October 23rd, 2024 - The Mine Wire

METALS MARKET

Base Metals like Iron Ore saw small gains as China cut its lending rates by a quarter basis point on Monday as it continues to try and stimulate its economy.

Precious metals like gold and silver continued to shine as investors moved money into these safe haven assets with growing uncertainty related to the global economy as well as geopolitical tensions in the Middle East.

Later today, the Bank of Canada is expected to announce another interest rate cut. The question is whether it will be a quarter point or half point cut.

^{**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

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

• 🇦🇺 The New South Wales government released their new Critical Minerals and High-Tech Metals Strategy. The program will deliver a $250m royalty deferral initiative for critical minerals projects and will examine the implementation of a rapid assessment framework for minerals mining projects. The royalty deferral will be an opt-in scheme where the first five years of royalties are deferred. It will apply to critical minerals projects which can start production between July 1st, 2025 and June 30th, 2030 which predominantly mine commodities listed on the Commonwealth Government’s Critical Minerals List and where the proponent has a market capitalization under $5bn. Read more here —> (NSW Government)

• 🇺🇸 Using a combination of water testing and machine learning, a U.S. Geological Survey-led study estimated between 5 and 19 million tons of lithium reserves are located beneath southwestern Arkansas. (U.S. Geological Survey)

• 🇺🇸 The U.S. State Department gave a shout-out to Denham Capital and the Energy and Minerals Group from the United States and Vision Blue Resources from the United Kingdom for their $150m lead investment in Serra Verde’s rare earth elements project in Brazil. The project was also added to the Mineral Security Partnership’s list of projects that are of critical importance to the global energy transition. (U.S. State Department) & (Serra Verde) 

• 🇨🇦 🇮🇳 In 2023, the Canadian Prime Minister Justin Trudeau accused the Indian government of orchestrating the killing of a Sikh leader on Canadian soil. Last week he doubled down and expelled six Indian diplomats which resulted in six Canadian diplomats being expelled from India. Things are heating up and with a Canadian election around the corner, expect the Prime Minister to potentially take a tough stance in “standing up for Canada’s sovereignty.” How might this impact mining? Canpotex - Mosaic and Nutrien's potash-exporting joint venture signed a deal with three Indian fertilizer companies in September 2022 to export at least 1.5 million metric tonnes to India annually for three years. While there currently is no indication of an economic escalation, we hope the associations and companies are in elected officials ears about preventing any potential trade disruptions. (Reuters)

• 🇯🇵 Japan will shift away from coal and back towards nuclear once again. Not surprisingly, the island nation shut-down its reactors after the 2011 Fukushima disaster. However, the country is now importing roughly $510m worth of fossil fuels PER DAY to keep things moving which is seen as costly and unsustainable with AI increased energy usage around the corner. Nuclear currently accounts for less than 10% of its electricity but the country would like to get that to 20-22% by 2030. (Barrons)

• 🇧🇷 Brazil is reassessing rules that protect caverns from exploration and development. Vale sees the potential to unlock 1.6bn tons of iron ore reserves if the government changes rules around mining in caves. We would expect any significant changes to face public resistance. (BNN Bloomberg)

SPECIAL REPORT BY S&A STRATEGIES: BC Provincial Election

Last Saturday, British Columbians went to the polls to elect a new provincial government and it was a close one. It was so close that 119 votes may have made the difference between which political party will govern. Due to guaranteed recounts and some technical difficulties in a few ridings, the final tallies will happen between Oct. 26th-28th.

The incumbent BC New Democratic Party (NDP) was leading in 46 electoral ridings while the Conservative Party of BC was leading in 45. The BC Greens won 2 ridings themselves. It takes 47 seats to win a majority government.

If these are over-turned and the Conservatives win them, then they will govern as they will have the 47 seats. If the NDP holds on to these seats, then they will have the first chance to make a deal with the BC Greens to govern which seems most likely.

So What Will the Greens Do?

The BC Greens could decide to enter a coalition government with the NDP, asking for a Minister role or they could negotiate a confidence and supply agreement or they could support legislation on a case-by-case basis. Yesterday, the NDP’s leader David Eby said “Nothing’s off the table” in regards to securing a deal with the BC Greens. The Greens however said they aren’t ready to talk just yet.

The Greens and NDP share a lot of similar policies when it comes to things like Healthcare & Education but diverge somewhat on policies related to the environment. It means that the Greens may want commitments on mining, oil & gas and environmental protections as part of any deal.

So How Do the Greens Feel About Mining?

In their election platform the BC Greens made commitments to reform the mining sector. These commitments include:

• Modernize BC’s mining and mineral staking regimes to respect Indigenous rights and reduce risks to our watersheds and communities.

• Modernize the Mineral Tenure Act to ensure it reflects current environmental, social and Indigenous rights concerns.

• Establish an industry-levied fund to mitigate the costs of mining pollution and disasters, including the rehabilitation of abandoned mines.

• Enhance oversight of the mining industry through a robust inspection and audit process.

• Designate certain areas, including salmon rivers, as off-limits to mining.

• Engage in a conversation about the future of critical minerals in BC. Prioritize transition minerals in mining. Ensure that benefits flow to communities and First Nations, not just shareholders.

The Greens Also Agreed to Strengthen Environmental Protections:

• Create an integrated and independent compliance and enforcement regime for the Ministry of Energy and Mines.

• Increase bonding rates for industry to account for worst-case scenarios and raise fines to deter reckless behavior.

• Address industry’s disproportionate access to government in decision-making processes.

• Lower thresholds for mandatory environmental assessments and close loopholes that allow projects to avoid assessments.

• Increase oversight and independence of the BC Conservation Officer Service and other Natural Resource Compliance Officers.

So What Does This Mean For Mining Projects In British Columbia?

It is anyone’s guess what this may or may not mean, but certainly any contentious proposed project will have a much harder time under a minority government. Further, we would potentially expect concessions related to enforcement regimes and an expansion of protected areas in the province.

The Association of Mineral Exploration (AME) had called for a streamlining of permitting processes to help get projects moving more quickly. However, the above platform commitments may throw salt in the ice rink if you catch our drift. Stay tuned for more next week!

MINING MATTERS FROM AROUND THE WORLD 🌎

• Both Amazon & Google signed significant deals related to nuclear energy that sent uranium miners up on the day. Amazon signed four deals including a deal with Energy Northwest who will develop four small nuclear reactors. Amazon also made an investment in X-Energy, a leading developer of next-generation SMR reactors and fuel, and X-energy’s advanced nuclear reactor design will be used in the Energy Northwest project. Other deals were made with Dominion Energy & Talon Energy. (Amazon)

• Google and Kairos Power signed a Master Plant Development Agreement, creating a path to deploy a U.S. fleet of advanced nuclear power projects totaling 500 MW by 2035. Under the agreement, Kairos Power will develop, construct, and operate a series of advanced reactor plants and sell energy, ancillary services, and environmental attributes to Google under Power Purchase Agreements. (Kairos Power)

• General Motors (GM) announced it will contribute $625m in cash and letters of credit to a new joint venture with Lithium Americas (TSE: LAC). The funding will enable the development of the Thacker Pass project in Humboldt County, Nevada. GM will acquire a 38% asset-level ownership stake and will provide $430m of direct cash funding as well as a $195m letter of credit facility that can be used as collateral to support reserve account requirements under the $2.3bn Department of Energy loan that was announced earlier this year. (Businesswire)

• Mineral Resources’ (ASX: MIN) stock took a beating this week after it was reported that its founder & CEO Chris Ellison admitted to tax evasion. Ellison said the unreported revenue came from overseas operations and before 2006 when Mineral Resources went public. "All outstanding tax, penalties and interest that should otherwise have been paid by me has been fully repaid, and the matter has been settled with the ATO," said Ellison. Reuters reported that analysts at RBC Capital Markets said the share price move was overdone, given that there appeared to be no impact on operations or management at face value. Sounds like a buying opportunity to us! (Reuters)

• The Democratic Republic of Congo’s state miner, Gecamines, has submitted a bid for the cobalt and copper assets of Chemaf Resources. Earlier this year the DRC and Gecamines opposed the sale of Chemaf’s assets to China’s Norin Mining. Given that the DRC is looking to take more ownership over its assets and also diversify away from China, we would expect pressure to be put on Chemaf to capitulate. (Mining Technology)

• Baffinland Iron Mines is laying off 10 per cent of its workforce in Nunavut due to weak iron ore prices. Most of the 170 to 200 jobs being cut will be in blasting and trucking operations, and will include both employees and contractors. Inuit workers will not be impacted. The company said it will focus its attention and resources on its Steensby rail project which is expected to commence in 2025. (CBC)

• Congratulations to Graphite One (TSXV: GPH) (OTCQX: GPHOF) which received a non-binding Letter of Interest from the Export-Import Bank of the United States for potential debt financing of up to $325 million through EXIM's "Make More in America" and "China and Transformational Exports Program" initiatives. (Cision)

• Also champagne popping for Australian Strategic Materials (ASX: ASM) which was awarded another $5m from the Australian government to support its Dubbo project. The company received $6.5m a year ago from the government and has received a non-binding Letter of Interest from the Export-Import Bank of the United States this year for up to US$600 million to support the construction of the project. Export Finance Australia has previously provided ASM a letter of support for $200 million in debt funding. (Government of Australia)

• A round of applause for Aftermath Silver (CVE: AAG) which secured a $10m private placement from Eric Sprott. The stock is up over 25% since the news broke which is partially attributable to the rise in silver prices, but other silver miners are generally up around 15% since the news broke. Sprott purchased the shares for 0.45 each and 5 days later it is trading for 0.58 a share. That means he has made a cool $2,888,888 in under a week, at least on paper. (Newsfile)

• Calibre Mining (TSE: CXB) issued its production guidance and revised downwards - it expects consolidated Gold Production/Sales of 230,000 ounces - 240,000 ounces compared to original guidance of 275,000 ounces - 300,000 ounces. The stock is down around 6% since the news broke but is still up a whopping 101.54% in 2024. (Global Newswire)

• Freeport-McMoRan (NYSE: FCX) reported Q3 earnings this week. Revenues for the quarter were up 17% compared to a year ago at $6.79bn. Profits came in at $526m which was up 16% compared to a year ago. The stock was up over 1% on the day and is up 44.82% this past year. (Freeport-McMoRan)

• First Quantum Minerals (TSX: FM) reported Q3 earnings yesterday after market close. The company reported a gross profit of $456m which is $123m higher than Q2, with net earnings at $0.13 per share. The company’s stock is still dogged by their issues in Panama, down around 37.5% from a year ago. (First Quantum Minerals)

MINING BITS

• 📑 Amnesty International published a report that assessed the top 13 EV makers human rights due diligence policies and self-reported practices. Long story, short, none of the 13 companies scored “adequate” according to Amnesty while only 6 scored moderate demonstration (Mercedes-Benz, Tesla, Stellantis, VW, BMW and Ford). GM & Renault scored minimal demonstration while another 5 scored “absence of alignment” or RED (Nissan, Geely, Hyundai, Mitsubishi & BYD). In last place was BYD with a score of 11 out of 90. What is clear, is that North American & European automakers are holding themselves to different standards than Asian automakers. Amnesty provides recommendations in the report for home states where the manufacturers are located, states where mineral extraction takes place as well as for the companies themselves. (Amnesty International Report Here)

• 🇦🇮 Back in the 90’s the tiny Caribbean island of Anguilla (pop. 14,638) was assigned the domain ending .ai. Countries were assigned domains based on their names. Well, Anguilla now generates about $32M per year from artificial intelligence companies that register .ai domains. It now accounts for 20% of the governments revenue. Quite the golden goose for Anguilla! (AP News)

• ⚛️ The International Atomic Energy Agency is launching a new Coordinated Research Project (CRP) to evaluate the remediation of mining wastewater using constructed wetlands and is inviting proposals from research institutions and mining companies. The “Optimizing mining wastewater remediation” research project will be conducted for 5 years. Research organizations interested in joining the CRP must submit their Proposals for Research Contract or Agreement by email, not later than 29 November 2024. More here —> (IAEA)

• 🇨🇦 The Canadian Broadcasting Corporation (CBC) takes a look at the town of Crowsnest Pass in Alberta and a potential metallurgical coal project that has divided the community. (CBC)

• 🛰️ Global consultancy firm BCG takes a look at how space-savvy CEO’s can leverage new technologies to improve operational performance. They specifically discuss mining and how integrated space-based services could potentially transform every stage of mining, from identifying deposits and processing ore to enhancing safety on mining sites. We liked the quote from Tom Butler, former CEO of the International Council on Mining and Metals and a current BCG senior advisor, who said, “The positional technology is so accurate that when they first started this, the trucks were creating ruts because they were going along exactly the same path each time. So, they had to introduce some kind of randomness into how the trucks went along.” (BCG)

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