April 3rd, 2024 - The Mine Wire

METALS MARKET

Most commodities have bounced back this week with a few keeping their strong momentum. Gold hit record highs with investors maintaining interest in safe haven assets. Silver stole the show as it is up 6.74% in the past week. WTI Crude surpassed $85 a barrel for the first time since October last year.

^{**For our chart above we are taking prices from Tuesday 4pm EST to Tuesday 4pm EST, so not the typical week of Monday through Friday.}

KEEPING AN EYE ON GOVERNMENT DECISIONS

With many forecasting significant demand for metals into the foreseeable future, governments are all over the place with their policies. Here are some of the notable moves this week:

• 🇨🇦 The Canadian government will extend the 15-per-cent Mineral Exploration Tax Credit for investors in flow-through shares for an additional year, until March 31, 2025.

• 🇨🇦 On March 22, 2024, Bill C-34, An Act to Amend the Investment Canada Act, received Royal Assent. This gives the government additional security review powers and allows the government to order “net benefit” reviews. McMillan Law Firm breaks it down here.

• 🇺🇸 If you didn’t catch Gracelin Baskaran’s talk at PDAC, we would recommend you check out her thought leadership. This week she argues for some actions the United States can take to better fund its critical minerals security.

• 🇺🇸 The US Office of Surface Mining rejected a state bill in Montana this week dubbed “The Coal Mining Bill” by challengers. The bill would have allowed the Department of Environmental Quality to issue permits without having complete information about how a mine might affect ground or surface water. We are sure the Dutton family is pleased.

• 🇺🇸 Alaska’s state-owned development bank is asking state lawmakers for permission to borrow up to $300 million that could be spent to support mining projects in the Last Frontier state.

• 🇧🇷 A bill to regulate wind power in Brazil is being held up by lawmakers who introduced amendments to extend coal-fired thermal plants through 2050. Environmentally friendly lawmakers are peeved at the amendments and now the two sides are stuck.

• 🇮🇩 The Indonesian government has said that it will accelerate the output of Nickel to keep prices low and protect long-term demand. We guess they aren’t taking any lessons from OPEC.

• 🇳🇬 Nigeria will only grant new mining licenses to companies that present a plan on how minerals will be processed locally.

• 🇳🇵 Nepal’s Division Of Mines And Geology granted 159 mining licenses to increase exploration and take advantage of the nation’s mineral potential.

• 🇲🇳 Mongolia’s ex-Prime Minister is in hot water in the United States. The government is looking to seize two NYC apartments bought in 2012 and 2015 for $14 million. Why? Apparently the PM embezzled money from a mining project.

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MINING MATTERS FROM AROUND THE WORLD 🌎

• Alamos Gold (AGI) announced a friendly acquisition of Argonaut Gold (AR). The total purchase price of $325 million was a 34% premium based on closing prices on March 26th, 2024. The market liked the acquisition with Alamos Gold up over 6% since and up over 30% the past 6 months.

• The ice roads that a number of mining companies rely on to access their diamond mines in Canada’s Arctic are being disrupted by the country’s mild winter. High costs of maintaining the roads are a reminder that infrastructure challenges persist and are a deterrent for new potential projects.

• The Canadian Press points out that coal exports are up almost 20% since the Canadian government said it would ban all exports by 2030. With a change in government likely in 2025, we think this is much ado about nothing for the time being.

• Hyundai Motor is ending its Indonesia aluminum deal with PT Adaro Minerals after a climate campaign by K-pop fans. What is the issue? K-pop fans don’t want the auto company buying aluminum generated from coal-fired power. Responsible Nickel companies, strategy to leverage?

• Korea Zinc is buying Kataman Metals, a US-scrap metals business for $55 million as it looks to expand its recycling business.

• Mitsui (8031) is purchasing $30 million in Atlas Lithium (ATLX) common stock and entering into an offtake agreement for the future purchase of 15,000 tons of lithium concentrate from Phase 1 and 60,000 tons per year for five years from Phase 2 of Atlas Lithium's soon to be producing Neves Project in Brazil's Lithium Valley.

• Indian Oil Corporation and Panasonic Energy India will form a joint venture to manufacture lithium-ion cells in India.

• Las Vegas-based MP Materials (MP) was awarded over $58 million to advance its Fort Worth rare earth magnet manufacturing plant. The award comes in the form of a tax credit, granted by the IRS and the U.S. Treasury Department.

MINING BITS

• 🇬🇾 🥊 Guyana’s President Mohamed Irfaan laid a smack down on BBC journalist Stephen Sackur this week in an exchange that went viral. The President said, “Let Me Stop You Right There,” and it didn’t get too pretty after that. Sackur was implying that Guyana’s decision to allow oil extraction off its coast would contribute to climate change. But the President masterfully turned the tables and accused the journalist of hypocrisy. Full interview is here.

• 🖼️ BHP has surpassed Glencore in “brand value” according to brand finance. BHP’s brand value has surged 17% to $6.1 billion while Glencore saw a small increase to $5.9 billion. In terms of sustainability perceptions, POSCO from South Korea took top spot, with BHP in a close second.

• 🌑 The Defense Advanced Research Projects Agency, or DARPA, recently chose the aerospace and defense giant Northrup Grumman to create the concept for a railroad on the moon.

• 🏛️ Reynold’s is being sued in a New York court after a consumer brought forward a class action lawsuit. On what basis? Well, the lawsuit claims that Reynold’s Wrap Aluminum Foil is actually not, “Made in America” and by falsely claiming so, they are able to charge more money for their product.

• 🏠 A new provincial government-funded initiative in British Columbia, Canada, will see Nanaimo city’s extensive network of decommissioned mine shafts renovated and repurposed into stylish, underground homes. With housing affordability in tatters, we suspect there will be no shortage of interest.

• 🌋 🇨🇦 It looks like Canada isn’t monitoring its volcanos including it’s most threatening volcanoes at levels recommended by internationally recognized strategies. For all those mining companies in Toronto, don’t worry! All of the volcanos are in British Columbia.

• 💎 That didn’t take very long. Four men were arrested in Antwerp for allegedly smuggling Russian diamonds into the European Union. The value of the diamonds - $24 million.

• 💸 It looks like a lot of early investors in Trump’s Truth Social (DJT) were in for the pump and dump. One investor told Reuters, “"You buy the stock, wait for Trump's fan base to hear about it, and enjoy your profit." The company soared to an $8 billion valuation but plunged 25% on Monday when its yearly financials were reported. The company lost $58 million dollars and had a measly $4 million in revenue.

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