Premier Gold Mines (TSX: PG) produced more than 19,000 ounces of gold during the third quarter of 2020, meeting the high-end of its expectations, the company reported on Wednesday.

Production from the wholly owned Mercedes mine in Mexico reached 12,183 ounces, exceeding the mine’s new operating plan, which was developed during the care and maintenance period in Q2 to focus on enhanced productivity and reducing costs.

Significant progress has been made with respect to cost reduction initiatives laid out in the new Mercedes operating plan, the company said, and this will be reflected in unit operating costs reported for Q3.

At the 40%-owned South Arturo joint venture in Nevada, the El Nino underground mine continued its trend of strong quarterly production, producing a total of 7,096 ounces from more than 650 tonnes of ore per day, surpassing its annual production plan.

Premier and its partner Nevada Gold Mines will continue to advance additional development opportunities at South Arturo, including the Phase 1 and Phase 3 open-pit projects, and are assessing the potential for an on-site heap leach facility.

Shares of Premier Gold Mines rose 3.1% by 2:15 p.m. EDT, giving the company a market capitalization of C$675.3 million.

SilverCrest Metals plans to spend $60 million on drilling through the end of 2022 at its Las Chispas silver-gold project in Sonora, Mexico.

“Growth from drilling is a huge part of our story and we have only scratched the surface” president Chris Ritchie said during a webinar.

According to the executive, the company was guiding on publishing an 85-95Moz reserve with the feasibility study with higher grade ounces from recent drilling coming into the mine plan, pushing lower grade ounces further back.

Drilling will include the El Picacho property the company recently acquired with two rigs planned once it receives drilling permits. It hosts 4-8m wide veins compared to 1-2m veins on the main property, and at 85km distance from Las Chispas, it is within trucking distance and could provide additional feed to allow the company to expand the initial 1,250 tonnes per day plant.

The company recently announced that it has completed 97,700 metres of in-fill and expansion drilling at Las Chispas.

SilverCrest re-started exploration and development activities at the project after a temporary suspension from March 30 to May 23 in response to covid-19.

During H1, SilverCrest completed approximately 2.1 kilometres of underground decline and lateral development, and stockpiled an additional estimated 12,000 tonnes of mineralized material for a total stockpile of an estimated 41,000 tonnes at estimated diluted grade of 1,000 gpt silver equivalent (“AgEq” at 75:1, Ag:Au).

According to the company, Las Chispas construction activities continued with the building of the administration and warehouse facilities, the temporary quarantined covid-19 camp, and the production water pumping stations.

A Preliminary Economic Assessment (PEA) completed in 2019 indicates an average annual production of 5,384,000 oz Ag and 55,700 oz Au, or 9.6 million oz AgEq.

Midday Wednesday, SilverCrest’s stock was up 1.5% on the TSX. The company has a C$1.7 billion market capitalization.

Despite a more tempered performance from precious metals during the third quarter of 2020, gold and silver prices still demonstrated gains and outperformed initial expectations from analysts at Haywood Research.

During the quarter, gold prices averaged $1,911/oz, which was above the firm’s forecasted gold price of $1,800/oz and 11% higher than the second quarter average of $1,714/oz. Silver averaged $24.35/oz, again above the forecast of $18.00/oz and 49% higher than the second-quarter average of $16.38/oz.

Year-to-date, gold and silver — up 26% and 41% respectively — have appreciably outperformed the S&P 500 (up 6%) and the TSX Composite Index (down 3%), Haywood points out.

In its latest commodities report, the firm maintains its view that the precious metals complex is still within a long-term uptrend and believes that the ongoing pullback from peak gold price levels reached in early August represents a “healthy period of consolidation.”

This trend also supports a base which Haywood expects will sustain above the 2011 high of $1,923/oz as “ongoing macroeconomic factors remain constructive.”

Looking forward, the firm has lifted its Q4 2020, 2021 and long-term forecasts to $1,900/oz, $1,850/oz and $1,800/oz respectively, while keeping in mind that further revisions may be needed following next month’s US presidential election.

PM equities outlook

On the equities side, Haywood analysts note that existing valuations will continue to be modest, with many stocks trading at multiples which are seemingly discounting commodity prices below existing spot levels.

They expect this valuation discord to eventually converge as elevated commodity prices support ongoing free cash flow generation, net debt reduction, accretive industry consolidation, and shareholder returns via dividend yields and share buybacks. In turn, such trends could “provide generalist investors with additional confidence to allocate capital into the sector,” Haywood says.

By the end of the third quarter, GDX and GDXJ — two ETFs that track equities in the gold mining sector — closed 7% and 12% higher respectively, with gold prices up 5% during the three-month period.

Haywood believes that this sector still resides in an “opportune state” where commodity prices have buoyed equities and facilitated consolidation, mainly amongst the producers, as many have seen expanded margins and higher cash flow generated due to the higher gold price YTD.

It is expected that M&A activities will continue in the sector, likely involving targets that are progressively smaller or less advanced in profile.

As for the outperformers, the firm maintains that those companies can continue to deliver over the near and medium term, though it prefers investment positioning in gold miners that can “crystallize value through organic growth” from drilling to operations.

Fortuna Silver Mines (NYSE: FSM) (TSX: FVI) saw an increase in precious metals output for the third quarter of 2020 from its two operating mines in Latin America, the San Jose mine in Mexico and the Caylloma mine in Peru.

Over that three-month period, the company produced 2.1 million ounces of silver and 12,791 ounces of gold, plus base metal byproducts. The silver output was a 10% improvement over the same quarter last year, while gold production was 12% better than Q3 2019.

The San Jose mine contributed to a majority of those production with approximately 1.9 million ounces of silver and 11,425 ounces of gold. Despite a minor decrease in mined tonnage, the mine’s output increased in the quarter due to better grades encountered in the peripheral low-grade areas. Average head grades for silver and gold were 254 g/t and 1.52 g/t, respectively.

At the Caylloma mine, silver production rose to 210,206 ounces with an average head grade of 74 g/t. It also churned out 6.7 million pounds of lead and 10.3 million pounds of zinc, with average head grades for lead and zinc of 3.15% and 4.93%, respectively.

In total, silver and gold production for the first nine months of 2020 reached 5.2 million ounces and 29,992 ounces, respectively.

At the beginning of Q2 2020, Fortuna withdrew its production and cost guidance for the year until further notice due to the uncertainties related to the impact caused by covid-19.

Shares of Fortuna Silver Mines jumped 4.0% on the TSX by noon EDT Wednesday. The Vancouver-based miner has a market capitalization of C$1.7 billion.

De Beers, the world’s largest diamond producer by value, said on Wednesday that its latest sale of roughs yielded 40% more revenue than the seventh cycle, which already was more successful than the previous event.

The Anglo American unit, which sells diamonds to a handpicked group of about 80 buyers 10 times a year at events called “sights”, sold $467 million worth of rough diamonds in the eighth cycle, compared to $320 in the previous one. 

The results bring De Beers’ total revenue from rough diamonds in the second half of 2020 to more than $900 million.

De Beers’ chief executive Bruce Cleaver said that while the demand increase was encouraging, it was too early to be sure of a sustained recovery in trading conditions.

“We continue to see a steady improvement in demand for rough diamonds in the eighth sales cycle of the year, with cutters and polishers increasing their purchases as retail orders come through ahead of the key holiday season,” Cleaver said in the statement.

The strong figures are further evidence of improving demand for rough diamonds, according to said BMO analyst Edward Sterck. He warned, however, that there is a significant accumulation of upstream diamond inventories, which could suppress the recovery if liquidated too soon and too quickly.

“Maintaining good diamond prices through the recovery will depend upon the pace at which the inventory is unwound, with De Beers and Alrosa holding the keys to the bulk of this inventory,” Sterck wrote in a note to investors.

The analyst also said the fact De Beers only provided a revenue figure meant it was unable to gauge how prices were trending.

Lower prices, more flexibility

De Beers has continued to implement a more flexible approach to sales during the sixth and seventh sales cycles of the year, as a result of restrictions triggered by the pandemic.

The usual week-long sight holder events have been extended towards near-continuous sales.

It has also cut prices of its stones, sometimes by almost 10% for larger diamonds, in an effort to spark sales.

Before the price reduction, De Beers had made major concessions to their normal sales rules — allowing customers to renege on contracts and view diamonds in alternative locations.

Along with Russia’s Alrosa, the world’s top diamond producer by output, it has also axed supply of roughs to the market, but built up their own stockpiles.

The diamond giant noted that despite ongoing efforts, it expected it would take “some time” to get back to pre-pandemic levels of demand.

De Beers and Alrosa’s view is shared by many in the industry. India, which polishes about 90% of the world’s rough diamonds, expect the slump in exports to be worse this year than in 2008.

Colin Shah, chairman of the Gem & Jewellery Export Promotion Council, told Bloomberg News on Wednesday that overseas sales of cut and polished diamonds may slump 20% to 25% in the year ending March from $18.66 billion last year.

That would push exports to the lowest in data going back to the 2009 fiscal year on the body’s website.

Ares Strategic Mining (TSXV: ARS) announced that it has received approval to commence mining operations and an environmental permit for its Lost Sheep fluorspar project in Utah.

Acid grade fluorspar is a high-purity material used by the chemical industry.

In a press release, the Canadian miner said that following the granting of the permits and a series of meetings with local government and regulators, management has started putting arrangements in place to begin mining operations and construction work. 

The company also said that it has acquired additional land for the purposes of stockpiling product to ensure a constant feed for processing is available, especially during winter months and mine shut down periods for construction work and upgrades.

“These advances are running parallel with the great results from the current drill program, which have identified large high-grade fluorspar mineralization zones within the company’s permitted mining area,” James Walker, Ares’ president and CEO, said in the press brief.

“The additional security of knowing we will be supported by the government through the new Executive Order puts Ares in a very secure position and gives our company and shareholders added protection.”

In late September, the White House issued an order addressing the “threat to the domestic supply chain from reliance on critical minerals from foreign adversaries.” Fluorspar was listed among these critical minerals.

Walker believes that the 1447-acre Lost Sheep project is key to start building a domestic supply of fluorspar.

Big Ridge Gold (TSXV: BRAU) and the Bunibonibee Cree Nation have finalized an exploration agreement for the Oxford gold project, located within the BCN traditional territories in northern Manitoba, Canada.

In a press release, the parties said that the agreement provides the BCN with cultural and environmental protection measures and financial and socio-economic benefits, including jobs and training for additional employment opportunities in the mining industry. 

“This agreement provides long-term certainty of tenure to ultimately advance the Oxford gold project to the bankable feasibility study stage,” the miner and the First Nation said in a joint statement.

“The agreement enhances BCN and Big Ridge’s existing relationship of mutual respect and demonstrates that Manitoba is a jurisdiction in which the untapped mineral potential can be explored and developed for the benefit of all stakeholders.”

The 36,000-hectare Oxford gold project is located in central Manitoba, approximately 160 kilometres southwest of Thompson. 

According to Big Ridge, the property contains many high priority targets that will be the focus of near-term exploration work and includes the Rusty Gold deposit, which is hosted by banded iron formation and has a historic resource of 800,000 tonnes, grading 6g/t Au and contains approximately 154,000 oz. Au.

Shares in Newcrest Mining (ASX, TSX, PNGX: NCM) were up almost 2% in pre-market trading in Canada on Wednesday as the miner, Australia’s largest gold producer, headed to its second day at the Toronto Stock Exchange.

The stock was up 1.8%, or 56 Canadian cents, to C$30.25, as gold prices regain part of the ground lost following Tuesday’s sharp pullback and reclaim the key $1,900 an ounce mark.

Gold miners have benefited from rising bullion prices, which have jumped around 30% this year as central banks dial up stimulus measures in response to the coronavirus pandemic.

Newcrest said the listing is part of its strategy to pursue growth in the Americas. It follows the acquisition of a 70% interest last year in the Red Chris copper and gold mine in British Columbia.

In 2018, the company had grabbed an equity interest in Vancouver-based Lundin Gold (TSX: LUG) to help it develop the Fruta del Norte gold project in Ecuador.

Newcrest chief executive Sandeep Biswas believes the Toronto listing will improve its global visibility.

“We have observed an increase in interest from North American investors in the gold sector over the last six months,” Biswas said in a statement. “When combined with our large existing North American shareholder base it makes sense for Newcrest stock to be able to be traded in this time-zone.”

The company will retain its primary listing on the ASX, and its secondary listing on the Papua New Guinea Exchange market, also trading under the symbol NCM.

As of August 31, 2020, there were 1,129 mining companies listed on both the TSX and TSX Venture Exchange, with a combined market capitalization of C$523 billion, including 95 international mining companies with a combined market capitalization of C$105 billion.

Ahead with expansions

Newcrest said earlier this month that it was going ahead with a second-stage expansion of its flagship Cadia gold mine, located in New South Wales, Australia.

The project, it said, would likely increase plant capacity to 35 million tonnes per annum (mtpa) from 33 mtpa and reduce the all in sustaining costs (AISC) by an estimated $22 per ounce.

Newcrest’s board has also approved a front-end recovery project at the company’s Lihir mine, in Papua New Guinea.

The projects require a combined investment of $236 million and are expected to boost gold production and recoveries at the two mines.

Global engineering group Sandvik has signed a memorandum of understanding (MOU) with Northern College, a post-secondary apprenticeship and industry training provider, to work collaboratively to develop a Northern College Battery Electric Vehicle (BEV) Technician program. The two parties will also aim to enhance existing battery technician training modules to educate service technicians and support the growing requirement for specialized BEV technicians in the mining industry. Sandvik has partnered with Northern College to offer this training program for service technicians to prepare them for employment in this field.

Battery-electric vehicles are increasing in popularity in the Canadian mining industry due to the improvements they offer in operating environments, maintenance costs, efficiency and productivity. Specialized BEV technicians are required to support the growing fleet of battery-electric vehicles in Canada.

“It’s important to be aware of the fact that the technology powering battery-electric vehicles is considerably different than that of diesel machines,” Audrey Penner, President and CEO of Northern College, said in a release. “Servicing and maintaining these fleets requires a different skillset than what is required for a diesel-powered fleet because BEVs have fewer mechanical components and more electrical components. For that reason, the Canadian mining industry requires a new generation of service technicians who are trained in servicing electrically powered machinery and Northern College is responding to that call for talent and training,” Penner added.

Northern College and the Haileybury School of Mines will develop a program with Sandvik and their partners to educate participants in BEV technology. Sandvik will serve as a subject matter expert on the topic of BEVs in a mining application to ensure that program graduates are educated in areas that are relevant for the mining industry.

“This program is really a win-win for a cleaner industry while also supporting resource development in the communities close to the mines using BEV technology,” added Peter Corcoran, VP Canada with Sandvik Mining and Rock Technology.

“We are investing in educating this next generation of service specialists because we forecast an increase in demand for technicians in the BEV field as more operations transition to low-emissions equipment. We also want to invest in the local talent pool as the benefits of hiring locally and developing sustainable capacity in the community cannot be understated,” Corcoran said. “This partnership addresses both of those areas.”

One industry proponent of BEVs in mining is Kirkland Lake Gold.

“Using BEV(s) at our Macassa Mine benefits us in a number of ways, including significantly lowering greenhouse gas emissions, improving working conditions and reducing capital requirements for ventilation” added Evan Pelletier, Kirkland Lake Gold’s VP of mining.

Pelletier explained that Kirkland Lake Gold was among the first to bring electrification to the mining industry, and the company has seen significant improvements in BEV technology in a relatively short time. Based on Kirkland Lake’s experience, Pelletier believes that the participation of both Original Equipment Manufacturers (OEMs) and mining companies in the development of a technician training program will be an important contributor to the program’s success.

“Working with colleges will help Kirkland Lake Gold further develop our technicians in this field,” Pelletier explained. “The program will not only develop new technicians, it will help to establish BEV standards in the industry that will lead the way for future advancements.”

(This article first appeared in the Canadian Mining Journal)

The future of the Ekati diamond mine in Canada’s Northwest Territories remains uncertain after Dominion Diamond Mines announced that a deal to sell it to a subsidiary owned by its parent company, The Washington Companies, has fallen apart.

Dominion Diamond reported on Oct. 9 that three insurance companies – Aviva Insurance Company of Canada, Argonaut Insurance and Zurich Insurance – had reached “an impasse” in negotiation with the purchaser, and stated “there is no reasonable prospect of reaching a satisfactory agreement among them.”

Dominion Diamond, which was purchased by The Washington Companies in November 2017 for $1.2 billion, was granted creditor protection in April. Mining was suspended and the Ekati mine placed on care and maintenance in March due to the coronavirus.

Altogether, the three insurance companies have issued about C$280 million in surety bonds to the government of the Northwest Territories that were intended to guarantee that the diamond mine could be closed safely and reclaimed once the mine closes permanently.

The sale was subject to a condition that the insurance companies and the purchaser reached an agreement on the treatment of the existing surety bonds.

Dominion remains in creditor protection until November 7, 2020, unless extended, it said, and is working with its advisors on next steps.

“The company will be assessing all strategic alternatives to return the Ekati diamond mine to full operations for the benefit of its employees, the Northwest Territories and other stakeholders,” Dominion Diamond stated in its news release.

The company has also confirmed that Pat Merrin, the company’s interim CEO since February, has relinquished that role. “In light of this development, Pat has advised that it would be appropriate that he step down as Interim CEO,” a company spokesman wrote in an email to The Northern Miner.

“Kristal Kaye, CFO and Mike Welch, COO will lead Dominion through this challenging period with strong support from the rest of the management team and our independent Chairman Brendan Bell.”

Dominion Diamond Mines is one of the world’s largest producers and suppliers of premium rough diamonds. The company owns a controlling interest in the Ekati diamond mine, which it operates, and 40% of the Diavik diamond mine. It also holds a controlling interest in the Lac de Gras diamond project. All of its assets are in the Northwest Territories.

(This article first appeared in The Northern Miner on October 13)

Lundin Gold’s (TSX: LUG) Fruta del Norte gold mine in Ecuador produced 94,250 ounces of gold during the third quarter of 2020, which was the mine’s first full quarter of operations.

Approximately 66,790 ounces were produced as a concentrate and 27,460 ounces as doré.

During the quarter, the mill processed approximately 324,000 tonnes at an average throughput rate of 3,340 tonnes per day, the company said. The average grade of ore milled for the quarter was 10.4 grams per tonne, and average recovery was 86.8%.

The underground mine, which produced its first gold in November 2019 and achieved commercial production in February 2020, was suspended over a three-month period earlier in the year due to the pandemic.

In July, Lundin resumed operations at Fruta del Norte and set its production guidance at 150,000 to 170,000 ounces for the second half of 2020.

Together with production achieved prior to the onset of the temporary suspension, total gold output for the year is estimated to be between 200,000 and 220,000 ounces.

Over a 13-year mine life, the operation is expected to produce an average of 325,000 ounces of gold annually at all-in sustaining costs (AISC) of $621 per ounce.

OceanaGold (TSX: OGC) announced on Tuesday that it has implemented the permanent layoff of 496 employees at its Didipio gold and copper mine, located across the Nueva Vizcaya and Quirino provinces on the island of Luzon, Philippines.

Along with the termination of direct employees, approximately 400 people working as contractors are also impacted, according to the miner.

“The company may be required to implement a second-round of permanent lay-offs in mid November and has provided notices to affected employees,” OceanaGold said in a press release.

Since July 2019, local government units have blocked access to and from the Didipio mine site.

Authorities claim they have been largely bypassed in a permit renewal process, which existing laws place under the national government’s realm.

“Today is a sad day for the company and for the many hundreds of workers and their families whose livelihoods have been impacted by the local government blockade of the public road pending the Financial or Technical Assistance Agreement (FTAA) renewal, which has constrained our ability to continue operations over the past 15 months,” said OceanaGold CEO Michael Holmes.

“The company has actively participated in community-led dialogue. Despite these efforts, a small group of local leaders have refused to consider access arrangements that would have preserved these jobs.”

Didipio, which began production in 2013, has Measured and Indicated resources of 1.3 million ounces of gold and 160,000 tonnes of copper.

Midday Tuesday, OceanaGold’s stock was down 1.6% on the TSE. The company has a C$1.28 billion market capitalization.

AbraPlata Resource (TSXV: ABRA) has released results from three diamond drill holes at its Diablillos project in Argentina. Drilling was designed to test extensions beyond the currently defined mineral resources, the company said.

The holes intersected numerous zones of gold and silver mineralization within oxides beneath the current resource boundary, highlighted by an intersection of 2 metres grading 10.20 g/t AuEq.

Two of the holes also intercepted zones of sulphide mineralization hosting copper with associated gold and silver farther down the holes, beneath the oxide zones, AbraPlata said.

The 80 square kilometre Diablillos property is located in the Argentine Puna region, which is the southern extension of the Altiplano of southern Peru, Bolivia and northern Chile. It was acquired by AbraPlata from SSR Mining in 2016.

There are several known mineral zones on the Diablillos property, with the Oculto zone being the most advanced with 11 diamond drill holes and approximately 90,000 metres drilled to date.

Meanwhile, the company has added a second drill rig at Diablillos and will be expanding its 2019-2020 drill program from 8,000 metres to approximately 13,000 metres in response to successful drilling results to date.

It will dedicate one rig to drill for expansions of the high-grade gold and silver oxide resources at Oculto and adjacent areas, as well as testing for the continuity of underlying copper-gold sulphide mineralization.

The second rig will be used primarily for reconnaissance exploration of peripheral target areas based on a recent ground mag survey.

“The addition of a second drill rig and expansion of the program to 13,000 metres allows us to further accelerate the discovery process aimed at expanding the large existing resource base at the Diablillos project,” president and CEO John Miniotis said in a press release.

AbraPlata’s stock surged 6.2% by 1:20 p.m. EDT Tuesday on the latest drill results. The Toronto-based miner has a market capitalization of approximately C$111.1 million.

Yamana Gold (TSX:YRI; NYSE:AUY) started trading on the LSE’s main market on Tuesday.

The company’s shares ended Tuesday’s trading at 467.50 GBP under the ticker AUY.

“We offer gold exposure via a high-quality, long-life asset portfolio in the Americas, organic production growth, a commitment to providing and increasing cash returns to shareholders, and a commitment to adhering to high ESG (environmental, social, and governance) standards,” said Peter Marrone, founder and executive Chairman of Yamana Gold in a media statement.

The company will maintain a primary listing on the Toronto Securities Exchange, as well as a listing on the New York Stock Exchange.

The Toronto-based company recently increased its full-year production guidance to 915,000 ounces of gold equivalent from its previous target of 890,000.

“While this represents a modest 3% improvement, it’s directionally positive and shows confidence in the fourth quarter,” BMO analyst Jackie Przybylowski said in a note to investors.

Exceptional operational performances in the June quarter from the company’s Jacobina mine in Brazil, El Peñón and Minera Florida, in Chile, as well as Canadian Malartic, prompted the company to re-think plans.

Yamana churned out of 201,772 ounces of gold and 3.04 million ounces of silver production in the three months to Sept. 30. Total gold equivalent production was 240,466 ounces. 

The miner is also hiking its dividend by a further 50% to $0.105/share for the fourth quarter of the year. At the new rate, it said, the dividend would be 425% higher than it was just 18 months ago.

Gold prices fell below $1,900 an ounce on Tuesday as the dollar rallied on an impasse over US stimulus. Investors also latched onto a slightly less stark economic report card from the International Monetary Fund, which alleviated some of the economic concerns surrounding the covid-19 crisis.

Spot gold fell 1.5% at $1,894.73 per ounce by 11:55 a.m. EDT, after falling by as much as 1.9% earlier in the session. US gold futures lost 1.6% to $1,898.00 per ounce in New York.

Meanwhile, the US dollar jumped 0.4% against rivals on Tuesday, making bullion more expensive.

“The stagnation in Washington over the next stimulus package continues to pressure assets like gold that were relying on the weakness in dollar for the next wave of support,” David Meger, director of metals trading at High Ridge Futures, told Reuters.

“The IMF and other agencies like US Federal Reserve have also noted that recovery has taken place a little quicker than they originally anticipated, so that would lead us to believe that there could be a need of lesser stimulus worldwide,” Meger said.

US House Speaker Nancy Pelosi said the latest coronavirus stimulus package offer by President Donald Trump fell short of what people need.

“Gold has been toyed with” during negotiations for the fiscal stimulus deal, with the latest deadlock “taking away some of the short term bullish drivers we anticipated,” said Edward Moya, a senior market analyst at OANDA.

“But all that means is that we’re going to get the stimulus later, probably early next year and that will lead to higher gold prices,” Moya added.

Frank Holmes, CEO of U.S. Global Investors, echoed the same sentiment:

“With the national debt now topping $27 trillion, such a package isn’t good for the government’s balance sheet, but it’s good for gold”

Investment in bullion remains strong. Last week, ETFs backed by physical gold climbed to a record amount, touching 111.05 million ounces. According to the World Gold Council (WGC), global gold ETFs saw their 10th straight month of inflows in September.

IMF silver lining

Earlier on Tuesday, the IMF said forecasts for the global economy were “somewhat less dire” as western countries and China rebounded more quickly than expected. This served as a silver lining for investors who were expecting the worst.

In its latest World Economic Outlook report, the IMF projected that the global economy would contract 4.4% in 2020, a slight improvement from the group’s midyear projection, the New York Times reported.

Gold, considered a hedge against inflation and currency debasement, has already risen 25% this year amid unprecedented global levels of stimulus during the pandemic.

(With files from Reuters)

Bullfrog Gold’s shares (OTCMKTS: BFGC) jumped on Tuesday after Barrick Gold (TSX: ABX) (NYSE: GOLD) confirmed it was selling a land package in Nevada to the minor, along with plans for C$22 million in financing to be completed through Augusta Investments.

The deal includes the sale of Barrick’s mining claims, historical resources, permits, rights of way and water rights on the 1,500 acres adjoining Bullfrog’s project.

Barrick will receive, in exchange, 54.6 million units, which each contain one share in Bullfrog Gold and one warrant at an exercise price of 30 cents over four years.

The substantial share exchange will give Barrick a 16.8% stake in Bullfrog, as well as a 2% smelter royalty on minerals produced from the claims.

As part of the transaction, Barrick can also nominate a director to Bullfrog’s board as long as it keeps at least 10% in the company moving forward.

The gold giant gained the now closed Bullfrog gold mine when it acquired Lac Minerals in 1994. Barrick ran it until 1999, when it closed shop because costs exceeded the price of gold, which was trading below $300 an ounce.

Bullfrog finalized a cash-for-share deal with mining-focused management group Augusta Investments. Through the deal, Augusta will receive 110 million units in Bullfrog in exchange for a $22 million investment.

As a result, Augusta will own 31.9% of Bullfrog on an undiluted basis, or 40.2% on a fully-diluted basis.

Cost reduction

Once closed, Bullfrog would be well funded to complete several exploration programs and expedite development of its namesake gold project. The company would also continue to pursue other acquisitions and opportunities in the precious metal sector, it said.

Bullfrog Gold now hopes to access the 525,000 ounces of gold estimated to still remain on the site.

The land addition also allows Bullfrog to backfill nearly all mine waste in the south part of the pit, reducing environmental impacts and mining costs, the Colorado-based company said.

The transaction is in line with Barrick’s strategy of shedding non-core assets. Chief executive Mark Bristow said in August the company would continue with non-core disposals, having met its $1.5 billion target set in 2018.

The gold giant recently announced the sale of its stake in the Morila mine, in Mali.

Shares in Bullfrog jumped 4.8% to 24 cents on Tuesday by 10:40 am, following the announcement. Bullfrog’s market cap is currently $37.56 million.

Cornish Lithium, a start-up hoping to lead the development of an industry for the battery metal in the UK, has raised almost £4 million ($5m) through a crowdfunding campaign to progress its work in the ancient mining region of Cornwall, south-west England.

The company, which announced last month the discovery of “globally significant” lithium grades in hot springs within the project, kicked off the campaign on Crowdcube on Monday.

The goal was raising £1.5 million, but within 30 minutes, Cornish Lithium had exceeded the target and by mid-afternoon Tuesday it had raised £3.9 million from more than 2,400 investors.

The junior is now deciding how much additional cash to accept and when to close the funding round through the Internet platform.

“We are raising additional funding at this time to continue towards our goal of creating a battery metals hub for the UK,” chief executive and founder Jeremy Wrathall said in a statement.

Cornish Lithium recently decided to also begin exploring for other battery metals, such as cobalt and copper. It’s also aiming at listing on the London Stock Exchange by 2022.

Good timing

The European Union is currently rebuilding automotive supply chains around battery metals, and incentivizing the adoption of electric vehicles (EVs).

According to projections from UK-based green policy group Transport & Environment, one in 10 new cars sold across Europe this year will be electric or plug-in hybrid, tripling last year’s sales levels.

The market share of mostly electric cars will rise to 15% next year, the group forecasts, as carmakers across the continent race to cut their carbon emissions levels.

Under new rules, in effect from January 2021, carmakers must reduce the average emissions from their vehicles to 95g of CO2 per km or face fines that could run into billions of euros.

China, which was originally planning to wean customers away from EV subsidies by 2020, is also doing its part. It recently announced a two-year extension to the plan through to the end of 2022.

Beijing made a 10% cut to subsidies this year and also limited the scope of subsidies to EVs costing less than 300,000 yuan ($44,318). 

Cornwall is a historic mining district, stretching back to the early bronze age. Copper, tin, zinc, silver and arsenic have all been exploited for centuries.

The area around St. Day and Gwennap was the richest copper-producing region in Cornwall (and the world) in the 18th and early 19th centuries.

Most lithium is produced in South America, Australia and China, but the UK government designated it last year a metal of strategic importance to the country.

German NGO Urgewald published a report showing that the World Bank Group has invested over $12 billion in fossil fuels since the Paris Agreement, $10.5 billion of which were new direct fossil fuel project finance. 

“In order to arrest the escalating climate crisis, the world needs an urgent and just transition from fossil fuels to renewable energy. Data shows that the energy transition is happening far too slowly,” the report reads.

“Researchers from several expert organizations, including the UN Environment Program, determined the world is currently on track to produce 120% more fossil fuels by 2030 than is compatible with a 1.5°C pathway.”

According to Urgewald, although the World Bank states that without urgent action, climate change will push more than 100 million people into poverty by 2030, the multilateral institution is still part of the problem.

To support this assertion, Urgewald lists the investments made by the World Bank Group – comprised of the International Development Association (IDA), the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) – since the Paris Agreement.

Namely, $10.5 billion was allocated to new direct finance for fossil fuels in 30 countries in the form of new loans, guarantees, and equity; $200 million was invested in technical assistance in 11 countries to push specific large fossil fuel projects forward and/or to increase future fossil fuel investments. This includes funding consultants to help market investment into Brazil’s upstream oil and gas resources.

The World Bank has also maintained $1.4 billion in existing equity in fossil fuel operations.

“Until divested, the Bank’s equity continues to provide financial benefits to fossil fuel operations, such as lowering the cost of loans for expansions or development of new oil/gas fields. The WBG continues to get dividends and capital gains (or losses) from its equity in these operations,” Urgewald’s report states.

In addition to the figures, Urgewald says that billions more go to fossil fuels through WBG mixed operations funding both fossil fuels and renewable energy (> $3 billion since Paris Agreement); investments made through financial intermediaries such as commercial banks; and the provision of $8 to over $10 billion annually in budget support, which governments are free to spend on any infrastructure or power/fuel payment, except for nuclear power.

“The world is running out of time to avert a worsening climate crisis. At this point, every public dollar the World Bank invests in fossil fuels pushes the world further and further away from being able to limit global warming to 1.5°C,” the review reads.

“The Bank’s public assistance should only be used to assist countries towards a just energy transition. Rather than locking countries into dependency on the fossil fuel industry, the Bank should finance job training for workers to leave those industries.”

Researchers from the University of Alberta, Penn State University and the University of Padua have discovered diamonds in an outcrop atop an unrealized gold deposit in Canada’s Nunavut territory, an association that mirrors what can be found in South Africa’s Witwatersrand Goldfields.

The Witwatersrand Goldfields comprise the world’s biggest gold deposit, responsible for more than 40% of the gold ever mined on Earth.

Led by Graham Pearson, a research team travelled to the Kitikmeot Region and bashed off 15 kilograms of conglomerate from Silver Range Resources’ (TSX-V: SNG) Tree River property. Then, they used mass spectrometry equipment to date the rocks and established their deposition to be about three billion years ago.

The samples were then sent to the Saskatchewan Research Council, whose experts found three small diamonds, less than a millimetre in diameter.

“My jaw hit the floor,” Pearson said in a media statement. “Normally people would take hundreds of kilograms, if not tonnes of samples, to try and find that many diamonds. We managed to find diamonds in 15 kilos of rock that we sampled with a sledgehammer on a surface outcrop.”

According to the scientist, the geologic implications of this finding are immense.

After identifying an inclusion in one of the diamond samples, Pearson’s team proposed the idea of the diamonds being derived from a small, deep but cool lithospheric root, which is the thickest part of the continental plate.

“This is something completely unexpected from what we think conditions were like three billion years ago on Earth,” Pearson said.

He said that stable diamonds exist only in cool parts of the mantle, so their discovery suggests there must have been very deep, perhaps 200-kilometre-thick cold roots beneath parts of the continent very early in Earth’s history.

In the researcher’s view, although there is always an argument about the relationship between inclusions and diamond deposits, in this case, there is no argument because they now know that the rocks were eroded onto the Earth’s surface.

“It tells us there’s an older source, a primary source of diamonds that must have been eroded to form this diamond-plus-gold deposit,” he said. “This also means mining diamonds in the area would not necessarily require very deep mines if more economic outcrops of these rocks can be found.”

BHP (ASX, LON, NYSE: BHP) has struck an eleventh hour deal with a coalition of Aboriginal land councils as shareholders pushing for a halt of all mining on sacred Indigenous sites were gearing up to vote on the matter at Wednesday’s annual general meeting.

The move follows increased pressure on miners to protect cultural landmarks after Rio Tinto (ASX, LON: RIO) blasted a 46,000-year-old sacred site in Western Australia to expand an iron ore mine.

The agreement with the First Nations Heritage Protection Alliance, a group of 20 Aboriginal and Torres Strait Island land councils formed after Rio’s criticized decision, seeks to identify areas where BHP and traditional owners can work together to improve standards and practices on cultural heritage.

The world’s No. 1 miner said it would to support changes to state and federal laws in Australia to make sure traditional owners give “free, prior and informed consent” before striking deals with mining companies.

It has also agreed to set up places to keep artifacts taken from heritage sites.

The president of BHP’s Australian minerals division, Edgar Basto, said he acknowledged the trust traditional owners and the First Nations Heritage Protection Alliance have put in the company.

“I look forward to our continuing partnership to deliver the commitments we have made together and our shared objectives for mutual benefit,” he said in the statement.

Chairman intervention

The Australasian Centre for Corporate Responsibility (ACCR), which wanted BHP to “immediately” halt activities that could “disturb, destroy or desecrate” Aboriginal heritage sites, said it would withdraw its proposed related resolution from Wednesday’s general meeting.

ACCR executive director Brynn O’Brien said the agreement was struck only “at the 11th hour” after BHP chairman, Ken MacKenzie, became directly involved in negotiations with Aboriginal leadership.

BHP is currently reviewing expansion plans for its South Flank iron ore project in Western Australia, which would have destroyed dozens of Aboriginal sites.

It has also clarified that Aboriginal owners are free to comment on the management of their cultural heritage, and is reviewing clauses around consent in its agreements.

Gaia Metals has released the second batch of sample results from the initial surface exploration program at its wholly owned Freeman Creek gold project in Idaho. According to the release, the latest assays “confirm prospective target areas at both Gold Dyke and Carmen Creek that are much larger than previously recognized.”

Sample highlights from the Gold Dyke target include 1.89 g/t gold and 0.6 g/t silver. This target area features an 800 by 700-metre gold-in-soil geochemical anomaly, with additional potential to the east and south. In addition, a sample from the eastern part of the Gold Dyke target returned 2.06 grams gold, 23.1 grams silver and 0.56% copper.

At Carmen Creek, there are multiple parallel veins with high precious metals values over 1.2 km of strike. New sample assays include 25.5 g/t gold, 159 g/t silver and 9.75% copper; and 7.08 g/t gold, 59.5 g/t silver and 1.53% copper from its eastern limit. The western part of the trend returned a sample assaying 2.02 g/t gold, 31.8 g/t silver and 0.76% copper.

This year’s prospecting program at Carmen Creek has defined a trend that remains open, with potential for a ‘stacked’ system of veins, which could potentially merge into a larger system at depth.

“Our phase I surface exploration has exceeded our expectations. At both, Gold Dyke and Carmen Creek, we have greatly expanded the areas of significant previous metal mineralization,” Adrian Lamoureux, Gaia Metals’ president, CEO and director, said in a release. “Several new showings highlight the considerable potential for further discovery on the property. We intend to aggressively advance the exploration at both Gold Dyke and Carmen Creek through the drill bit and continued surface work, to build value for our shareholders through discovery.”

Follow-up diamond drilling is planned for later this year.

The 6-sq.-km Freeman Creek property is 15 km northeast of Salmon, in Lemhi County. The area has a longstanding history of mining and exploration, with a high-sulphidation mineral deposit exploration target at Freeman Creek.

(This article first appeared in the Canadian Mining Journal)

Gold miner Kirkland Lake Gold reported Q3 gold production of 339,584 oz., a 3% increase over the 329,770 oz. generated in the prior quarter. The Detour Lake and Fosterville mines led this output, producing 140,067 oz. and 161,489 oz. in the period, respectively.

With 331,811 oz. of gold sales, at an average realized price of $1,907 per oz., the producer closed out the quarter with $848 million in cash, a 58% increase during the reporting period. In addition to the gold sales, Kirkland Lake’s financial position was positively impacted by a $109.1-million sale of 32.6 million shares in Osisko Mining and a $75-million payment from Newmont, received as part of a strategic alliance agreement on properties around Timmins in Ontario.

With this strong bottom-line performance, Kirkland Lake is also growing its quarterly dividend by 50%, to $0.1875 a share, which will come into effect with the fourth quarter dividend payout. The miner returned $141.9 million in cash to shareholders over the course of the third quarter, with $107.4 million used to repurchase 2.2 million shares, and $34.5 million used for a July dividend.

With 1 million oz. of gold churned out in the first three quarters of the year, Kirkland Lake expects to meet its updated (revised in June, following covid-19 impacts) production guidance of 1.35 million oz. to 1.4 million oz.

The Holt complex in Ontario, part of the strategic alliance agreement signed with Newmont in August, was designated as a non-core asset in February and operations were suspended in April.

“We continued to generate solid results in Q3 2020 and have entered the final quarter of (the) year well positioned to achieve our full-year 2020 production guidance,” Tony Makuch, the company’s president and CEO, said in a release.

Makuch added that Detour Lake, led the company’s year-on-year production growth. Fosterville also posted strong performance, as recent investments into ventilation and paste fill allowed the company to increase mining rates and utilize spare capacity within the Fosterville mill. Output from Macassa, which produced 38,028 oz., was affected by factors related both to covid-19 related protocols, as well as due to reduced equipment availability, from high temperatures in the mine, and by unplanned mill downtime.

According to Makuch, Macassa is already producing higher-grade ore, with expected improved results going forward. However, Kirkland Lake expects this asset to miss its 2020 production guidance of 210,000 oz. to 220,000 oz. The company plans to provide updated guidance for each operation with its full third quarter financial and operating results, which will be issued on Nov. 5.

(This article first appeared in the Canadian Mining Journal)

The Asia mining landscape has faced a challenging outlook in 2020 with the covid-19 pandemic casting a shadow on mineral production growth as operations slow and metal prices disappointed, but Fitch Solutions says in its latest industry report it expects the worst to be over.

The analyst’s 2021 mineral production outlook for most countries in Asia show recovery compared to 2020, and in the long term, Fitch says Asia will continue to benefit from the availability of high-grade resources and low labour costs, although key countries will grapple with policy uncertainty, resource nationalism and environmental protection.

While in 2020, most miners have focused on operational safety and the health of their employees through minimising risks of covid-19 spread in their mines, Fitch believes miners will once again focus on improving efficiency and cutting costs through technological integration once the pandemic clears in late 2021.

Fitch’s outlook for Australian mineral production remains positive in 2021 as was in 2020 as major miners including BHP, Rio Tinto and Fortescue Metals Group faced no disruption as a result of covid-19. In Western Australia, mining employees have been exempted from travel restrictions so as to ensure smooth operations for miners.

Australia will spearhead the global as well as Asian miners’ race to utilise technology in order to cut costs, enhance efficiency and increase mine safety due to the country’s availability of strong network connectivity, power, highly skilled labour and government support, Fitch predicts.

The mining landscape is in the age of technological disruption today, where players are at the crossroads between a traditional past and a transformative future that is sustainable. Starting from cloud computing to new sensors, drones to ever more automation, and now the rise of machine learning and artificial intelligence, state-of-the-art mines have all the latest technological innovations embedded in their operations.

Read the full report here.

Taseko Mines Limited (TSX:TKO; NYSE:TGB) is being recognized for its ongoing mine reclamation work at its Gibraltar mine in British Columbia.

The Gibraltar copper-molybdenum mine, located halfway between Quesnel and Williams Lake, has been operating for 15 years and still has a couple of decades of mining left in it.

But as the company points out, reclamation isn’t something that only starts after a mine is decommissioned. The company has already undertaken replanting of an area where waste rock was dumped over the years.

“It’s a part of mine operations,” said Taseko president Stuart McDonald. “It doesn’t only happen at closure. We’ve got, in the last six years, 107 hectares of land …reclaimed through replanting, encouraging regrowth.”

Most of that reclamation has been in the form of replanting over large piles of waste rock. Much of the replanting work has been done in cooperation with local First Nations, notably the Xat’sull.

“They actually do a lot of the reclamation in terms of the tree-planting and ground cover replacement,” McDonald said.

Taseko has also been working with First Nations on a Fraser River salmon sampling project, and employing graduate students from Simon Fraser University and BC Institute of Technology (BCIT) to do research on encouraging natural regrowth of ground cover.

Taseko’s work on reclamation was recently recognized by the BC Technical and Research Committee on Reclamation with the Jake McDonald award for Metal Mine Reclamation.

(This article first appeared in Business in Vancouver)

Hudbay Minerals (TSX, NYSE: HBM) has temporarily suspended production at its 777 mine in Flin Flon, Manitoba, due to an incident that took place last Friday.

The incident occurred during routine maintenance of the hoist rope and skip, which is the bucket used to hoist ore from underground. The hoist rope detached from the skip, the company said, causing the skip to fall to the bottom of the shaft.

There were no injuries and all underground personnel were safely evacuated from the mine using the secondary ramp access, it added.

An inspection of the damage to the shaft is underway and it is expected to take several weeks to fully assess the damage and the remedial work needed.

In the meantime, Hudbay has notified its insurers and has implemented its business continuity plans to mitigate potential impacts to production from the Manitoba business unit. This includes reassigning equipment and personnel to the Lalor mine in Snow Lake and continuing to operate the zinc plant by processing available zinc concentrate inventory and optimizing the production of zinc concentrate from the Snow Lake operations.

“This was an unfortunate event, but we are thankful there were no injuries and that our safety protocols were closely followed. We have an exceptional team in Manitoba who have proven their ability to overcome challenging situations time and time again, and I am confident they will remedy this challenging situation safely and efficiently,” Hudbay president and CEO Peter Kukielski said in a press release.

The 777 mine (copper, zinc, gold, silver) in Flin Flon is currently approaching the end of its mine life after 15 years in operation, with final production anticipated in 2022.

A new report by IDTechEx states that as the demand for nickel from electric vehicle batteries is expected to increase ten-fold by 2030 compared to 2019, concerns around the environmentally-conscious supply of the metal are also on the rise.

According to the market analyst, one of the main problems surrounding nickel mining is that ores normally contain only a very small percentage of useful Ni, resulting in a large amount of waste material.

The disposing of this waste represents a major concern for miners, carmakers and environmentalists.

“Recently it has been announced that two nickel mining companies in Indonesia are planning to use deep-sea disposal for the raw material waste into the Coral Triangle as they ramp up operations,” the report states.

“Less than 20 nickel mines worldwide use deep-sea disposal, but these new facilities would account for millions of tonnes of waste material each year. This method is typically used because it is cheaper than the alternatives of dam storage or converting the raw materials to useful products.”

Indonesia accounts for the largest supply of nickel. In 2019, the country banned exports of raw nickel ore to boost their domestic processing industry. The island country also has the most planned developments for increasing nickel production and is set to dominate the supply chain. 

On the other side of the spectrum, back in 2017, the Philippines government suspended nearly half of its nickel mines citing environmental concerns.

Almost equally concerned are many automakers, IDTechex’s report says. They worry that negative actions in this realm may undermine the environmentally friendly message of the electric vehicle. 

“Most, including the likes of PSA, VW and Tesla, have pledged to reduce the environmental impact of their batteries. This becomes challenging as the choice of suppliers that can meet the demands of these large automotive companies is limited,” the report reads.

“In the future, nickel producers will have to prove that their practices are environmentally friendly if they want to sell into the European and American markets, where the automotive industry is making this a priority.”

The need for nickel in both of these regions is growing because of consumer demand for EVs and because, in their quest to improve the energy density further and reduce the dependence on cobalt, automakers are moving towards higher nickel chemistries such as lithium-nickel-manganese-cobalt-oxide 622 or 811 over the previous 111 and 52.

Nickel is the most expensive material in electric vehicle batteries after cobalt and is also one of the most highly used outside of the battery industry. 

A Canadian company has developed a new, environmentally friendlier mechanism to produce potash without generating salt tailings and requiring no surface brine ponds.

According to Saskatoon-based Gensource Potash (TSX-V: GSP), the absence of tailings eliminates decommissioning risks, while not having ponds removes the single largest negative environmental impact of conventional potash mining.

The extraction method that Gensource has created injects a hot salt (NaCl) brine into horizontal caverns in the ore body, which selectively dissolves potash, (KCl) leaving salt in place. The KCI-rich brine is then processed (KCI ‘drops out’ through cooling crystallization) and the NaCl brine is reheated and re-circulated back to the cavern to repeat the process.

The process is carried out by a series of independent production facilities that are 1/10th the size of a traditional potash project and can produce between 250,000 – 300,000 t/year of the fertilizer. 

Set to be installed at the Tugaske project, which is within the company’s Vanguard Area in south-central Saskatchewan, the modules are said to use 75% less water per tonne of potash than conventional solution mining methods. They also have the ability to use brackish water sources, which reduces freshwater usage even further.

Gensource has also reported that power at Tugaske is self-generated using natural gas, not coal, which avoids up to 24,500 tonnes/year CO2e of emissions.

The Tugaske greenfield project recently received a development approval permit from the Rural Municipality of Huron, where it is located. The Saskatchewan Ministry of Environment, on the other hand, ruled in 2018 that the project should be considered ‘not a development’ because it doesn’t trigger environmental impact assessment due to its ‘green’ attributes.

At present, Gensource Potash is waiting for its senior lenders, KfW and Société Général, to approve financing. The firm is also waiting to have project financing coverage approved through Euler Hermes.

Once operations start, Gensource Potash has committed to selling, for at least the next 10 years, 100% of the annual production from Tugaske to Helm Fertilizers, a US-based subsidiary of Helm AG, who will market it directly to its customers using its own infrastructure.

Researchers at the University of Exeter and the Australian National University published a study that may help pinpoint new, untapped neodymium and dysprosium deposits.

In the paper – which appeared in the journal Science Advances – the scientists say they conducted a series of experiments that showed that sodium and potassium – rather than chlorine or fluorine as previously thought – were the key ingredients for making these rare earth elements soluble.

According to the experts, this is crucial as it determines whether they crystalize – making them fit for extraction – or stay dissolved in fluids.

In detail, the team led by Michael Anenburg simulated the crystallization of molten carbonate magma to find out which elements would be concentrated in the hot waters leftover from the crystallization process.

The trial showed that sodium and potassium make the rare earths soluble in solution. Without sodium and potassium, rare earth minerals precipitate in the carbonatite itself.  With sodium, intermediate minerals like burbankite form and are then replaced. With potassium, dysprosium is more soluble than neodymium and carried out to the surrounding rocks.

“My tiny experimental capsules revealed minerals that nature typically hides from us. It was a surprise how well they explain what we see in natural rocks and ore deposits,” Anenburg said in a media statement.

For co-author Frances Wall, the experiment turned out to be an elegant solution that helps better understand where ‘heavy’ rare earths like dysprosium and ‘light’ rare earths like neodymium’ may be concentrated in and around carbonatite intrusions. 

“We were always looking for evidence of chloride-bearing solutions but failing to find it. These results give us new ideas,” Wall said.

Neodymium and dysprosium are essential for the production of digital devices and clean energy infrastructure such as wind turbines and electric car motors.

Revenue at British Columbia’s largest mines took a negative turn, according to data collected on BIV’s Biggest Mines in B.C. list.

For the first time in at least five years, average revenue fell at the largest mines in the province. On average, revenue tumbled 12.4% to $616.6 million in 2019 from its peak of $704.1 million in 2018.

The average revenue reached its height in 2018 after three consecutive years of growth, a total increase of 42% from $496 million in 2015. Last year’s decline erased nearly two years of growth and pushed average revenue growth down to just 0.6% growth since 2016.

Despite the recent downturn, however, average revenue at the largest mines remained ahead of 2015 by 24.3%.

At the same time, the median revenue for B.C.’s biggest mines flatlined at roughly $400 million for the past three years after peaking at $496.5 million in 2016. This suggests that smaller mines lower on the list have not experienced growth over the period, while larger mines higher on the list have.

All but one of the top five mines in the province followed the trend of the average, experiencing varying levels of growth from 2015 to 2018 before falling in 2019.

No. 4 Highland Valley Copper, near Logan Lake, had its revenue sink to a low of $733 million in 2017 from $999 million in 2015. But the mine, owned by Teck Resources (TSX:TECK.B), has since recovered and in 2019 it boasted a five-year revenue high of $1 billion. Highland Valley Copper was the largest mine to experience revenue growth over the past year and was one of only five companies on the list to do so.

No. 15 Silvertip, near the Yukon border, had the largest one-year revenue growth on the list, increasing 248% to $56.6 million in 2019 from $16.3 million in 2018. Silvertip’s results helped boost the average one-year growth on the list to 7.6% despite most companies experiencing revenue declines. When Silvertip is excluded, the average revenue fell at a rate of 8.4%. The median revenue declined by 9% and was more reflective of the list’s performance.

No. 3 Greenhills, near Elkford, had the largest five-year revenue growth on the list, increasing 520.8% to $1.33 billion in 2019 from $213.4 million in 2015. But, like most on the list, the mine’s revenue declined by 9.3% in 2019 from $1.46 billion in 2018.

(This article first appeared in Business in Vancouver)

Vale (NYSE: VALE) has teamed up with China’s Zhoushan Port Company to build and operate Project West III in the port of Shulanghu, according to a securities filing on Friday, in a strategic logistics alliance to serve the world’s largest iron-ore importer.

Vale said it will have 50% of the JV, adding the port project expansion will demand multi-annual investments of about $624 million. Both partners plan to obtain financing for up to 65% of the project, the filing said.

The West III Project consists of expanding the facilities at the Shulanghu Port, developing a storage yard and loading berths with an additional capacity of 20-millions of metric tones per year.

By participating in the project, Vale said it will guarantee a total port capacity of 40-million tonnes a year in Shulanghu, which will help the company optimize costs in its value chain, according to the filing.

Last month, Vale began producing high-grade iron ore fines for pelletizing at its new three-million-tonnes-a-year grinding hub at Shulanghu Ore Transfer Terminal.

The unit, a partnership with Ningbo Zhoushan Port Group, is generating a completely new product, known as GF88. The high-grade ground iron ore fine uses the company’s flagship Carajás Fines as raw material and will partially feed the growing demand for pellets in China’s steel sector.

GF88, Vale said, provides an environmentally-friendly solution for pellet production. It also supports steelmaking clients with the challenge of reducing their carbon footprint, part of the company’s scope 3 emissions plan. 

(With files from Reuters)

Mining — more than most industries — relies heavily on infrastructure and institutions at locations where operations are based.

The ongoing political chaos in Kyrgyzstan, which saw thousands take to the streets in protest of the nation’s parliamentary elections that kept President Sooronbai Jeenbekov in power, underscores the type of risks posed to those invested in the regions and highlights the importance of mining jurisdictions.

This is Kyrgyzstan’s third political revolt since 2005, so the political risk in such jurisdiction would likely remain when or if the current situation is resolved.

Attack on Kyrgyz mining

Antagonism against mining operations is often a reflection of weakness in a country’s institutions, says Camilla Ogunbiyi, principal analyst, Financial Sector Risk and Forecasting at Verisk Maplecroft.

As seen in the aftermath of the Kyrgyz election, the government’s status was quickly undermined with the annulment of election results and state of emergency declared. The fragility in governance also endangers the safety of foreign investors’ assets, as it aggravates public concerns surrounding pollution, corruption and resource nationalism, Ogunbiyi asserts.

In Kyrgyzstan, the political upheaval also became an opportunity for the ill-disposed to direct their anger towards local mining operators, attacking several sites over the past few days. This included an attack on the office of Centerra Gold (TSX: CG), owner of the Kumtor mine, the nation’s largest gold operation.

The Kumtor gold mine, meanwhile, exemplifies the risk of resource nationalism. The country’s largest gold mine, largest employer and taxpayer, accounting for up to 7% of GDP, has been the subject to both renegotiations and protracted legal battles, Ogunbiyi says.

As Kyrgyzstan’s largest employer and taxpayer, accounting for up to 10% of its GDP in 2019, the Kumtor mine has been the subject of protracted legal battles and exemplifies the risk of resource nationalism concerns faced by mine operators.

In the same week, Kaz Minerals also suspended operations at the Bozymchak copper and gold mine due to the Kyrgyz political turmoil.

According to Verisk Maplecroft, the Central Asian nation currently ranks as the 54th riskiest of 198 countries scored in its Corruption Index.

Without a clear break with political practices and leaders of the past, corruption is likely to remain a driver of anti-government sentiment and weak governance, the firm says.

Violence in Africa

When it comes to notoriously high-risk jurisdictions for miners, the Democratic Republic of Congo often comes to mind.

In June, a violent attack on Société Minière de Bisunzu’s (SMB) coltan mine claimed three amid an increase of attacks on mining operations in the country’s mineral-rich eastern region.

This was just one of many violent occurrences this year in what is one of the world’s top sources for cobalt, tin and tantalum.

The political meltdown provides Kyrgyzstan an opportunity to start anew and establish stronger, less corrupt political and governance institutions, which would enable foreign investment and economic development, Ogunbiyi asserts.

The switch to green energy and electric vehicles will see demand for battery metals and copper boom over the coming decades. 

But at the moment, the pipeline of projects to meet that demand appears wholly inadequate. 

MINING.COM’s sister company MiningIntelligence studied the 65 global properties with exposure to copper, cobalt and nickel globally that had feasibility studies completed in the last five years. 

In aggregate, the proven and probable reserves of copper in terms of contained tonnes of metal at the 65 projects totalled 21.9 million. 

That’s only equal to a single year of global production of the bellwether metal and of course not 100% of these reserves will be extracted.

In terms of cobalt, reserves total 224.7 kilotonnes of contained cobalt at these projects, which is more than the estimated current annual production of around 130 kilotonnes.

However, projections are for annual demand for cobalt growing to more than 200 kilotonnes per year as soon as 2025 as the portable electronics and electric vehicle markets expand rapidly.   

The move to nickel rich chemistries for electric vehicle batteries and a robust stainless steel industry – nickel’s number one source of demand – gives the metal a similar demand curve to cobalt.

With a modest 2.65 million tonnes of nickel outlined in the 65 feasibility studies analyzed by MiningIntelligence, exploration for nickel – and copper and cobalt – would have to step up a gear.

Click here for free Excel downloads from a database of over 37,000 projects, 16,000 companies and 2 million source documents by Miningintelligence.

This week’s top stories:

• Gold price rally lifts Top 50 mining stocks above $1 trillion for first time – Read more
• US grabs stake in battery metals miner to fight Chinese control – Read more
• Barrick CEO calls for consolidation and warns of reserve crisis – Read more
• UK Gov’t temporarily halts coal mine approval – Read more
• Tesla in talks with BHP over nickel supply pact – Read more

Management moves announced this week include:

Daniel Dominguez is now the CFO of Compania de Minas Buenaventura, Peru’s largest publicly-traded precious metals mining company.

Bassam Moubarak is now the CFO of Freeman Gold. Paul Matysek has been named a strategic advisor. Moubarak has also been appointed to board.

Lindsay Craig has been appointed exploration manager for Gold Bull Resources.

John Wenger is now the CFO of Inflection Resources.

Mirasol Resources’ chair, Patrick Evans, has been appointed interim CEO following Norm Pitcher’s departure, pending the appointment of a successor,

Sam Lee has been named president and CEO of Northisle Copper and Gold, following John McClintock’s resignation. McClintock will continue with the company as VP exploration.

Kenneth Balleweg is now the VP exploration for Pucara Gold.

Vizsla Resources has appointed Veljko Brcic to the role of VP of corporate development.

Board moves include:

David McCue has stepped down from the board of Cyon Exploration.

Jonathan Challis has joined the board of District Metals, replacing Anna Ladd-Kruger, who will continue as a strategic advisor.

Melinda Lee and Robert Shaw have joined the board of Fortune Bay.

Monica De Greiff has stepped down from the board of Gran Colombia Gold. The company does not intend to fill the vacancy at this time.

Melinda Hsu is now on the board of Jaxon Mining.

Dana Prince has resigned from the board of Mirasol Resources.

Jeet Basi has been named a director of Norra Metals.

Nick Rowley is now a director of Oro X Mining, replacing Jeff Dare. Paul Matysek is now lead advisor to the company.

(This article first appeared in the Canadian Mining Journal)

Agnico Eagle Mines is investing C$6.2 million ($4.7 million) into Maple Gold as the two companies announced they’ve signed an agreement to consolidate two adjacent land packages in Quebec into a 50-50 joint venture.

The agreement, a binding term sheet, will combine Maple’s 357-sq.-km Douay gold project in northern Quebec with Agnico’s adjacent 39-sq.-km past-producing Joutel project into a consolidated property package covering approximately 400 sq. km.

The term sheet envisions a 50-50 joint venture, with Agnico and Maple agreeing to negotiate towards and enter into a definitive joint venture agreement within three months.

The current agreement calls for Agnico to fund C$18 million in exploration expenses over four years and for the two companies to jointly fund an additional C$500,000 of exploration work on volcanogenic massive sulphide (VMS) targets in the western portion of the Douay project. Each party would also receive a 2% net smelter return (NSR) royalty on the property that they contribute to the JV, which could be bought back for $40 million each.

According to Maple’s release, “the strategic partnership brings together two groups with a common focus on exploration, discovery and development in the Abitibi greenstone belt.”

The two groups plan to explore the grounds and expand areas of known mineralization. Agnico has agreed to support Maple in pursuing third-party financing for Maple’s share of the development phase of the JV.

“The strategic partnership with Agnico marks a transformational milestone for Maple Gold and supports the opportunity in front of us,” Matthew Hornor, Maple Gold’s president and CEO, said in a release. “Their involvement along with the Joutel contribution will create a highly prospective land package that has the potential to form an exciting new gold district in Quebec’s Abitibi gold belt.”

Hornor added that with this investment, Maple will have over C$12 million in cash, which “when combined with the $18 million in JV funding, results in a strong capital position to be directed at exploration, development and new corporate growth opportunities.”

Agnico’s C$6.2-million investment in Maple, a 25.8-million unit non-brokered private placement, is expected to give the gold producer a 12.84% stake in the junior on a non-diluted basis, up from 4.4% currently. Each unit is made up of one share and one warrant, with closing of the financing expected around Oct. 9.

The two Toronto-based companies have also agreed to enter into an investors’ rights agreement upon closing of the financing, which gives Agnico rights to participate in equity financings to maintain its pro-rata ownership in Maple, or to acquire up to a 19.9% stake in the junior, and the right to nominate one or two members to Maple’s board, depending on the size of the board.

Last year, Maple released an updated resource for Douay with total pit-constrained indicated resources of 8.6 million tonnes grading 1.52 g/t gold for a total of 422,000 oz. and a further 65.8 million inferred tonnes at 0.97 g/t gold totalling 2 million pit-constrained oz. The underground component includes 5.4 million inferred tonnes grading 1.75 g/t gold for a total of 307,000 oz.

Joutel closed down in 1992, after pouring its millionth ounce of gold in 1990.

Both Douay and Joutel host multiple mineralization styles.

(This article first appeared in the Canadian Mining Journal)

Australia’s Lucapa Diamond (ASX: LOM) is restarting operations at its Mothae mine in Lesotho, Africa, which had been halted since late March to help curb the spread of the coronavirus.

The Perth-based company said it plans to escalate operations at the mine to 75% capacity as some covid-19 restrictions remain in place.

Commercial production at Mothae, which the Perth-based company acquired in early 2017, began in January last year, with the opening of a new 1.1 million tonne-per-year plant that is progressively ramping up to its nameplate capacity.

It produced more than 30,000 carats in its first year of operations, including three diamonds of more than 100 carats each.

Lucapa has a 70% stake in the operation. The government of Lesotho owns the remaining 30%.

The mine is located only 5km from Gem Diamonds’ (LON:GEMD) Letšeng, the world’s highest dollar-per-carat kimberlite diamond mine.

The company also has a 40% stake in the prolific Lulo mine in Angola, where operations resumed partially in May.