August 14th, 2024 - The Mine Wire

METALS MARKET

WTI Crude saw significant gains this past week as there was a sharp drawdown in US crude inventories coupled with continuing tensions in the middle east.

Safe haven metals bounced back while those related to China’s economic growth or the clean energy transition continue to suffer.

^{**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.

• 🇺🇦 A Ukrainian deputy energy minister has been arrested by Ukraine's SBU Security Service for demanding a $500,000 bribe from mining industry officials. Apparently the mining executives wanted to transfer equipment from the front lines in eastern Donetsk region to a coal basin in western Ukraine. They were told they would need to pay the bribe for the pleasure of having the equipment. Ukraine’s current President rose to power through a commitment to deal with corruption which was rampant in Ukraine prior to the Russian invasion. We might be a bit hawkish, but with a war going on this is borderline treason in our opinion. (Barrons)

• 🇦🇺 The New South Wales State has updated laws related to mine subsidence which is the movement of the ground that can be caused by underground active or historical coal mining activities, which may cause damage to structures built above. While previously only property owners were entitled to compensation, the new laws give tenants reasonable relocation and short-term accommodation expenses where the property they are leasing is uninhabitable, under repair or under construction due to subsidence. (NSW Government)

• 🇦🇺 🇲🇳 We enjoyed reading The Diplomat’s interview with Australia’s Ambassador to Mongolia, Katie Smith. Did you know that there are over 60 Australian companies operating in Mongolia? (The Diplomat)

• 🇨🇦 Jinteng (Singapore) Mining, a subsidiary of China's Zijin Mining Group, is challenging the Canadian governments potential formal review of a deal with Pan American Silver Corp. to sell its stake in Peru’s La Arena gold mine for $300m USD. The Chinese company has filed a judicial review and claims the Minister has no authority to act. "The targets are Peruvian entities. They do not have a place of operations in Canada or otherwise carry on operations in Canada, they do not have individuals in Canada who are employed or self-employed in connection with their operations and they do not have [assets] in Canada used in carrying on their operations," the application says. (CBC)

• 🇨🇦 Canada’s The Logic reported that government documents show 'major gaps' in Canada's EV supply chain. The pace of mine openings in Canada needs to increase fivefold through 2035 to support its four major gigafactories, according to an internal government document that warns of these “major gaps” in the country's EV supply chain. (The Logic)

• 🇨🇦 Meanwhile two different groups are calling for increased tariffs and actions by the Federal government. Canada’s Steel and Aluminum industry is calling on the government to take action like the United States & Mexico, so that the country doesn’t become a dumping ground for Chinese product. The Conservative opposition leader has echoed this call and further, has asked the Canadian government to take action against Chinese EV’s and to consider a similar 100% tariff that the United States announced. (CBC Steel & Aluminum) & (CBC EV’s)

• 🇨🇦 Six First Nations groups in Ontario are challenging the province's Mining Act, arguing it violates their treaty and Charter equality rights. In a similar case in British Columbia, the Supreme Court ruled the province's mining permit system was not in compliance with the government's duty to consult Indigenous groups. Certainly this litigation and any ruling of non-compliance will only add length to projects in the north. (CBC)

• 🇨🇦 In more positive news, the Saskatchewan government has announced that it is now accepting applications for its two mining programs: The Critical Minerals Processing Investment Incentive (CMPII) and the Saskatchewan Critical Minerals Innovation Incentive (SCMII). These programs target 11 critical minerals found in the province and share a $500 million funding pool that will be available until March 2029. Big potential opportunity to explore! (Government of Saskatchewan)

• 🇺🇸 The U.S. Department of Energy (DOE) announced $10.2m for four projects that will advance cost effective and environmentally responsible processes to produce and refine critical minerals and materials in the United States. (U.S. Department of Energy)

• 🇺🇸 The Biden administration is proposing to restrict which federal lands in North Dakota can be mined for coal in the future. The plan would reduce the amount of federal land that could be leased for new coal development by about 90.5 percent. (The Hill)

• 🇿🇲 Zambia is proposing a Minerals Regulation Commission Bill that would allow the government to acquire a shareholding in exploration areas before licenses to search for minerals are granted to investors. Two different mining bodies have raised the alarm that this could increase investment risk and deter new projects. (Reuters)

• 🇿🇲 🇨🇩 A spat between Zambia and the Democratic Republic of the Congo seems to be sorted for now. Zambia had closed its borders after the Congo blocked the import of beer, soft drinks and lime. Most of the Congo’s copper travels through Zambia to reach regional ports. (Reuters)

• 🇬🇭 Ghana has opened its first commercial gold refinery where the government holds a 20% stake. The Royal Ghana Gold Refinery is a public-private partnership between Rosy Royal Minerals of India and Ghana's central bank and has the capacity to process 400 kilos of gold per day. (Reuters)

MINING MATTERS FROM AROUND THE WORLD 🌎

• According to Politico, roughly 30,000 protestors marched in the streets of Serbia’s capital Belgrade last Saturday. The protestors are against the recently approved Rio Tinto Lithium project in Jadar Valley in the western part of the country. A court decision about a month ago allowed the government to pull a 180 and look at options to make the project work. Due to a lack of production of Lithium in Europe the project enjoys support from the EU & Germany, but environmental activists are against the project and have organized around 50 protests since June. (Politico) or (BBC)

• South Africa’s Gold Fields (JSE: JFI) is buying Canada’s Osisko Mining (TSE: OSK) for $2.16bn. Osisko’s main asset is a gold deposit known as the Windfall project which is near Val D’Or, Quebec. The purchase price was a 55% premium to Osisko’s 20-day average trading price as of August 9th. (Financial Times)

• Privately held US Strategic Metals (USSM) has received a non-binding Letter of Interest from the Export-Import Bank of the United States (EXIM Bank) for a potential $400 million debt funding package for Madison, their flagship cobalt mining project. (Benzinga)

• BHP has reportedly engaged Banco Santander to help them explore selling their gold and copper assets in Brazil. (Reuters)

• A Cypriot Holding company has been flagged by Belarusian journalists for violating European Union sanctions on Belarusian potash company Belaruskali. The holding company was engaged to help with shipping and transportation services in Russia and it appears that there is an enormous mark-up on services, signaling the possibility of corruption by Belarusian officials or their network. (Politico)

• Congratulations to TechMet which has raised $180m from the Qatar Investment Authority to invest in critical minerals projects. TechMet has invested over $450m in various ventures, including Brazilian Nickel, Cornish Lithium, EnergySource Minerals, US Vanadium, Trinity Metals, and Xerion Advanced Battery Corp. (Sustainable Times)

• And shout-out to Ramp Metals Inc. (CVE: RAMP) who closed an oversubscribed $4.9M non-brokered private placement led by strategic investors Eric Sprott and EarthLabs. The grassroots exploration company is focused on a potential new Saskatchewan gold district. (RAMP Metals)

Q2 EARNINGS GOLD BONANZA! - Here are some of the key earnings this week from a number of companies, many in the gold space.

• Barrick Gold Corporation (TSE: ABX, NYSE: GOLD) - (Report Here) - the gold giant reported $370m USD Q2 profit up from $305m USD. The stock is up around 9.75% since the news and just over 10% in 2024. Over the past year the company is up 17.05%, lagging behind some other gold miners with significantly higher gains. Still a 17% yearly gain is nothing sneeze at.

• Glencore (LON: GLEN) - (Report Here) - The mining behemoth released is first half results this past week. While revenue was up 9% to $117.1bn USD, the miner went from a profit of $4.57bn USD a year earlier to a net loss of $233m USD. Glencore announced that it will not be spinning off its coal and carbon steel materials business after 95% of shareholders showed support for keeping the assets. The stock is up over 6% since the report, but down 12.63% year to date.

• IAMGOLD Corporation (TSE: IMG, NYSE: IAG) - (Report Here) - The miner came out with significant increases in production and revenues. Q2 revenues were $385.3m compared with $238.8m a year earlier. The stock is up around 27% since earnings and nearly 105% year to date. We hope you have this one in your portfolio!

• Franco-Nevada (TSE: FNV, NYSE: FNV) - (Report Here) - The company recognized $260.1m in revenue, down 21.2% from Q2 2023 (up 0.7% excluding Cobre Panama). The stock is up over 12% in 2024, but still down nearly 12% in the past year.

• B2Gold (TSE: BTO, NYSE: BTO) - (Report Here) - While the miner reported higher revenues of $493m in Q2 compared with $471m a year earlier, the company swung to a loss of (0.02) earnings per share compared with a positive 0.06 per share a year earlier. Lower production due to excavator damage at its Fekola mine and a lower production guidance for the rest of the year have attributed to a nearly 10% decline in the stock price since earnings. The stock is down 14.39% this year.

• Seabridge Gold Corporation (TSE: SEA, NYSE: SA) - (Report Here) - The company posted a net profit of $45.2m compared to a net profit of $9m a year earlier. The stock has been a strong performer and is up over 40% this year.

• Torex Gold Resources Inc. (TSE: TXG) - (Report Here) - Production was up slightly while revenue saw a significant increase to $270.3m compared with $211.3m a year earlier. Adjusted EBITDA was roughly in line with a year ago. The stock is up over 17% since Q2 earnings came out and is up a staggering 63.16% this year.

• Calibre Mining Corp. (TSE: CXB) - (Report Here) - Q2 earnings came in at $137m compared to $139m a year earlier. The company says it has achieved 77% of its construction at its Valentine Gold mine in Canada and should be in production by Q2 2025. The stock didn’t move on the news, but is still up 56.92% in 2024.

• Orla Mining (TSE: OLA, NYSE: ORLA) - (Report Here) - The company reported earnings per share of 0.07c up from 0.04c a year earlier. The stock was up over 3% on the day and is up nearly 21% year to date.

MINING BITS

• 🇳🇿 It looks like more and more New Zealanders are looking to get out of the island nation as the economy struggles, unemployment rises and interest rates remain high. Add in the massive increases in cost of living and it isn’t much of a surprise that some are looking elsewhere. Data released by Statistics New Zealand showed that 131,200 people departed New Zealand in the year ended June 2024, the highest on record for an annual period. Around a third of these were headed to Australia. With a population around 5.3 million, that is roughly 2.5% of the population exiting. Ouch! (Reuters)

• 🇦🇺 💻 Next door in Australia, another miner was hit with a ransomware attack. Gold producer, Evolution Mining (ASX: EVN), told the Australian Securities Exchange that it became aware of a ransomware attack impacting its IT systems on August 8th The miner had said it believes the attack is contained. Just a month ago, we reported that South African miner Sibanye-Stillwater (JSE: SSW) was the victim of a cyber attack. Whether it was Zero Cool, a hacker group or state-funded shenanigans, all miners should be constantly updating their cybersecurity systems and protocols, particularly given the rapid advancement of AI & technology. (ABC News)

• 🇧🇷 Reuters takes an in-depth look at the Munduruku people in Brazil and the Sawre Muybu Indigenous Territory. This indigenous group is fighting to have their ancestral lands protected. With President Lula back in power, he has been supportive of such claims whereas former President Bolsonaro was not. Despite the support, Brazil’s Indigenous affairs agency Funai says it has been short-staffed which has lead to delays. It says it is working to establish boundaries for these ancestral lands. With illegal logging and mining taking its toll on the territory, this group wants quicker action. (Reuters)

• 🇨🇦 The Narwhal takes a look at 5 tailings ‘ponds’ shored up by dams in British Columbia and suggests that any failure would be disastrous for the environment. Given both the 10 year anniversary of the Mount Polley Mine tailings pond failure coupled with the recent incidents in the Yukon, we aren’t surprised to see this coverage and the industry should expect continued attention. (The Narwhal)

• 🇺🇸 Scientific American had an opinion piece by a public lands policy specialist from the Center for Biological Diversity arguing that the U.S. government should not move domestically abundant minerals to the critical minerals list. Specifically, they mention copper, potash and phosphates. They argue that critical and profitable should not be conflated and point to the importance of rigorous processes to protect the environment. While we agree that governments should have robust protections in place, certainly having the 2nd worst permitting time in the world should be a concern. Further, current abundance does not mean that the mineral meets projected future demand, as is the case for copper when considering the rise of AI. (Scientific American)

• 🇨🇦 On the flip side, Yukon economist Keith Halliday takes a look at the potential impact of “no mining” in the Yukon as some groups are calling for. The sector currently accounts for 11% of the economy but the overall impact is more significant. Any reduction in the sector would have significant impacts on healthcare, education and overall affordability for families. Worth a read. (Yukon News)

• ☄️ Betakit covers Next Generation Manufacturing Canada’s (NGen) $21.4m investment into 15 projects in Canada. The Moonshot stream is a $5m program aimed at supporting the development of novel “In-Situ Resource Utilization” (ISRU) solutions for mining, minerals, and manufacturing in both lunar and terrestrial environments. In this round six projects received $4.6m from NGen and its industry partners (Betakit)

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