December 18th, 2024 - The Mine Wire

METALS MARKET

Last week the Bank of Canada cut interest rates by 50 basis points to 3.25%. With CPI data coming in at 1.9% for the month of November, analysts are expecting slower cuts moving forward. This week, the Bank of Japan and Bank of England are expected to hold rates while the U.S. Federal Reserve is expected to make another quarter point cut.

In commodity news, China’s daily coal output hit its highest level ever last month. The country mined 427.98 million metric tons, averaging 14.27 million tons per day.

^{**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.}

CANADA’s DEPUTY PM RESIGNS PUBLICLY plus FALL ECONOMIC STATEMENT

On Monday, Deputy Prime Minister & Finance Minister of Canada, Chrystia Freeland, dropped a bomb as she resigned publicly just hours before she was to introduce the Fall Economic Statement (FES). PM Trudeau apparently told her Friday that he lost confidence in her abilities to continue in the role and was going to offer her a different cabinet position. Maybe wait until after your Finance Minister delivers the 2nd most important document of the year?

So, Freeland took aim at the Prime Minister in a public letter where she said Canada needed to keep its “powder dry” for a tariff war with the United States and couldn’t afford “costly political gimmicks”. There had been infighting in the weeks previous about a $250 tax rebate cheque to working Canadians that didn’t get included in the FES document.

Most opposition leaders called for an immediate election to be called while the NDP said Trudeau could no longer stay in the role. While it isn’t clear whether Trudeau will resign, prorogue parliament or call an election, it is clear that the governing Liberals are headed for a complete bashing in the next election which has to come at some point in 2025. We can only imagine that President-elect Trump is having a chuckle down in Mar-a-Lago. He tweeted, “she will not be missed” and continued to call Trudeau the Governor of Canada.

FALL ECONOMIC STATEMENT HIGHLIGHTS:

The Fall Economic Statement or mini-budget as it is often referred to, is a mid-year financial updates that includes a few additional investments outside of the normal budget in the spring. Here are some of the key pieces of FES as it relates to business and the mining sector:

• The deficit for 2023/2024 was $61.9bn and the projected deficit for 2024/2025 is $48.2bn. We know that PM Trudeau did a celebrity boxing match before he was elected, but we didn’t expect him to spend money like Mike Tyson in his heyday.

• FES announced Canada’s intent to impose tariffs on imports of certain solar products and critical minerals from China early in the new year. Canada also intends to impose tariffs on semiconductors, permanent magnets, and natural graphite from China, beginning in 2026.

• There were a host of enhancements to the SR&ED tax credits. If you have used these in the past you will want to take a look at the document. There were also billions upon billions announced for investments into Artificial Intelligence (AI). If this is a space you play in, then you’ll want to check-out the FES document.

• There were billions announced to support the future of nuclear energy in Canada including $970m to support the design and development of small module reactors. The government also announced it’s intent to backstop up to $500m in enriched nuclear fuel purchase contracts from the United States or other allied countries.

• It includes a mining-focused amendment to correct the critical mineral eligibility threshold for the Clean Technology Manufacturing Investment Tax Credit and includes a change to the Alternative Minimum Tax to ensure that the increase to the inclusion rate for capital gains does not significantly erode the value of the Mineral Exploration Tax Credit.

• "Today's FES brings some much-needed adjustments that will support our sector and help enable Canada to make good on its Critical Minerals Strategy." explained Pierre Gratton, Mining Association of Canada's President & CEO. (Newswire)

So while there are some positive inclusions in this document that may help the mining industry, so much is still up in the air. If you want to make sure you are taking advantage of the programs that are available before a potential change in government, do feel free to reach out to our regular sponsor S&A Strategies, a Canadian government relations firm, as they have experience in most sectors, including mining.

KEEPING AN EYE ON GOVERNMENT DECISIONS

Here are some of the notable government policy moves this week:

• 🇨🇦 In response to Trump’s 25% tariff threat, the Federal government said it was considering an export tax of 25% on oil, uranium, potash, critical minerals and other commodities. Ontario’s Premier Doug Ford said he would cut off electricity to United States customers. Trump responded, that’s fine, we are subsidizing Canada. The Alberta & Quebec Premiers said they would not cut off energy. Saskatchewan’s Premier was clear that he wanted export tariffs off the table given their agricultural, potash and uranium industries. Fast forward to the Council of Federations meeting earlier this week in Ontario where the Premiers were to discuss the threat of tariffs and get on the same page. Instead, they were hit with the debacle in Ottawa. The positive? Provinces like Alberta have already taken steps to strengthen their border and the Federal government announced $1.2bn towards border security initiatives. Trump has said the tariff threat can go away if Canada secures its border. Seems like the threat is doing its job. (Financial Post) & (Globe & Mail)

• 🇺🇸 The Office of the United States Trade Representative announced tariff increases under Section 301 for imports from the People’s Republic of China of certain tungsten products, wafers, and polysilicon. The rates for solar wafers and polysilicon will increase to 50%, and the rates for certain tungsten products will increase to 25%. These tariff increases will take effect on January 1, 2025. (USTR)

• 🇺🇸 🇨🇳 Peter Navarro, Trump's incoming senior counselor for trade and manufacturing, sent warning shots at China over their comments about potentially letting the yuan weaken next year in response to promised tariff increases. Navarro said that Trump could choose to escalate tariffs even further if China weakens its currency, rather than waiting for the biannual Treasury report. Expect this one to heat up. (Reuters)

• 🇺🇸 The U.S. Energy Department is offering initial contracts to six companies to produce domestic uranium fuel for conventional nuclear plants to generate electricity. The country currently gets 25% of its enriched uranium from Russia and wants to change that. The six companies are: Centrus's American Centrifuge Operating; General Matter; Global Laser Enrichment; Urenco's Louisiana Energy Services; Laser Isotope Separation Technologies and Orano Federal Services. (Reuters)

• 🇺🇸 🇨🇦 Canada announced a co-investment with the United States in Fireweed Metals Corp. (CVE: FWZ). Fireweed will receive up to CA$12.9m (US$9.2m) from Natural Resources Canada and US$15.8m (CA$22.1M) from the U.S. Department of Defense for various initiatives in the Yukon Territory, Canada. Congratulations to Fireweed! (Canada) & (United States)

• 🇨🇦 The Canada Growth Fund, a $15bn arm's-length public investment vehicle, announced its first investment in the critical minerals space. It has entered into a definitive agreement with respect to a CA$35.6m private placement with Nouveau Monde Graphite Inc. (TSXV: NOU, NYSE: NMG). CGF's investment will be alongside an investment by Investissement Québec under the same terms as CGF's investment, for aggregate proceeds to NMG of CA$71m. Big ups to NMG! Stock is up nearly 10% on the news. (CISION)

• 🇲🇽 President Claudia Sheinbaum announced that her administration will review the proposed ban on open-pit mining, approved in August by the Constitutional Points Commission of the Chamber of Deputies. She highlighted the necessity of open-pit mining for the extraction of critical materials, warning that an outright prohibition could have counterproductive effects. Given the United States’ need to source critical minerals, we can only assume that Mexico will want to be a friendly neighbor to avoid tariffs. Certainly a positive tone change for many operators, although we would fully expect the lobbying to start on what is excluded from any potential ban. (Mexico Business News)

• 🇦🇺 Australia’s main opposition group, the centre-right Liberal Party, has laid out a A$331bn ($211bn USD) plan to create a taxpayer-funded nuclear power industry. The proposal calls for seven commercial nuclear plants by 2050, with the first operational by 2036. Nuclear is currently banned in Australia, so any development would be from scratch. The Labor government is focused on boosting renewable energy, but the opposition has said it is more expensive and unreliable. An election has to be held before May 17th, 2025 so we won’t have to wait long to see how this unfolds. (NucNet)

• 🇦🇺 We missed it last week, but congratulations to Resource Capital Funds. Australia’s government owned green bank, the Clean Energy Finance Corporation, has invested US$75m in global alternative investment manager Resource Capital Funds to support Australia’s emerging critical mineral supply chain and build further momentum in the clean energy transition. (CEFC)

• 🇰🇿 🇷🇺 🇨🇳 Kazatomprom announced that Russia's Rosatom was selling its stake in some jointly developed uranium deposits through a subsidiary to a company controlled by China's State Nuclear Uranium Resources Development Company. Rosatom is also expected to give up 30% in the Khorasan-U joint venture to an entity controlled by China General Nuclear Power Corporation. With sanctions on Russia impacting Kazatomprom’s ability to export some uranium, the sale makes sense for all parties involved. (Reuters)

MINING MATTERS FROM AROUND THE WORLD 🌎

• 🇦🇷 Rio Tinto has approved a $2.5bn investment to expand the Rincon project in Argentina, the company’s first commercial scale lithium operation. Rincon's capacity of 60,000 tonnes of battery grade lithium carbonate per year is comprised of the 3,000-tonne starter plant and 57,000-tonne expansion plant. The investment is certainly a big win for President Milei who just finished his first year in office. (Businesswire)

• 🇨🇦 Agnico Eagle will acquire O3 Mining Inc. (TSXV: OIII) in a friendly transaction worth roughly CA$204m. The all cash offer of $1.67 per share represents a 58% premium to O3 Mining's closing price on December 11th, 2024. (Agnico Eagle)

• 🇦🇺 Congratulations to Fleet Space Technologies which raised A$150m on a valuation of A$800m+. The round was lead by Teachers’ Venture Growth (TVG), an arm of the Ontario Teachers Pension Plan and joined by 5 existing investors. (Fleetspace Technologies)

• 🇨🇦 The Taykwa Tagamou Nation is investing CA$20m into Canada Nickel (CVE: CNC). The miners project in the Timmins area of Ontario is near the First Nation. Chief Bruce Archibald said, "By utilizing our own capital to secure a significant stake in Canada Nickel, we're ensuring we have a true seat at the decision-making table." We like the investment and approach. (CBC)

• 🇺🇸 Vale has concluded negotiations with the US Government’s Department of Energy’s Office of Clean Energy Demonstrations and will commence Phase 1 of the project to develop an industrial-scale briquette plant in the state of Louisiana. In this phase, more than US$3.8m of awarded funds will be applied to conduct engineering studies and community engagement throughout the year of 2025. The Agreement allocates up to US$282.9m throughout the project’s timeframe (into 2031). Nice! (Vale)

• 🇺🇸 Congrats to Talon Metals (TSX:TLO) which has been awarded a research and development contract from the Department of Defense’s Defense Logistics Agency to fund scientific research on new approaches for extracting nickel, cobalt and iron from domestic nickel sulphide ores and tailings. (Talon Metals)

• 🇲🇱 In response to an arrest warrant for Barrick’s CEO last week, the company has fired its own shots this week. In a statement posted on Monday, the company said, “Local operating conditions have deteriorated significantly with employees imprisoned without cause and gold shipments blocked. If shipments remain suspended, Barrick will be compelled to suspend operations, further impacting the viability of this critical economic driver for Mali.” (Barrick Gold)

THE 8th ANNUAL GROUNDUP NETWORKING RECEPTION

The Mine Wire & Investor.Events Present the 8th Annual GROUNDUP Networking Reception at the PDAC featuring VIP Poker Tournament - Register here:

• The GROUNDUP Networking Reception (4pm to 7pm)

• VIP Poker Tournament (7pm to 11pm)

The GROUNDUP Networking Reception: Join us at the Walrus Pub & Beer Hall for a night of networking, drinks, and industry insights. Rub elbows with top investors, mining executives, and industry professionals. Whether you're a seasoned pro or just starting out, this event is perfect for anyone looking to make valuable connections.

VIP Poker Tournament: a Tournament for Mining Executives, Investors, Brokers & Industry Professionals in town for the PDAC - a Night of Fun, Networking, and Good Vibes!

CONFIRMED INDUSTRY SPONSORS: Venture Liquidity Providers | Endeavour Trust | Whitewater Mgmt| UPLISTING Advisory Services | OTC Markets Group | Stockhouse Publishing | Exploration Sites | MiningHub | Mitsubishi

MINING BITS

• 🚀 ispace, a global lunar exploration company, and Magna Petra, the first lunar resources company engaged in the prospecting, extraction and return to earth of helium-3 isotopes from the lunar surface, have agreed to collaborate on future missions to the lunar surface. Helium-3 is a stable isotope of helium and is predominantly used for nuclear fusion reactions with deuterium (heavy hydrogen) to produce large amounts of energy. It is rare on earth but more common on the Moon where it has accumulated in the absence of atmosphere. We wish both companies a lot of luck with this endeavor as energy produced from the Helium-3 is considered clean (no waste or greenhouse gas emissions). Shout out to Epiroc - we see your logo on that rover! (ispace)

• 💎 🇦🇺 Australia’s National Reconstruction Fund will invest $13m into Quantum Brilliance to build Australia’s first quantum diamond foundry. Synthetic diamonds are required to build quantum accelerators and Quantum Brilliance is “one of only a few companies worldwide already able to deliver quantum computing systems for customers to operate on-site today.” Breakthrough Victoria, a state government organization, will also be investing $10m into the company. (Forbes Australia)

• 🇳🇬 The Associated Press takes a look at illegal lithium mining in Nigeria and its impact on the poorest & most vulnerable - children. Working hours on end for less than a dollar per day, children as young as 6 work in these illegal operations. “Their work often provides material for Chinese businesses that dominate Nigeria’s laxly regulated extractive industry and are often blamed for illegal mining and labor exploitation,” says the AP. Segun Tomori, a spokesperson for the Ministry of Mining and Solid Minerals Development in Nigeria, said ongoing reforms such as amending the Minerals and Mining Act are aimed at minimizing the use of child labor. Um, how about changing the word minimize to eliminate? Very sad, lots of pictures and a stark reminder of the importance of sustainable and ethical mining practices. Also why tariffs on Chinese goods should be supported. (AP News)

• 🇦🇺 The Australian Financial Review exposes a convicted pump & dumper, Gabriel Govinda, of winning numerous mining exploration licenses in NSW’s north coast. The NSW resources regulator told the AFR that it had commenced an investigation into Pinpoint and Historic Gold Mines after a complaint. Govinda was previously convicted of classic pump & dump schemes where he used up to 20 accounts of family & friends to manipulate stock prices and buy low, sell high. A good read. (Australia Financial Review)

Not Signed Up to The Mine Wire Yet? 

We do the hard work and curate news from around the globe related to mining and bring it to you once a week in a free and easy to read format. Whether you’re a seasoned industry professional or a curious enthusiast, our newsletter delivers the latest updates, cutting-edge trends, and expert analysis straight to your inbox in an exciting format once a week. Subscribe below!