Diamonds, metal prices and Yukon news

TMAC ready to rock at Hope Bay.. Doris is permitted while Madrid and Boston are in the mill.  They are ready to start this year… provided they can raise $175M with a feasibility study built around $1250/ounce gold.   From the comments there are at least two pissed-off locals. [Nunatsiaq Online]

Hope Bay Project

Hope Bay Project

So where does mining rank in the list of most dangerous jobs? Six out of 10, right behind sanitation workers.  [Mining.com]

Don't encourage him.

Don’t encourage him.

 

Sprott’s thoughts: Not all the Zombies are dead … some are just sick.   You want to find these and invest in them while they’re beat up.  [Mining.com]

No.. your stock is just sleeping.

No.. your stock is just sleeping.

 

Metal prices rising again! No wait… it’s just the buck sliding.  [WSJ]

USdollar

We were warned: Iron ore price rally turns into dead cat bounce.   [Mineweb]

Dead cat bounce

 

World Federation of Diamond Bourses meet for one of the most important assemblies of its kind ever held, in light of the issues facing the global diamond trade.”  Top items on the agenda…

  • tackle the shortage of industry financing and declining profitability – “undoubtedly the most pressing issues in the diamond industry”, asserted WFDB president Ernie Blom. and…
  • He added that the number and scale of undisclosed synthetic diamonds entering the global market was also of concern. “How large is this problem and is identification of such stones successful?,” he enquired.  [Mining Weekly]
Is it real?

Is it real?

You decide.

You decide.

 

Redstar starts drilling at Shumagin…  Expect some high grade assays from this past-producing Alaska epithermal deposit soon.  [Junior Mining Network]

In its heyday (the 1920's)

In its heyday (the 1920’s)

Carmax plans more drilling at Eaglehead near Dease Lake.   No word on how big a program yet.. [Junior Mining Network]

Boy – the lab must be backed up: Cantex releases soil sample results from last summer at Rackla and they’re not done yet.   Sounds like they’re planning more work in Yukon this summer. [Junior Mining Network]

Time to add some staff

Time to add some staff

 

Klondike Gold begins field work .   Ground magnetics and drone work to start. [Junior Mining Network]

Alexco announces new resources at Flame, Moth and Bermingham. Significant (37%) boost at Bermingham.  Plans 5000 m of drilling this year. [Junior Mining Network]

Radius turns itself into an investment company.  Last seen in the Sixty Mile – will be missed. [Stockwatch]

Goldbank raises $180K to keep working in Yukon  near Dawson. [Stockwatch]

 

Capstone, Rockhaven and Zombies

Sabina’s Back River project in Nunavut has been very quiet of late but recently Tommy Humphreys has started a drumbeat discussion on CEO chat.   He’s a water-carrier for the Howe Street crew and must have a piece coming up on Bruce McLeod.  With SBB’s feasibility study due out this quarter, he figures the stock will move up.  Yay!  It can’t get a whole lot lower… [CEO.ca / Stockwatch]

SBB

Capstone’s quarterly results are out; they lost $17M and here are three numbers we might keep in mind…. [Junior Mining Network]

  • Cozamin production cash costs:                 $1.51 / lb
  • Pinto production cash costs:                       $1.93 / lb
  • Minto production cash costs:                      $2.58 / lb

Capstone

REE market news…   Companies are finding more value tinkering with flow sheets and looking at new recovery methods rather than exploring,  apropos of which is UCore’s announcement yesterday of Sm and Gd recoveries from the Bokan Mountain (Alaska) bulk sample.  Like Ivory Snow – better than 99% pure.   With 17 REE’s in the periodic table, we can probably expect 7 more press releases from UCU over the next few weeks.  [Mining.com / UCore]

town crier

The slump continues…   global mining M&A activity down 18% year-on-year in Q1.  [Mining Weekly]

Funk

Zombie watch:  Good article by the Resource Maven on what ails the juniors. Here’s some advice most could use….  [Resource Maven]

To win investors back everyone has to step up their game: underpromise and overdeliver, operate on conservative assumptions, and employ shareholder capital very carefully.

Mummy

Rockhaven adds some financial firepower to its board. It’s time to start thinking about raising money to go mining.   There’s been some notice of this on Howe St. but generally RK hasn’t moved much.  [Junior Mining Network]

RK

Financings closed:   Tyhee (working at the Discovery Mine north of Yellowknife) closes $250K and   Kivalliq  (Lac Cinquante, Nunavut) closes $2.7M.   Probably all of KIV’s money is going to SK this year.  Tyhee’s under a cease trade order pending delivery of financial statements.  [Canadian Financing Bulletin]

Mongolia, metals and money raising

SNL says things are improving in exploration because of increased resource announcements; less drilling & financing however. [Mining.com]

SNL

Kip Keen [Mineweb] is taking downers….  a couple of pessimistic takes on recent price up-ticks:

Hold the nickel price elation.   The market’s essentially in balance and the supply disruption at BHP’s Cerro Matsoso Mine in Columbia gave the market a twitch.

Iron ore boomlet is likely a bust.  Long term, the Chinese demand will cool.   The current price excitement is driven by Vale & Rio cutbacks.

Iron ore

 

De Beers plays hardball. In most markets, buyers are generally in the driver’s seat when prices soften.  Not in the world of diamonds where sightholders lose their rights if they don’t buy enough stuff.  Recently, buyers have lost access to cheap credit following diamond bank closures in India and Antwerp and 40% of goods were rejected during the De Beers March sale.  With classic South African delicacy, De Beers is expected to double down at their auction in May, forcing $700M worth of diamonds on the market.  [Rough & polished]

I said drink

Lots of good news at Kensington While attention is focused on Jualin (triple the grade of the Kensington Main deposit), they are making money in the interim with the Raven Zone.   They expect it will cost $30M to put Jualin into production and are looking at a 70% rate of return. [Petroleum News of Alaska]

happy prospector

 

A new Canadian stock exchange with a different business model. Aequitas Innovations plans to make a market for private company shares and create a dark pool for listed companies with speed bumps to get rid of high frequency traders. [Stockhouse]  I had hopes until I read this…

However, Schmitt made it clear that Aequitas will not be a haven for issuers in the penny mining and marijuana sectors.  Rather he said listed companies will be drawn from the senior corporate ranks.

Nothing to see here

 

Mining executives seem to die in Mongolia when they visit to fight expropriations.  After Jim Doak’s death, INK notes that two points make a trend.   As icing on the cake in  the wake of Mr. Doak’s sudden passing, Mongolia signals it will not pay the $100M arbitration award.   [Republic of Mining]

Don't mess with me

Don’t mess with me

Whoops – we got it back.    Kiska announces termination of the Whistler Project sale to Alternative Earth Resources.  Says it “has reduced the holding costs for the Whistler Project to a manageable level, allowing the Company to maintain the asset as it continues to seek joint venture or other arrangements on this prospective advanced stage exploration project.”
[Junior Mining Network]

boomerang

After announcing a $1.7M financing on March 17,  Arctic Star increases its financing to $1.85M.  Proceeds to be used for diamond exploration in Nunavut and NWT.  [Stockwatch]

 

Lupin, metal prices and MIP

NWT Mining Incentive Program (MIP) applications closed for the season…. [GNWT]

9 prospectors applied

12 companies applied

total of $1.06M requested;  the budget is $400K for this year however.

Prospectors trail

No improvement in the rough diamond market this week….  [Rough & Polished]

 Following an announcement earlier this month by Debswana that it would cut production in response to weak market conditions, De Beers this past week cut its production target to 30 million – 32 million carats this year compared with an earlier target of 34 million carats. Meanwhile, traders continued to report soft trading conditions, marked by long extended credit terms.  All eyes are on De Beers’ next Sight in the beginning of May.

 Big news for Nunavut!.. Kaizen mobilizes fuel and “camp supplies” to Coppermine….  still need permits.   [Junior Mining Network]

WoohooHappy metal news to start the week…..

metals

China is burning through metals although:

 China is the leader in mining gold, zinc, lead, molybdenum, iron ore, coal, tin, tungsten, rare earths, graphite, vanadium, antimony and phosphate, and holds second place in mine production of copper, silver, cobalt, bauxite/alumina and manganese. The only two main produced commodities of which China is out of the top 10 are gem diamonds and chromium.

 Iron ore price “soars” again – new bull market beginning!  .. don’t bet on it.  The real driver: BHP decides to cut back production.  [Mining.com / Mineweb / Infomine]

Nobull

WPC is going to become Lupin Gold.   A hilarious must-read for anyone who knows Lupin.  [Northern Miner].

And here's how we'll finance this

And here’s how we’ll finance this

 

Teslin River Resources (Tay-LP / Yukon) gets out of mining;  buys Truckphone  [Junior Mining Network]

bites the dust

Stockwatch on Kennady Diamonds….

Patrick Evans’s Kennady Diamonds Inc. (KDI) up eight cents to $4.81 on 41,000 shares after it revealed promotable diamond counts from its Kelvin kimberlite complex, 10 kilometres northeast of Gahcho Kue in the Northwest Territories. A 1.83-tonne batch of rock from Kelvin South produced 128 diamonds larger than a 0.85-millimetre sieve through caustic fusion. Those gems weighed 6.68 carats, an average of 3.64 carats per tonne. That is significantly higher than the 2.6 carats per tonne that Kennady Diamonds averaged in mini-bulk tests elsewhere at Kelvin, although the company did produce comparable caustic fusion grades across Kelvin and the nearby Faraday kimberlite. The Kennady South diamonds also had a promotable size distribution pattern: the largest stone weighed 1.36 carats and three others clustered near the one-half-carat mark. All four stones were classified as off-white gems. Kennady got an even better result from its Kelvin sheet, a Snap Lake-like kimberlite associated with the Kelvin pipe. A 47.6-kilogram sample produced six gems larger than a 0.85-millimetre sieve, supporting a grade of 5.95 carats per tonne. The largest gem, a 0.12-carat octahedron, was classified as white.

Mr. Evans, CEO, says he is “very pleased with these excellent diamond recovery results,” but his ultimate satisfaction may be contingent on the mini-bulk test that Kennady Diamonds extracted along the oblong Kelvin kimberlite this spring. The company had wanted 500 tonnes, but had to be content with just 436 tonnes as the drill rigs had to be shipped south before the winter road melted away. Mr. Evans, often Howe Street’s master of understatement, expects the estimated 10 million to 13 million tonnes of Kelvin and Faraday kimberlite will average between two and 2.5 carats per tonne. Kennady’s Kelvin mini-bulk test has a good shot at topping that grade, and with a bit of luck its diamond valuation could top the $118 (U.S.) per tonne achieved at Gahcho Kue. Further, Kennady’s delineation drilling is producing significant kimberlite intersections at Faraday-2 as the company moves its drill rig northwestward, and its tonnage is growing with each turn of the drill.

 

Green news across the North….

Dettah Dene worried about caribou at Ekati’s Jay Pipe.  Big concerns about caribou – truck interactions, etc.    Perhaps many of these problems will be settled with a renegotiated IBA.

caribou

Ketza River Mine now YTG’s problem.    Veris Gold, operator of Jerritt Canyon in Nevada is bankrupt.   They purchased Ketza River back in 2008 (as Yukon-Nevada Gold Corp.) and have done a bit of exploration on the property since then.   The YCS’s Lewis Rifkind has weighed in on this as another case of bad mining company ripping off the Feds.  This isn’t what happened here – Veris actually saved the Feds millions by taking over and maintaining the property for 8 years – but it makes good press.   There is truth in his argument however that companies should post adequate security before starting operations not on a pay-as-you-go basis.  Unfortunately, this won’t solve the underlying cause of this problem.

The real issue is that most deposits developed in the Yukon are marginal.   They are only intermittently profitable during price peaks.   They are teasers.  You won’t attract operators with deep pockets to run such deposits; they will be passed about among juniors with more hope than cash, each thinking they can do what the previous operator(s) failed to do; run at a profit on a sustained basis.  They will spend a lot of time on care and maintenance between owners.  If such a deposit has a long life – like Faro – the original bonds may no longer be enough to pay for reclamation and require topping up.   In the nice neat world of Government and environmental groups, a mine goes into production, finishes up, reclaims and walks away.   It happened very successfully at Brewery Creek and Sa Dene Hes (which is why you never hear about them).

Government and society at large has to ask itself whether these marginal producers are worth the cost.   If the only deposits that are allowed to go into production are really high grade and the only producers that are allowed to run them are the Tecks or Barricks of this world, there will be a lot less mining in the Yukon in years to come.   If we are willing to allow less well-heeled producers to take a whack at marginal mines, there will likely be a lot more overall benefit in terms of taxes and economic activity, even with the cost of maintaining these operations between cycles.  Our risk-averse, security-loving Yukon electorate may not think so however.  They want an environmentally friendly, extremely profitable, small mining industry run by large, well-financed mining companies.    Good luck with that.

Waiting for the next owner...

Waiting for the next owner…

Chief Marilyn Baptiste wins Goldman Prize for shutting down Taseko’s Prosperity Mine.  The $175K prize is awarded by the Goldman family (no relation to the Vampire Squid) of San Francisco and is said to be the largest environmental activist prize in the world. [thanks to HB for this].

goldman

EPA tries to portray a kinder-gentler side following last years’ take down of Alaska placer miners.  … and in a suitably green publication [Energy & Environment Publishing].   As you may recall, this was a joint BLM / EPA operation to swoop down and catch placer miners in the act near Chicken.    Here are the heart warming photos they posted….

The A-Team on the ramp

The A-Team on the ramp

Tailgate safety meeting

Tailgate safety meeting

Happy Federale

Happy Federale

Admittedly it doesn’t look like Waco…. but these are the best of their photos.    Here’s the Fox News take on it.

Water cops

and ours…

Chicken

 

A takeover, collapsing tin / REE prices, diamonds and volcanoes

Mega Precious Metals to be acquired by Yamana Gold  for mostly shares. Still – MGP was trading at $0.04 yesterday and the offer price is $0.10. Expect a good day for junior golds as everyone looks around for the next target.   Mega has property in Nunavut but is likely a target because of Monument in Ontario. In the background are Ian and Ewan Downey who founded Wolfden, active in Nunavut about 10 years ago. [RTN News]

Tin prices swinging wildly on low volume after setting a new low. The rebound likely triggered by a major Indonesian tin smelter slashing output for May in response. [Mineweb / Mining Weekly]

No bottom yet...

No bottom yet…

China scraps REE export tariff to comply with WTO ruling. Lynas (#2 REE producer in the Free World after Molycorp) whistles in the dark: says it will boost demand. But in the short term, prices will likely…. [China Mining / Mining.com]

 driving off a cliff

No big surprise here, but Canada still relies on junior miners to find its ore. Nice piece by Frank Holmes in Stockhouse. Here’s the takeaway….

juniors

Dundee touts North Arrow’s Qilalugaq… have spreadsheet, will travel. Looks like the big money is taking notice; let’s hope the yellow diamonds story pans out. [CEO.ca]

 NAR rocket

 Stockwatch thinks NovaCopper will use Sunward’s cash in Alaska and shelve Columbia:

Philip O’Neill’s Sunward Resources Ltd. (SWD) rose 6.5 cents to 16 cents on 5.91 million shares. The company has received a $25-million all-share takeover bid from Thomas Kaplan’s NovaCopper Corp. (NCQ: $0.68). (Mr. Kaplan’s New York investment company, Electrum Holdings, is one of Sunward’s largest shareholders with 25.9 million shares, or 18 per cent of the company.) NovaCopper is after Sunward’s $21-million in working capital, which when combined with NovaCopper’s own $3.7-million, gives the company more than enough for its two copper projects in Alaska. NovaCopper would like to spend $10-million on feasibility work this summer at its most-advanced project, Arctic. It has no immediate plans for Sunward’s Titribi gold deposit in Colombia. There are 11 million ounces of gold, indicated and inferred, at Titribi, but they grade a low 0.5 gram per tonne, which means the project will need higher gold prices. For his services to Sunward, president O’Neill received $250,000 in salary last year, down from $300,000 two years earlier. He volunteered for the pay cut because of the market downturn. Under a change of control, he is entitled to a modest payment of $42,000, two months salary. He owns 9.28 million shares of Sunward, for which would receive $1.89-million.

 And Stockwatch on Margaret Lake Diamonds….

Margaret Lake is west of that {Gahcho Kue} trend and it was sufficiently explored that De Beers and Mr. Evans’s companies allowed their claims to lapse. It is nevertheless close enough — within five kilometres in places — that Mr. Brockington’s pitch generates interest. Mr. Brockington says Margaret Lake’s 12 targets are what remains of 60 gravity anomalies after the company reviewed its geophysics and correlated the data with its indicator mineral sampling results. He goes on (and on) to describe the selection process, but he is much more reticent about the company’s plan. Mr. Brockington does say that the “drill and camp permitting process” is well under way, but he offers no target date. Drilling seems unlikely until early next year since 11 of the anomalies “are within lakes.” Margaret Lake’s recent $100,000 private placement will do no more than close its working capital deficiency and with drilling likely to cost at least $1-million, Mr. Brockington will need to round up some new backers or reinvigorate his current supporters this year.

And since we all love volcanoes…   the photo below of the Calbuco volcano in Chile is from IKN and you should check out the video at IWNATTOS if you’re into plinean eruptions.

 Volcano

Alaska, Yukon and diamonds

Good news for uranium bulls…   Japan to restart 2 reactors in June. [Mining.com]

Anglo (De Beers) to cut diamond production in 2015. Global mining company Anglo American said it planned to cut diamond production this year in response to lower prices, signaling reduced confidence in a prompt rebound. [Mineweb]

UCore touts MRT as  stock price goes into limbo pending development… obtains a worldwide license on “Metal Recognition Technology” to help mine REEs at Bokan Mountain, Alaska .  [MetalsNews]

NovaCopper buys Sunward for stock… say what? An Alaskan copper miner heads to Columbia? IKN figures that NovaCopper has lost patience waiting for the Ambler Road but the press release talks about using Sunwards $23M to advance Ambler. [CEO.ca / IKN]

BUST

 Kennady Diamonds over delivers again:   Bulk sample results are in: 3.64 ct/t @ Kelvin Lobe and 5.95 ct/t @ Kelvin Sheet. Other promoters might be inclined to upgrade their hopes for the deposit, but Patrick Evans is sticking to his guns:   we estimate that the Kelvin – Faraday kimberlite cluster has the potential to host between 10 and 13 million tonnes at a grade of between 2 and 2.5 carats per tonne.   [Junior Mining Network]

KDI

Stakeholder hires Shawn Ryan and GroundTruth; plans work at Ballarat Creek. Good to hear someone still likes the Yukon. [Junior Mining Network]

Ashburton heads back to Sheslay announces it is arranging an initial work program to commence the 2015 field season on its 100% owned Hackett property in the Sheslay Valley. [Junior Mining Network]

Zazu trying to raise $2M for Lik River [AK]… trying to catch that elusive zinc price rise. [Canadian Venture Financing]

wave

  TSX-V remains range-bound; latest wave crests. As soon as the index hits 700 there is high volume selling.  [Stockwatch]

TSX-V

 

 

Budget goodies, dollar turbulence, and Predators

  •  PDAC’s budget summary… goodies for the mining industry:
    • You can deduct your community consultation expenses!
    • Flow through until next year.
    • More money for Targeted Geoscience Initiatives

Party time

Avalanche

Dollar      CRB

 

  • And Mick Davis agrees:   Commodity prices close to bottoming out and what the former Xstrata chief matters since he’s running a $5.6B private equity fund that’s on the hunt.  As reported earlier – targets in his sights include HudBay and Capstone. [Financial Times]

Mick Davis

getting married

Bill … at Till (Capital)

[Junior Mining Network]

 

Art, diamonds and a junior miners ETF

 

Picasso

Lisheen Mine to close in October Forecast zinc deficit this year is a piddly 145-300t but next year…..  200,000t!  [Mining Weekly]

North Arrow provides details on Qilalugaq yellow diamonds…  Only 0.1% of all natural diamonds are deep yellow Type Ib diamonds.   All the Howe Street instant experts are cooing over this at Chat.ca and the stock chart reflects this… [Junior Mining Network]

NAR

In what must be seen as a sign the market is turning, Sprott’s Rick Rule unveils a new junior gold ETF.   Looks a lot like a mutual fund, it tracks an index of Sprott’s own making and uses a magic FACTORS THAT MATTERTM to calculate some mumbo jumbo.   Anyway – an experienced shepherd is calling his sheep. [CEO.ca]

Rick rule

Diavik production down a bit…  production was negatively impacted as mining progressed through an area of higher than normal dilution in the A-418 ore body, which reduced ore availability from this pipe. The high dilution is a result of minor geotechnical rock falls encountered last year.  [Stockwatch]

Diavik is done

Kivalliq Energy raises $2.7M likely destined for Saskatchewan not Nunavut these days.  [Junior Mining Network]

Margaret Lake Diamonds finds 12 High Priority Targets on their property.  next to Kennady Diamonds.  [Margaret Lake Diamonds]