected in 2023 and 2024.

McCoy-Cove is just south of Nevada Gold Mines’ Phoenix mine and includes the Cove mine, which produced 2.6 million oz. of gold and 100 million oz. of silver between 1987 and 2001, as well as the McCoy mine which generated over 600,000 gold oz.

Indicated resources at the site stand at 1 million tonnes at 10.9 g/t gold and 29.1 g/t silver, for a total of 351,000 gold oz. and 943,000 oz. of silver. Additional inferred resources total 3.9 million tonnes grading 10.9 g/t gold and 20.6 g/t silver, for a further 1.4 million gold oz. and 2.6 million silver oz.

(This article first appeared in the Canadian Mining Journal)

Barrick Gold’s (TSX: ABX), (NYSE: GOLD) president and chief executive officer Mark Bristow will add South Africa’s Rockwell Diamonds (OTCMKTS: RDIAF) to his personal portfolio if the beleaguered miner agrees to delist and be taken private.

The deal would see Rockwell merging with Bristow’s wholly-owned 1274787 BC, a Canada, British Columbia-based diamond company better known as Britsco.

Shares in the South African miner, except those held by Bristow and any dissenting shareholders, would then be exchanged for redeemable preferred shares in the amalgamated corporation at C$5 cents per share in cash.

Bristow, the founder and owner of Randgold Resources, a gold miner that Barrick acquired in 2018, acted as Rockwell’s top boss for six months to May 2011. In October that year he joined the board and currently holds about 2.4% of the JSE-listed diamond company.

While Rockwell still holds alluvial diamond mines in South Africa, it has de-consolidated its investments and mineral property interests in the country in recent years.

The move followed a “loss of control and value stemming from being in liquidation since November 2016 and awaiting final liquidation proceedings” expected this year, Rockwell said in the statement.

Sabotage

Rockwell issues surfaced when the company found ‘”significant irregularities in the conduct of a major contractor and one senior employee,” who were terminated in 2016.

The situation, the miner says, included equipment sabotage and the contractor filing for a liquidation order against the company’s three main operating subsidiaries.

The company noted that its board hired auditing firm KPMG to obtain a formal valuation. The firm deemed the offer fair from a financial point of view to Rockwell’s shareholders other than Bristow.

Rockwel’s board will vote on the deal at the upcoming meeting, to be held the first week of March.

If approved, Bristow will own and control 100% of the issued and outstanding common shares of the combined entity.

Rockwell announced on Friday it planned to gradually wind down, adding that it had already applied to delist from the JSE and to cease to be a reporting issuer in Canada.

The company also said the Ontario Securities Commission had granted full revocation of a failure-to-file case trade order in December, previously ordered against the company in July 2018.

Market analyst Roskill published a report stating that China’s increasing control over copper and cobalt resources in the Democratic Republic of the Congo could pose a threat to western market participants.

The threats are related to the security of supply, as increasingly close ties between the two countries could pose problems to those in the West looking to build up self-contained localized battery supply chains.

Back in early January, China announced that it would cancel an estimated $28 million of loans to the DRC, repayment of which were due by the end of 2020, and would provide $17 million in other financial support to help the country overcome the sanitary crisis caused by the covid-19 pandemic. 

During a tour of China’s Foreign Minister, Wang Yi, the two countries also signed a MoU on the Belt and Road Initiative cooperation, with the DRC now becoming China’s 45th Belt and Road Initiative partner in Africa.

The initiative, also known as the “New Silk Road,” consists of a network of railways, pipelines, highways and ports that would extend west through the former Soviet republics and south to Pakistan, India and Southeast Asia.

“China’s decision to write off debts from the DRC and welcome the country as a new partner for the Belt and Road Initiative is likely to further drive cooperation between the two countries and incentivize more Chinese miners, like China Molybdenum, to make new investments into the Congolese copper and cobalt industry, increasing their ownership in local mines,” Roskill’s report reads.

What’s the West to do?

The DRC hosts over 51% of the global cobalt reserves, according to 2019 data released by the US Geological Survey. 

Roskill estimates that, in 2020, the central African country produced about 90kt Co in various intermediates representing nearly 70% of the total cobalt feedstock production globally. 

Prior to the recent announcement, over 40% of the cobalt mining capacity in the DRC was already controlled by Chinese companies as a result of decades-long investment and development in the country, with several resource-for-infrastructure deals having been signed and implemented since the 1990s.

“On the cobalt refining side, particularly for the production of chemicals suitable for battery applications, China plays an even more dominant role, with its production of cobalt sulphate and oxides accounting for around 80% of the global total output in 2020,” the report reads.

What are western countries to do to mitigate such supply risk in the years ahead? 

Locking in feedstock with long-term agreements is a first good step, Roskill says. They should also utilize alternative feeds, such as recycling, and develop resources elsewhere.

Delaware District Judge Leonard Stark -almost- made Canadian miner Crystallex’s wishes come through.

Stark complied with a request the company made back in September 2020 and approved the sale of PDV Holdings shares just before mid-January 2021. PDV Holdings is the parent company of refiner Citgo Petroleum Corp., which is owned by Venezuela.

With this action, Crystallex wants to enforce a $1.4-billion arbitral award against the South American country, following a decade-long dispute over Venezuela’s 2008 nationalization of its gold mine in the southeastern Bolívar state. The amount is comprised of $1.2 billion, plus $200 million of interest awarded by a World Bank arbitration tribunal in 2016.

In his decision, Stark said he will appoint a special master to oversee the sale, including minimum advertising requirements, requiring substantial good faith deposits of bidders, and only selling as many shares as needed to satisfy judgments. 

The judge also rejected a proposal that only Venezuelan national oil company PDV could administer the sale, finding that any unique knowledge pertinent to the sale should be obtained and used regardless of PDV’s administration.

“Having made Crystallex undertake a decade’s worth of extensive and expensive efforts to collect on its judgment, the court is not going to permit a highly-recalcitrant judgment debtor to conduct its own sales process over the objection of its repeatedly-victorious judgment creditor,” Stark wrote in his decision.

There’s still a but

Despite ruling in favour of Crystallex, Stark acknowledged that US sanctions against the Nicolás Maduro regime currently block the execution of the sale and that a final decision lies in the hands of the executive branch through the US Treasury department.

“All parties agree that, under current law and policy, a sale of PDVH shares cannot be completed without a specific [US Treasury] license,” the judge wrote. “But all the preparatory steps that can be taken without such a license can, and should, be taken.”

Stark said that he did consider the sanctions and what they represent when it comes to Venezuelan politics. In particular, he said he assessed a letter that was submitted by Elliott Abrams, the US special representative to Venezuela, to the Attorney General and the Justice Department. In the missive, Abrams stated that Crystallex cannot sell the shares without a license from the US Office of Foreign Asset Control and that approving the share sale would harm US foreign policy and national-security interests in Venezuela and damage the diplomatic support granted by the White House to the Venezuelan interim government led by opposition leader Juan Guaidó. 

For economist and founder of the think-tank Oil for Venezuela, Francisco Rodríguez, the issue with the sanctions is just likely to delay the process a bit more.

“With this decision, chances of reversing the sentence that favours Crystallex are almost null. However, the US government can still refuse to issue the necessary license to move forward with the sale. This would halt the sale, although just temporarily,” Rodríguez said over Twitter.

Scientists at Michigan State University found that Geobacter – bacteria found in soil and sediment – are effective cobalt miners, as they are able to extract the metal from rust without letting it penetrate their cells and kill them. 

In a study published in the journal Frontiers in Microbiology, the researchers explain that Geobacter not only survive being exposed to cobalt, they essentially coat themselves with the metal.

“They form cobalt nanoparticles on their surface. They metallize themselves and it’s like a shield that protects them,” Gemma Reguera, lead author of the study, said. “It’s like Iron Man when he puts on the suit.”

Cobalt, in general, kills microbes by penetrating their cells and wreaking havoc.

But knowing from previous studies that Geobacter are extremely resistant because, for example, they can block uranium contaminants from getting into groundwater, they suspected the bacteria’s ability to respire rust could also help them to survive cobalt exposure. 

This discovery is considered to be a proof-of-concept that opens the door to a number of possibilities, such as using Geobacter as the basis of new biotechnology built to reclaim and recycle cobalt from lithium-ion batteries.

The tiny organisms could also be used to soak up other toxic metals such as cadmium, which were previously believed to be death sentences for the bacteria.

Nornickel, the world’s largest producer of palladium and high-grade nickel and major producer of platinum and copper, announced that it is joining the Responsible Sourcing Blockchain Network (RSBN).

RSBN is an industry collaboration among members across the minerals supply chain using blockchain technology to support responsible sourcing and production practices from mine to market.

The move comes after Nornickel announced a strategy to use sophisticated digital technologies to create a customer-centric supply chain, which would include metal-backed tokens on the global Atomyze platform, a tokenization platform that represents physical assets in digital form.

Both the Atomyze and RSBN platforms were developed by leveraging Hyperledger technology, with IBM’s participation.

With Nornickel joining the RSBN, a series of its supply chains will be audited annually against key responsible sourcing requirements by RCS Global. The audits cover each stage of the company’s vertically integrated operations from Russian mines to refineries in Finland and Russia.

Once audited against responsible sourcing requirements, each supply chain will be brought on to the RSBN and an immutable audit data trail will be captured on the platform, proving responsible nickel and cobalt production, its maintenance and its ethical provenance, Nornickel said.

Built on IBM Blockchain technology and powered by the Linux Foundation’s Hyperledger Fabric, the RSBN platform helps improve transparency in the mineral supply chain by providing a secure and immutable record that can be shared with specified members of the network.

RSBN is designed to be adopted across industries by original equipment manufacturers (OEMs) in automotive, electronics, aerospace and defense, as well as their supply chain partners in mining and battery manufacturing.

On May 14, 2020, the New Prosperity project, said to be one of the largest undeveloped copper deposits in Canada, was pronounced dead by the First Nation that helped kill it: the Tsilhqot’in.

“The New Prosperity Mine is now dead – it cannot be legally built,” the Tsilhqot’in National Government said in a press release.

That pronouncement came after the Supreme Court of Canada rejected an appeal by Taseko Mines Ltd. (TSX: TKO, NYSE: TGB) of a federal appeal court decision that rejected Taseko’s argument that the federal Environmental Assessment Agency’s denial of an environmental certificate was based on flawed engineering and environmental studies.

By refusing to hear Taseko’s appeal, the Supreme Court’s decision meant  “the end of the road” for the project, as Tsilhqot’in Chief Joe Alphonse put it.

So why is the Tsilhqot’in supporting the company’s application for an extension to a provincial environmental certificate?

Neither the Tsilhqot’in or Taseko are saying much, apart from previously made public statements on a “dialogue” brokered by the provincial government.

The project received a provincial environmental certificate, but the federal environmental agency twice refused to issue one. The fact Taseko had a provincial environmental certificate gave it some legal avenues to pursue.

Prior to the May 14, 2020 Supreme Court decision, the British Columbia government announced that it brokered a truce between Taseko and Tsilhqot’in. Both sides agreed to suspend all legal and regulatory challenges as the provincial government tried to act as mediator.

Under the provincial environmental certificate, Taseko was obliged to begin some exploratory work by a certain date – something the courts agreed was not only legal but required.

But as the certificate came close to expiring, Taseko applied for an extension. It was given an extension until January 14, 2021, and talks between Taseko and the Tsilhqot’in were underway, until the covid-19 pandemic delayed the dialogue.

So the company has applied for another extension – something the Tsilhqot’in is supporting, according to recent filings with the BC Environmental Assessment Office.

“The covid-19 pandemic delayed the commencement of the parties’ dialogue for several months, but the Tŝilhqot’in and Taseko have made progress in establishing a constructive dialogue,” Taseko and the Tsilhqot’in say in a joint letter to the BC EAO.

“The parties recently agreed to extend the original standstill by a further 12 months so they can continue this dialogue regarding the project.”

Whether that means the Tsilhqot’in’s position towards the mine project has changed remains unclear. Neither the Tsilhqot’in nor Taseko are willing to discuss the project beyond the public statements they have made about continuing their dialogue.

(This article first appeared in Business in Vancouver)

Trevali Mining (TSX: TV) announced on Friday the planned restart of operations at its Caribou mine near Bathurst, New Brunswick.

The mine has been on a care and maintenance program since March 2020.

The company expects to return to mining in early February 2021, with first payable zinc production expected by the end of March 2021.

“Our initial two-year plan includes several enhancements which are designed to improve the mine’s economics, including the involvement of a contracted mining operator and the entry into fixed-pricing arrangements for a significant portion of the mine’s forecasted production,” said Trevali CEO Ricus Grimbeek in a media statement.

“Looking ahead, we will continue to study the potential to extend our initial mine plan, as well as explore further potential in the Bathurst mining camp.”

Caribou production guidance for 2021 is estimated at between 60 – 65 million pounds of payable zinc, 21 – 23 million pounds of payable lead and 585 – 650 thousand ounces of payable silver.

Midday Friday, Trevali’s stock was down nearly 9% on the TSE. The company has a C$184 million market capitalization.

Iron ore prices climbed back up to near-decade highs on Friday after customs data showed record-breaking imports by China, which forges more steel than the rest of the world combined.

According to Fastmarkets MB, benchmark 62% Fe fines imported into Northern China (CFR Qingdao) were changing hands for $173.69 a tonne, the highest since September 2011.

The steelmaking raw material has already enjoyed 8% gains in 2021 after an 80% rise last year. The benchmark hit an all-time high of $191.70 in February 2011.

The high-grade Brazilian index (65% Fe fines) was back near a record high at $194.90 a tonne on Friday after rising 78% over the past year.

Despite a 45% year-on-year decline in shipments in December to 96.75 million tonnes, for the full year China imported 1.17 billion tonnes of iron ore, customs data showed on Thursday. That handily beat the previous record of 1.075 billion tonnes set in 2017. 

Industry analyst Clyde Russell issued a word of caution for 2021 however, writing for Reuters that “while the market view is still optimistic for steel demand in China, it’s likely that Beijing will ease back on stimulus in 2021, making it harder to see iron ore imports enjoying another year of strong gains”:

A year of resilience would likely be a good outcome.

(Updated January 15, 10am PST)

The covid-19 pandemic has raised uncertainty by compounding existing risks and creating new ones, but by the end of last year, investors were optimistic that the worst was over.

Looking ahead, investors will likely see the low interest rate environment as an opportunity to add risk assets in the hope that economic recovery is on the immediate horizon. That said, investors will likely also be navigating potential portfolio risks including ballooning budget deficits, inflationary pressures and market corrections amid already high equity valuations.

In its 2021 outlook report, the World Gold Council (WGC) predicts that investment demand for gold will remain well supported, while gold consumption should benefit from the nascent economic recovery, especially in emerging markets.

Record year for gold

Gold was one of the best performing major assets of 2020, driven by a combination of high risk, low interest rates and positive price momentum – especially during late spring and summer.

By early August, the LBMA gold price reached a historical high of $2,067.15/oz as well as record highs in all other major currencies. While gold subsequently consolidated below its intra-year high, it remained comfortably above $1,850/oz for most of Q3 and Q4 2020, finishing the year at $1,887.60/oz.

Interestingly, gold’s price performance in the second half of the year seemed to be linked more to physical investment demand – whether in the form of gold ETFs or bar and coins – rather than through the more speculative futures market, the WGC points out.

For example, COMEX net long positioning reached an all-time high of 1,209 tonnes in Q1 but ended the year almost 30% below this level. The Council believes this was due to the dislocation that COMEX futures experienced in March relative to the spot gold price, making it more expensive to hold futures compared to other choices.

Investors’ preference for physical and physical-linked gold products last year further supports anecdotal evidence that, this time around, gold was used by many as a strategic asset rather than purely as a tactical play. 

Low interest rates and inflation

Global stocks performed particularly well during November and December, with the MSCI All World Index increasing by almost 20% over the period. However, rising covid-19 cases and a reportedly more infectious new variant of the virus created a renewed sense of caution.

Yet, neither this nor the highly volatile US political events during the first week of 2021 deterred investors from maintaining or expanding their exposure to risk assets.

The S&P 500 price-to-sales ratio is at unprecedented levels, and analysis by Crescat Capital suggests that the 15 factors that make up their S&P 500 valuation model are at – or very near – record highs.

Going forward, the Council believes that the very low level of interest rates worldwide will likely keep stock prices and valuations high. As such, investors may experience strong market swings and significant pullbacks. These could occur, for example, if vaccination programs take longer to distribute – or are less effective – than expected, given logistical complexities or the high number of mutations reported in some strains.

In addition, many investors are concerned about the potential risks resulting from expanding budget deficits, which, combined with the low interest rate environment and growing money supply, may result in inflationary pressures. This concern is underscored by the fact that central banks, including the US Federal Reserve and European Central Bank, have signalled greater tolerance for inflation to be temporarily above their traditional target bands.

Gold has historically performed well amid equity market pullbacks as well as high inflation. In years when inflation was higher than 3%, gold’s price increased 15% on average.

Notably too, research by Oxford Economics shows that gold should do well in periods of deflation. Such periods are typically characterized by low interest rates and high financial stress, all of which tend to foster demand for gold.

Further, gold has been more effective in keeping up with global money supply over the past decade than US T-bills, thus better helping investors preserve capital. 

Consumer demand

Market surveys indicate that most economists expect growth to recover in 2021 from its dismal performance during 2020. And although global economic growth is likely to remain anaemic relative to its full potential for some time, gold’s more stable price performance since mid-August may foster buying opportunities for consumers.

The economic recovery may particularly realize in countries like China, which suffered heavy losses in early 2020 before the spread of the pandemic was controlled more effectively than in many western countries.

“Given the positive link between economic growth and Chinese demand, we believe that gold consumption in the region may continue to improve,” the WGC says.

Similarly, the Indian gold market appears to be on a stronger footing. Initial data from the Dhanteras festival in November suggest that while jewelry demand was still below average, it had substantially recovered from the lows seen in Q2 of last year.

However, with the global economy operating well below potential and with gold prices at historical high levels, consumer demand may remain subdued in other regions.

Central bank demand

After positive gold demand in H1, central bank demand became more variable in the second half of 2020, oscillating between monthly net purchases and net sales, the WGC says. This was a marked change from the consistent buying seen for many years, driven in part by the decision of the Central Bank of Russia to halt its buying program in April.

Nonetheless, central banks are on course to finish 2020 as net purchasers (although well below the record levels of buying seen in both 2018 and 2019), and 2021 may not be much different.

There are good reasons why central banks continue to favour gold as part of their foreign reserves, which, combined with the low interest rate environment, continue to make gold attractive.

Mine production

Recovery in mine production is likely this year after the fall seen so far in 2020. Production interruptions peaked during the second quarter of last year and have since waned.

While there is still uncertainty about how 2021 may evolve, it seems very likely that mines will experience fewer stoppages as the world recovers from the pandemic.

According to the WGC, this would remove a headwind that companies experienced in 2020 but that is not commonly part of production drivers. Even if potential second waves impact producing countries, major companies have introduced protocols and procedures that should reduce the impact of stoppages compared to those seen in the early stages of the pandemic.

The Council expects that the need for effective hedges and the low-rate environment will keep investment demand well supported in 2021, though it may be heavily influenced by the perceptions of risk linked to the speed and robustness of the economic recovery.

Aura Minerals (TSX: ORA) is expecting continued production growth in 2021, with a targeted annual production of between 250,000 and 290,000 gold equivalent ounces (GEOs), the company announced on Friday.

This represents a 22% to 42% improvement compared to the 204,000 GEOs produced in 2020, a record high for any single year.

Cash cost from operations for the year will be within the range of $728 and $867 per equivalent ounce of gold produced, the company added.

In 2021, Aura plans to start the construction of the Almas greenfield project, to develop a pre-feasibility study for the Matupa project and to further expand production capacity at Aranzazu.

These new projects, along with sustaining and exploration activities, will take total capital expenditures to between $93 million and $104 million for the year.

Management believes its properties – San Andres, EPP, Aranzazu and Gold Road – have “strong geological potential” and intends to expand the life of mine across its business units. In 2021, Aura said it plans to invest a total of $24 million to $28 million.

In the medium term, the company anticipates more than doubling its annual production, achieving between 400,000 and 480,000 GEOs in 2024. The projection is based on the combination of potential brownfield expansion and existing greenfield projects, not including any potential acquisitions, Aura said.

Shares of Aura Minerals advanced 1.0% by 12:15 p.m. EST Friday, sending the company’s market capitalization to C$1.04 billion.

This week’s top stories:

• Judge denies Native American bid to block Rio Tinto’s copper project –Read more
• Rhodium price roars above $20,000 in precious metals’ biggest rally – Read more
• Rio Tinto to open North America’s first scandium plant in June – Read more
• Iron ore price turns higher again after record China imports – Read more
• Appian CEO on principles for mining investment – Read more

Management appointments announced this week include:

Terrylene Penstock has been named CFO of AsiaBaseMetals. Penstock is a director of the company.

David Wiens is now the CFO and corporate secretary of Bunker Hill Mining, taking over from Wayne Parsons.

Hein Raat has been named country manager of Sweden for District Metals.

Jack Henris has been appointed executive VP and COO of Hycroft Mining; James Berry has joined as VP of exploration and geology.

Alan Sexton has been named VP of exploration for LaSalle Exploration; Laurent Eustache has been appointed to the board.

Marco Guidi has resigned from the CFO role with Ophir Gold. Jessica Whitton has been named corporate secretary.

Daniel Pace is now VP of exploration for Orogen Royalties; Pace takes over from Dave Groves.

Hubert Vallee has been named VP of project development for Vanadium One Iron.

Catalin Kilofliski is now the director of corporate development with Western Alaska Copper & Gold.

Board moves include:

Frederick Kempson is now a director of Brookmount Explorations.

Ed Dowling is now the chair of the board for Copper Mountain Mining; Dowling succeeds interim chair Bruce Aunger. Aunger will remain a director of the company.

Steve Reid has been appointed board chair for Eldorado Gold, replacing George Albino, who will remain a director. 

Mark Gibson has joined the board of Fjordland Exploration.

Fahad Al-Tamimi has been named chair of the board for Mason Graphite; Peter Damouni and Simon Marcotte have also joined the board.

Michael Spreadborough has been named a director of Novo Resources.

Jordan Potts has joined the board of Rockwealth Resources.

Jay Sujir has resigned from the board of Roughrider Exploration; Dan Berkshire has joined the board.

Jeff Kennedy is now a director of Stroud Resources.

Michael Waldkirch has been appointed to the board of U.S. Gold.

Bhakti Pavani has been named to the board of Whitehorse Gold.

Awards:

Michal Mankosa, VP of global technology with Eriez, has been selected as the recipient of the 2021 Robert H. Richards award. This recognition is presented by the Society for Mining, Metallurgy and Exploration (SME) and honors an individual’s achievements in furthering mineral beneficiation.

(This article first appeared in the Canadian Mining Journal)

Mandalay Resources (TSX: MND) announced this week that despite all the challenges that came with 2020, it was able to meet its full-year production guidance with a consolidated 103,444 ounces of gold equivalent produced and it also achieved 35% year-over-year production growth.

In a press release, Mandalay said that last year was so positive for the company that it even registered the highest quarterly saleable gold production since Q4-2017, with 24,488 saleable gold ounces produced in the last quarter of 2020. 

“Costerfield was a high performing anchor asset that drove the company’s operational and financial turnaround, producing and selling record amounts of both gold and antimony for the year,” Dominic Duffy, Mandalay Resources president and CEO, said in the media brief.

“The high-grade Youle vein continued to deliver excellent results in the fourth quarter of 2020, as head grades averaged 11.22 g/t gold and 3.5% antimony processed. Overall, Costerfield produced 15,099 saleable gold equivalent ounces during the fourth quarter of 2020 and 58,148 ounces of gold equivalent for full-year 2020.”

The gold-antimony Costerfield operation is located in the state of Victoria, in southeastern Australia. According to Duffy, compared on an annual basis, the mine’s 2020 production rate increased by over 2 times thanks to the high-grade ore of the Youle vein. Thus, for 2021, production is expected to be between 53,000 and 60,000 ounces of saleable gold equivalent.

Duffy also praised the performance of Mandalay’s Björkdal operation in Skellefteå, northern Sweden, whose output for the full-year 2020 was 45,296 ounces of saleable gold.

“[The year] 2020 was a transitional year for Björkdal operationally, one in which is setting the foundation for an expected improved production profile in 2021 as we continue to institute the steady ramp-up in supplying the mill with higher-margin underground ore, more scheduled stoping and advancing development into Aurora’s higher-grade lower levels,” Duffy said.

“For 2021, we are forecasting a significant production increase at Björkdal, with expected production of 52,000 – 57,000 gold ounces.”

Based on these results, Mandalay predicts that its two core assets will produce between 105,000 and 117,000 ounces of gold equivalent in 2021 at $800 – $1,000 and $1,100 – $1,350 per ounce cash costs and all-in sustaining cost, respectively.

Besides ramping up production, the Canadian miner also wants to focus on exploration in the year ahead, with increased spending and drilled meters at both sites over the course of 2021. 

“We expect this to unlock further value and extend the mine life of our assets,” Duffy said.

Troubadour Resources (TSXV: TR) announced that it has been granted a five-year, area-based exploration permit for its Texas property located in British Columbia, western Canada.

In a press release, Troubadour said the permit allows the company to build access trails, complete trenching and establish 50 drill pads on the project.

The company also said that, once it receives results from the field campaign completed in the fall of 2020, it will start running a phase-2 drill campaign to be completed in the first half of 2021.

The Texas property covers historical mineral showings and is located 3 kilometres southwest of the town of Beaverdell in the Greenwood Mining Division of southern BC. It is also close to the past-producing Beaverdell mine, which was in operation from 1896 to 1991.

According to Troubadour, the property covers ground prospective for vein-hosted precious metal deposits, based on at least seven historical and newly discovered gold occurrences and geological comparisons with the nearby Beaverdell mine.

The next three to six months will be crucial to the future of the vast Oyu Tolgoi copper-gold mine in Mongolia, as the companies behind the operation engage in talks to find a way to improve the government’s financial benefits from an ongoing underground expansion.

Based on a definitive estimate for the development of the new mine level, announced by Rio Tinto (ASX, LON, NYSE: RIO) last month, the underground section of Oyu Tolgoi will begin production in October 2022. The project will cost $6.75 billion, about $1.4 billion higher than its original estimate, as established in the 2015 agreement.

That deal is commonly known in Mongolia as the “Dubai agreement”, because the nation’s then Prime Minister Chimediin Saikhanbileg struck it with former Rio Tinto’s boss Jean-Sebastien Jacques in a Dubai hotel, ending an impasse that had lasted close to three years.

Ulaanbaatar is not happy with the updated figures. Earlier this week, the capital announced that it would ask Rio Tinto and its majority-owned Turquoise Hill (TSX, NYSE: TRQ) to revisit the economic benefits that the expansion will bring to the state’s coffers.

“The government of Mongolia supports the Oyu Tolgoi underground mine development, which is viewed as holding benefits to the Mongolian economy because 80% of Oyu Tolgoi’s value lies beneath the surface,” Solongoo Bayarsaikhan, Mongolia’s Deputy Chief at Cabinet Secretariat said on Thursday.

“It is calculated that Mongolia will not receive dividend payments until 2051 and will incur debts of $22 billion. In addition, Oyu Tolgoi is estimated to pay profit taxes or corporate income taxes only in four years until 2051,” she noted.

In Bayarsaikhan’s view, the government of Mongolia may never receive a dividend from Oyu Tolgoi, in which the country has a 34% interest because the billions of dollars in loans taken on to develop the existing open-pit mine and the underground expansion have to be repaid before the state receives a dividend. 

Both Rio Tinto and Turquoise Hill have said they are ready to engage with local authorities, with analysts warning the looming renegotiations could cause further delays to the already deferred project.

“Any delays in obtaining approvals beyond the first half of 2021 may result in further value erosion of the project, which we expect to ramp up in October 2022,” Morgan Stanley analyst Alain Gabriel wrote this week. “A potential renegotiation of the mining agreement could result in some value leakage as the government seeks to accelerate its access to cash flows.”

BMO Jackie Przybylowski said the government’s claims highlight its legitimate concerns over the distribution of cash flows from the mine.

“Although we don’t model any change to the structure of the investment agreement, we do believe that a change is possible, which would improve the structure for all sides,” she wrote, adding that BMO did not anticipate a disruption to production or ownership. 

Preferred outcome

The best scenario for everyone involved in the mine development, which will make Oyu Tolgoi the world’s fourth-largest copper operation once completed, is uncertain.

The Mongolian Parliamentary Working Group, formed in 2019, recommended exploring possibilities for a production sharing agreement and/or replacement of the equity interest with a special royalty.

Rio and Turquoise Hill are focused on bringing the underground expansion into production. But the road ahead could be rough as there are many issues to hash out.

The two companies are at odds over roles and obligations in securing the remaining funding. An arbitration tribunal is expected to settle the matter in the coming months.

The miners also need to extend an existing power agreement beyond March. The operation is powered by coal-fired electricity imported from neighbouring China via overhead cables.

Then there is a potential restructuring of Oyu Tolgoi’s management team, as well as the need to ratify a 2019 statement of resources and reserves and a feasibility study prepared in 2020.

All these topics need to be addressed before Rio Tinto makes a major mining decision — an undercut — in May.

The technique is part of an extraction method known as block caving. It involves creating an artificial cavern below the ore body, allowing it to progressively collapse under its own weight.

Suspension out of question

All the parties involved seem sure that the project won’t be halted, though they acknowledge that further delays are possible. Oyu Tolgoi is a crucial part of Mongolia’s economy. Not only it is the country’s biggest source of foreign direct investment, it also provides thousands of well-paid jobs. Close to 94% of the workforce are Mongolian nationals.

The current negotiation environment is more favourable than in 2013, when Rio considered halting construction of the open pit mine due to Mongolian authorities demanding a greater share of profit from the mine.

The special committee looking into the cost overrun and delays is comprised of four members: two members nominated by Turquoise Hill and two members nominated by Erdenes Oyu Tolgoi (the government) with extensive financial and economic background.

There is also a presidential election coming up in June, with the two biggest parties the left-wing Mongolian People’s Party (MPP) and the centre-right Democratic Party (DP) said to be in favour of keeping Oyu Tolgoi going.

Former Prime Minister Batbold Sukhbaatar remains the senior member of the ruling People’s Party and is one of the party’s likely 2021 presidential candidates.

Though not part of the negotiation team, Batbold was Foreign Minister when Rio Tinto struck the deal to develop Oyu Tolgoi, a mine that became the symbol of the new, open-for-business, Mongolia.

Current President Khaltmaagiin Battulga seems to align better with those who question the presence of foreign investors, including Turquoise Hill and Rio Tinto.

Opponents believe the mine and its copper belong to Mongolia and that the western companies involved are exploiting the country’s natural resources without giving enough back.

Anti-foreigners

Battulga has recently also brought back a previously rejected draft law requiring international investors to use Mongolian banks.

Analysts believe the move would scare foreign investors and they see it as a tactic to loosen Rio and Turquoise Hill’s grip on the giant mine.

They also worry Battulga could be paving the way for Russia or China to get involved in Oyu Tolgoi.

He is a known admirer of Vladimir Putin, speaks Russian fluently and has a Russian partner — Angelique Davain.

Rio Tinto has repeatedly said the underground expansion is its most important growth project. Once completed, Oyu Tolgoi will churn out 480,000 tonnes of copper a year from 2028 to 2036.

It is understood that the miner has offered to cut the fee it charges Mongolia for managing the development of Oyu Tolgoi and has already reduced the interest rate on loans provided for the project.

A US judge denied a request by Arizona’s San Carlos Apache tribe to block the Trump administration from publishing the final environmental study for the land swap needed by Rio Tinto to build the Resolution copper mine.

The US Forest Service published on Friday the environmental impact statement for the project, a joint venture owned by Rio (55%) and BHP (45%), starting a 60-day countdown for the government to swap land with Rio.

The agency also published a draft record of decision indicating it will issue, pending review, permits for use of power lines, pipelines and roads in the area.

Resolution is one of the largest undeveloped copper deposits in the world and has an average grade of roughly 1.5% copper. Ore production from the operations could reach approximately 120,000 tonnes per day, according to Rio’s Resolution Copper subsidiary.

The mine is estimated to produce as much as 40 billion pounds of copper over 40 years and could supply a quarter of US copper demand.

The non-profit community organization Apache Stronghold filed the lawsuit Tuesday in US District Court in Phoenix challenging the land
transfer on the grounds that the giveaway violates the Religious Freedom Restoration Act and Apaches’ constitutional rights to religious freedom.

The judge said that the release of the final environmental study does not necessarily mean the land swap will go through, although the US Congress had mandated just that in 2014. The judge has set a series of hearings on the matter over the next two weeks.

Lawyers for tribal members say they are looking forward to the hearings and hope the judge will invalidate the environmental study or rule the 2014 act by Congress unconstitutional.

As an added defense, tribal members on Thursday filed a property lien on the land, effectively saying the government does not own the land and thus cannot give it away.

Rio Tinto said in a statement following the study publication that it will continue to engage with Native American tribes and seek consent before any decision on the development of the project.

“We will comply with all laws related to Native American cultural heritage and will strive to do more,” said Resolution project manager Andrew Lye in a December 23 letter seen by Bloomberg.

Also in December, Rio Tinto named Chief Financial Officer Jakob Stausholm as CEO after Jean-Sébastien Jacques resigned under pressure from investors over the company’s destruction of a 46,000-year-old sacred Indigenous site in Australia.

BHP Group said it recognizes the Oak Flat land “has historical cultural significance for Native American tribes” and plans to monitor Resolution’s tribal negotiations.

Arizona Governor Doug Ducey, a Republican, praised the decision, saying the state “can have a robust mining sector while protecting our environment and cultural history.”

“I’ll defend this land to the very end,” said Wendsler Nosie, the former chairman of Arizona’s San Carlos Apache tribe who has formed a protest camp at the mine site.

“It’s silly for anyone to think” the companies could offer anything to gain tribal consent.

(With files from Reuters and Bloomberg)

Canada’s Lucara Diamond (TSX: LUC) has found an unbroken 341-carat white gem-quality rock at its prolific Karowe mine in Botswana, with analysts estimating it could fetch more than $10 million.

The Vancouver-based miner said the diamond was recovered over the Christmas period from milling of ore coming from the south western quadrant of Karowe’s South Lobe.

The diamond is the 54th stone over 200 carats recovered at Karowe since it began commercial operations in 2012.

The find builds on previous historic recoveries which include the 342-carat Queen of the Kalahari, the 549-carat Sethunya, the 1,109-carat Lesedi La Rona found in 2015, and the 1758-carat Sewelô, recovered in 2019.

Beyond Sewelô, the only larger diamond ever unearthed is the 3,106-carat Cullinan Diamond, discovered in South Africa in 1905. The Cullinan was later cut into smaller stones, some of which now form part of British royal family’s crown jewels.

Revenue lift potential 

BMO Capital Markets analyst Ray Raj said that based on past prices for similar size stones, the new diamond could sell for more than $10 million.

“The continued recovery of the significant high value stones from the South Lobe further highlights the importance of the Karowe underground expansion,” he wrote.

Raj also highlighted a “significant” revenue potential for Lucara this year, with the sales process from the 549-carat and the 998-carat diamonds recovered in 2020 expected to be completed in 2021.

Botswana renewed Lucara’s mining license in early January for another 25 years. The move allows the company to move the Karowe’s underground expansion project to its execution phase.

Moving the operation underground will cost $514 million. It is expected to take five years and extend Karowe’s productive life by 20 years — until 2040.

The development will allow Lucara to exploit the highest value part of the orebody first and generate over $5.25 billion in gross revenue.

Rio Tinto and the Quebec government have announced the development of the first scandium oxide plant in North America. The commercial-scale demonstration plant, which is already under construction, will cost about $6 million and has the capacity to produce 3 tonnes per year.

Considering the current size of the market, estimated at around 20 tonnes per year, the production will be significant for Rio Tinto and Quebec.

“With the first production unit, Rio Tinto will become the leading producer of high-purity scandium oxide in North America,” said Stephane Leblanc, Rio Tinto Iron and Titanium’s managing director, in a virtual press conference on Thursday.

The modular plant is expected to begin production by the end of June. Leblanc noted that it can be scaled up to meet demand and estimates that production could be increased to reach over 12 t/y annually.

As part of a push by Quebec to support the production of critical minerals as well as specialized refined products for the technology sector, the province will contribute a total of $850,000 to the project — $500,000 from the Ministry of Energy and Mines and $350,000 from the Ministry of Economy and Innovation. Quebec launched its $68-million Plan for the Development of Critical and Strategic Minerals Development in October.

Scandium is one of 22 critical and strategic minerals identified by the province in the plan.

“The scandium oxide recovery project is an inspiring example of how our tailings can be developed, it’s a testament to our ability to seize opportunities in a growing market and it is a testament to the role that Quebec can play in the field of super alloys and (critical and strategic minerals).” said Jonatan Julien, Quebec’s Minister of Energy and Natural Resources at the news conference.

There are currently two major markets for scandium oxide – to produce high-performance aluminum alloys for the aerospace, defence and 3-D printing industries, and in the production of solid oxide fuel cells. However, the uses of scandium are much wider and are growing. In an optimistic scenario, the Boston Consulting Group estimates demand could reach 650 tonnes annually by 2028.

A very low addition of 0.1 to 0.2% of scandium in aluminum increases its mechanical properties, heat and corrosion resistance, and welding properties.

Rio Tinto discovered scandium oxide in the ore at its Lac Tio open pit mine in Havre-Saint-Pierre, Que., five years ago.

After starting with lab testing in 2015 and moving to a pilot plant in 2017, the company developed a process to produce high-purity scandium oxide with a purity of over 99.99% from waste generated during the processing of titanium dioxide in 2019. Last year it produced an aluminum-scandium master alloy.

Since the scandium is extracted from waste and no additional mining is required to produce it, its production has a small environmental footprint.

(This article first appeared in our sister publication, the Canadian Mining Journal, part of Glacier Resource Innovation Group)

Buoyed by the ramp-up of its Lucky Friday mine in Idaho, following a nearly three-year strike by unionized workers at the operation, Hecla Mining produced 13.5 million oz of silver in 2020 – the highest since 2016.

The strike, which lasted from March 2017 to January 2020, limited production at the operation. Following a ramp-up period, full production at the underground mine was achieved in the final quarter of 2020. Lucky Friday produced a total of 2 million oz silver last year, and is expected to produce more than 3 million oz. this year.

The Lucky Friday ramp-up also boosted Hecla’s 2020 production of lead by 41% to a total of 34,128 tonnes, and its zinc output by 7% to 63,112 tonnes.

Hecla’s production of gold, however, fell by 23% to 208,962 oz from 2019, which was a record year for the company’s output of the yellow metal.

For the year, the company’s total silver-equivalent production was 40.7 million oz; measured in gold equivalent, production was 471,413 oz.

Hecla owns five producing mines in the United States, Canada and Mexico.

“Despite the challenges of operating during the pandemic, 2020 marked a year of very strong operational performance with silver production significantly exceeding guidance,” said Hecla’s president and CEO, Phillips S. Baker, Jr., in a release. “Our U.S. silver production was 15% higher than the year before and more than 50% higher than 2018, strengthening our position as the United States’ largest silver producer. The strong performance allowed Hecla to reduce net debt, increase dividends, and double exploration expenditures while more than doubling last year’s cash position. At current prices, we could repeat these results in 2021.”

After reducing its net debt position by 16% or C$75 million, Hecla ended the year with C$131 million in cash.

The company’s largest mine, Greens Creek, in Alaska, produced 10.5 million oz silver and 48,490 oz of gold last year. Casa Berardi, in Quebec, contributed 121,493 oz of gold – a 10% decrease from 2019 production owing to a three-week suspension of operations mandated by the province in response to the covid-19 pandemic, as well as planned downtime for major mill repairs in the third quarter.

At its Nevada operations, Hecla recorded production of 31,756 oz of gold and 37,443 oz of silver. The company reports that it has now mined the non-refractory ore at the operation, with mining of refractory ore taking place in the fourth quarter for a bulk sample test that is expected to produce around 5,000 oz gold in the first half of 2021.

The company wrapped up mining and milling at its San Sebastian mine in Durango, Mexico, in the latter half of 2020, producing 1 million oz silver and 7,233 oz of gold for the year. Exploration is ongoing, and Hecla says it will evaluate further mining potential based on the results.

In last year’s third quarter, Hecla increased its silver production guidance slightly to 12.8 to 13.4 million oz (up from 12.4 to 13 million oz) and silver all-in sustaining costs downward to $11.75-$12.25 per oz (from $12.25-13.25 per oz), after byproduct credits. Its gold production guidance remained steady at 200,000 – 207,000 oz gold, while its gold production cost estimate rose to $1,300-$1,350 per oz, up from $1,150-$1,250 previously.

The company’s fourth quarter and full-year financial results have not yet been released.

(This article first appeared in the Canadian Mining Journal)

Centerra Gold (TSX: CG) announced Thursday that its fourth quarter and annual gold output both exceeded the upper end of the company’s consolidated 2020 production guidance.

Gold production in the fourth quarter came to 172,446 ounces, including 90,402 ounces produced by the Kumtor mine in the Kyrgyz Republic, 42,664 ounces produced by the Mount Milligan mine in British Columbia and 39,380 ounces produced by the new Öksüt mine in Turkey, which achieved commercial production on May 31.

For the full year, gold production was 824,059 ounces, which exceeded the upper end of guidance. This includes 556,136 ounces produced by the Kumtor mine, 161,855 ounces produced by the Mount Milligan mine and 106,068 ounces produced by the Öksüt mine.

Production costs are expected to fall within the annual guidance range of $410 to $460 per ounce, while all-in sustaining costs (AISC) on a byproduct basis are expected to be below the lower end of the annual guidance range of $740 to $790 per ounce.

Meanwhile, copper production reached 20.4 million pounds in the fourth quarter and 82.8 million pounds for the full year 2020, each within their respective guidance range.

BHP said operations continue at its Cerro Colorado copper mine in Chile after the country’s Supreme Court upheld local indigenous communities’ complaint about the project’s water use.

After a five-year legal battle, the court ruled that a routine evaluation of the mine’s environmental project failed to take into account warnings by locals that its operations were overdrawing water and impacting local wetlands.

Lorenzo Soto, a lawyer for the San Isidro de Quipisca Indigenous Agricultural Association, told Reuters on Thursday that water pumping to feed Cerro Colorado’s operations had almost entirely dried out high-altitude wetlands around its operations in the Tarapaca region.

“The surrounding communities are victims of dust and noise emissions, and any water they have is contaminated,” he said.

“We hope that in the coming days, out of respect and compliance with a verdict, BHP will stop,” Soto told local Radio station Bío Bío.

BHP, however, said the Supreme Court ruling does not order the closure of Cerro Colorado’s operations.

“The ruling expressly maintained the procedural solution ordered by the Environmental Court dated February 8, 2019,” the company said in a statement.

“Cerro Colorado is already working on compliance with the measures required by the Environmental Court before the Environmental National Agency and, in accordance with the provisions of the Supreme Court, reaffirms its willingness to establish dialogue processes based on respect, good faith and the principles of the BHP Indigenous Peoples Plan,” BHP said.

In July 2020, the miner decided to ramp down activity at the mine amid the coronavirus pandemic.

Cerro Colorado produced 71,700 tonnes of copper in 2019, or approximately 1.2% of Chile’s total.

The board of directors at Largo Resources (TSX: LGO) is considering a share consolidation on a one-for-ten basis, with a view of a potential listing in the US.

A special meeting of shareholders will be held on March 1 to vote on this matter, the company said. Any authority of the board to consolidate the shares is conditional upon the prior approval of the company’s shareholders and the Toronto Stock Exchange.

Largo is a vertically integrated vanadium producer servicing multiple market applications through the supply of its VPURE (standard-grade vanadium) and VPURE+ (high-purity vanadium) products. These are sourced from one of the world’s highest-grade vanadium deposits at the company’s Maracás Menchen mine located in Brazil.

In 2020, the Maracás Menchen operation was expected to produce between 11,750 and 12,250 tonnes of vanadium pentoxide.

Recently, Largo launched its US-based Largo Clean Energy division, which is aimed to provide long-duration vanadium redox flow battery systems for the fast-growing global renewable energy storage market. Largo believes that a potential US listing would help the company develop this new business.

Shares of Largo Resources jumped 11.7% to C$1.71 per share by midday Thursday, having hit a 52-week high of C$1.78 earlier in the day. The company has a market capitalization of approximately C$964 million.

Environmentalists and politicians in Goa, India, known globally for its beaches and dense forests, are opposing a plan by Prime Minister Narendra Modi’s government to turn the southwestern coastal state into a coal transportation hub.

Protests against the initiative began last year, when New Delhi unveiled three infrastructure projects to increase coking coal handling at the state-run Mormugao Port Trust (MPT) in Goa. The proposed developments include the expansion of a highway, railway, and a power transmission network, which locals claim would cut through ecologically sensitive areas, such as the Mollem National Park.

India’s Environment Minister Prakash Javadekar cleared the projects over video conference in March, barely two weeks after the country had gone into a coronavirus lockdown.

“People are asking, ‘What’s in it for us?’” lawyer Savio Correa, who lives near the Mormugao port, told the Financial Times. He added the plan, particularly the railway track expansion, would affect thousands of people, “destroy the environment” and “make it impossible to live” due to “noise and coal dust pollution.”

“You want to carry coal, but are Goans benefiting, or are we sacrificing our health and our economy for the benefit of somebody else?,” Correa said.

The park and the adjoining Bhagwan Mahaveer Sanctuary, covering a protected area of 240 sq km, is set to be splintered and partially deforested by the invasive projects, activist Claude Alvares, director of the Goa Foundation, told local media last year.

Biodiversity at stake

The area in question has been recognized by Unesco as one of the world’s eight “hottest hotspots” of biological diversity. It is also the site of a 12th Century Hindu temple, tropical forests and waterfalls, including Dudhsagar Falls, a major tourist draw.

Goa’s government has said the projects have nothing to do with coal. They say the new power line will provide the state much-needed electricity, the highway will meet the demands of growing traffic and the extra railway line will allow more goods and passenger trains to run.

MPT currently handles around nine million tons of imported coal bound via road and rail mainly for steel plants in neighbouring states.

Reports suggest that MPT aims to import 51.6 million tonnes by 2030 to transport it through Goa to other states for companies such as the Adani Group, JSW Group and Vedanta.

Defense Metals (TSXV: DEFN) announced that it has commissioned the Saskatchewan Research Council (SRC) to complete an X-ray transmission sorting amenability study with respect to mineralized feed sourced from its Wicheeda rare earth element property in British Columbia, Canada.

In a press release, Defense Metals said that the objective of the SRC amenability study is to investigate XRT sorting for the purpose of upgrading Wicheeda REE mineralization prior to downstream processing.  

“Sensor-based sorting has several advantages when applied to REE mining projects in that beneficiation occurs without water and with reduced grinding requirements,” the media brief reads.

“The investigation will assess how much gangue can be removed from the head feed. The investigation will then carry out an iterative study of different sorting sizes to process in the XRT sorter assessing both the grade of the upgraded concentrate and the grade of the waste for economic studies whereby the optimum operational parameters can be determined.”

Located close to existing infrastructure near the city of Prince George, the Wicheeda project has indicated mineral resources of 4,890,000 tonnes averaging 3.02% light rare earth elements and inferred mineral resources of 12,100,000 tonnes averaging 2.90% light rare earth elements.

Flotation pilot-plant processing of a 26-tonne bulk sample of Wicheeda REE material yielded a mineral concentrate averaging 7.4% neodymium-praseodymium oxide, which is critical for magnet metals.

Defense Metals also reported that 70% of the estimated cost of the XRT amenability study test-work will be covered by funding from the National Research Council of Canada Industrial Research Assistance Program, which has been granted to both the company and the SRC.

The NRC IRAP is a Government of Canada funded program mandated to provide financial support for technology innovation.

Lithium Chile (TSXV: LITH) announced that the easing of covid-19 restrictions in place in Chile since early in 2020 has allowed its team to get to the Laguna Blanca project and kick off an expanded 2021 exploration campaign. 

In a press release, the Canadian miner said that given the project’s location near the border with Argentina, it underwent a year-long access restriction because the government not only closed the border but also nearby roads to reduce the risk of cross-border contamination.

Now that these restrictions have softened, the company’s team was able to reach Laguna Blanca and is currently conducting a program of salts and liquids sampling. The program is intended to extend initial sampling that covered less than 10% of the 4600-hectare property but returned high lithium and cesium grades from surface salt-sediments to a depth of 1.2 meters.

“The high grades of both lithium and cesium in the solid samples have made an advanced exploration program on the Laguna Blanca property a priority for Lithium Chile as the lithium and cesium grades were some of the highest grades seen by the company to date,” the media brief states. “Lithium assay grades ranged from 1125 to 1450 ppm and cesium assay grades ranged from 112 to 688 ppm.”

Laguna Blanca is located in east-central Chile, close to the Helados salt flat. Besides this property, Lithium Chile owns 16 additional lithium projects in the South American country which all together add up to 166,950 hectares.