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Results from near-pit exploration at Orla Mining’s (TSX: OLA) Camino Rojo gold mine in Mexico show strong potential for expanding resources and ultimately extending the current 10-year mine life, the company said Thursday.

The successful drilling program in the proposed layback area near the open pit mine demonstrates the potential to replenish some of the mine’s diminished gold by integrating additional surface oxide gold found nearby, Sylvain Guerard, Orla’s senior vice president, said in a news release.

Located north of the Camino Rojo mine, drilling in this area has confirmed historical results, showing consistent grade along the property boundary. Highlights include 1.09 grams gold per tonne over 21 metres to the west and 0.85 gram gold over 76 metres to the east.

The drilling beneath the current open pit has unveiled structurally controlled oxide mineralization about 50 metres below and 15 metres southeast of the current pit boundaries. Notable results here include 1.16 grams gold per tonne over 67.1 metres and 0.86 grams gold over 35.1 metres.

Earlier this week, Orla reported record production of 121,877 oz. gold from the mine in 2023, slightly above guidance of 110,000-120,000 ounces. It expects to produce 110,000-120,000 oz. from the mine this year at an all-in sustaining cost of $875-$975 per ounce. It has not yet disclosed the all-in sustaining cost figures for 2023 and is scheduled to release its fourth-quarter results on March 20.

The drill results are part of a 6,500-metre program Orla completed at Camino Rojo last year to explore for additional oxide mineralization. This included 2,500 metres in the adjacent Fresnillo property, or ‘Layback Area,’ and 4,000 metres targeting deeper oxide gold mineralization extensions beyond the current open pit.

Orla has secured a layback agreement with Fresnillo, allowing it to expand the Camino Rojo oxide pit into Fresnillo’s adjoining concession. This deal not only allows Orla to mine significant additional oxide and transitional heap leachable resources but also preserves Fresnillo’s rights to the future development of the sulphide resource. The deal is expected to notably increase Orla’s mineral reserves and enhance the mine’s value without requiring changes to the current infrastructure.

These results pave the way for the 2024 near-mine drill program, which is still being finalized.

BMO Capital Market mining analyst Andrew Mikitchook assigns an ‘outperform’ rating to Orla with a target price of C$7.50. Shares on Thursday closed 5.7% higher at C$4.47, having touched C$3.53 and C$6.90 over the past 12 months. It has a market capitalization of C$1.4 billion.

Mikitchook expects Orla to publish an updated resource before the end of June, which will incorporate drilling from the layback area for the first time.

“We remain cautiously optimistic following the high-grade intercepts located down-dip and underneath the open pit,” he wrote in a note to clients, adding the results demonstrated potential to extend the mine life.

Camino Rojo has measured and indicated oxide resources of 84.4 million tonnes grading 0.72 grams gold per tonne for 1.9 million oz. of metal. It also has a sizeable sulphide component of 258.8 million tonnes grading 0.88 grams gold per tonne for 7.3 million oz. of metal. Proven and probable reserves total 58.5 million tonnes at 0.74 gram gold per tonne for 1.4 million ounces.

Elsewhere in the portfolio, in December, Panama’s government rejected its request for permit extensions for the Cerro Quema gold project and cancelled the mining concessions by designating the area a reserve. Orla has halted further investment in Panama, where the government recently shut down First Quantum Minerals’ (TSX: FM) Cobre Panama mine.

Imperial Metals (TSX: III) reports that 2023 metal production from its Mount Polley copper mine near Williams Lake, BC, produced 30.1 million lb. of copper and 41,834 oz. of gold. Copper production was at the low end of guidance, but gold output exceeded the high end of its target.

The fourth quarter saw the damaged third ball mill returned to operation and approximately 1.6 million tonnes of ore were processed, up 44.6% from the same quarter a year earlier. The mill was returned to service in October after being damaged by a lightning strike during the second quarter.

Plant availability was improved to 88.3%, up 22% from the fourth quarter 2022. During the quarter, more than 8.3 million lb. of copper (up 120.5%) and 10,349 oz. of gold (up 48%) were produced. Throughput averaged 20,076 t/y for the third week of December.

For the year ended Dec. 31, 2023, the mill at Mount Polley treated 5.9 million tonnes of ore grading 0.287% copper and 0.311 g/t gold.

Imperial is also undertaking a program to remove tailings stored in the Springer pit, and it should be complete by the end of this quarter 2024. The tails were stored there temporarily after the tailings dam burst in August 2014.

Centamin (LSE: CEY; TSX: CEE) showcased a robust performance in 2023, achieving gold production of 450,058 ounces and successfully meeting its annual guidance for the third consecutive year.

For the current year, Centamin has outlined a production forecast ranging between 470,000 oz. and 500,000 oz. This outlook is driven by ongoing enhancements in output at its flagship Sukari mine in Egypt, capitalizing on a favorable gold price environment.

In the fourth quarter of the year, Centamin reported production of 128,127 oz., marking a 17% increase from 109,564 oz. in the corresponding quarter of 2022.

The company achieved quarterly revenue of $265 million, derived from the sale of 133,465 oz. of gold at an average realized gold price of $1,983/oz. sold. This represents a 41% surge compared to $188 million in the same period the previous year.

For the entire year of 2023, Centamin recorded revenue of $892 million, stemming from the sale of 456,625 oz. of gold at an average realized gold price of $1,948/oz. sold. This reflects a 13% rise from $787 million in 2022.

Centamin, which spent some $750 million over the past four years to improve efficiency at Sukari, Egypt’s only modern gold mine, plans to connect to the country’s electrical grid and company solar panels this year, alone cutting $41 million a year in diesel costs.

The company is exploring 3,000 sq. km. in the eastern desert area near the mine in search of new discoveries. It’s budgeting 15,000 metres of reverse circulation drilling for the new area, metallurgical testing, a conceptual resource estimate and an optimization study to steer drilling.

It posted first results Jan. 9, showing 46 metres grading 3.3 grams gold per tonne from 91 metres down drill hole LSRC030, and 77 metres at 1.84 grams from 44 metres depth in drill hole LSRC012 at the Little Sukari prospect 28 km west of the Sukari mine.

At the Umm Majal prospect 23 km west of the mine, drill hole UMRC006 cut 18 metres grading 2.33 grams from 21 metres depth and drill hole UMRC003 returned 15 metres at 1.46 grams from 4 metres down.

Sukari, with a projected mine life to 2035, holds 194 million proven and probable tonnes grading 1.23 grams per tonne for 7.7 million oz. of contained gold, the company said last month. The mine also holds 392 million measured and indicated tonnes at 1.06 grams per tonne for 13.4 million oz. of contained gold.

Shares in Centamin were up 4.5% in Toronto on Thursday morning. The company currently has a market capitalization of C$1.34 billion.

Shares in Bluestone Resources (TSXV: BSR) doubled after Guatemala approved a plan to change the contentious Cerro Blanco gold project to an open-pit operation from underground as the company considers selling it.

Bluestone stock traded at C$0.47 at midday Wednesday in Toronto, valuing the company at C$69.1 million. It has been within a 52-week window of C$0.18 to C$0.65.

The Vancouver-based company, which is 26% owned by the Lundin family trust, is proposing the $572 million project that environmentalists are fighting. Located near the border with El Salvador, it would produce 2.7 million oz. gold over 14 years, according to a feasibility study issued in early 2022. In July, the company began a review to sell its assets.

“After dedicating over two years to obtaining the environmental permit amendment, we are pleased,” president, CEO and chairman Peter Hemstead said in a release. “We will continue with our strategic review, and having the environmental permit in hand helps de-risk the project.”

Environmentalists contend the project, which Bluestone acquired from fellow Canadian miner Goldcorp in 2017 for C$18 million plus shares valued at roughly 9.9% of Bluestone, will pollute the Güija lagoon and Lempa river, the main water source for San Salvador, the Salvadoran capital.

Hemstead says the local community supports the project.

“The design for Cerro Blanco reflects safe and responsible mining practices and sustainable socio-environmental management that can contribute significant economic growth, infrastructure, training and job opportunities to Guatemala,” he said.

The project has an after-tax net present value of $1.1 billion at a 5% discount rate and an internal rate of return of 30%, according to the feasibility study. It also forecast output of 10.2 million oz. silver from processing 53.9 million tonnes of ore in a three-stage development.

The company review is considering the sale of part or all of its assets, a sale of the company and a merger or other business deal, the CEO said.

Bluestone’s environmental approval comes as new Guatemalan President Bernardo Arevalo was sworn in on Monday after a pro-democracy and anti-corruption campaign. Opponents in Central America’s most populous country tried to use the courts to prevent him from taking office after his landslide victory in August.

Elements of the military, the judiciary and conservative political parties attempted to annul the election and suspend Arevalo’s Semilla party. Although the party holds only 23 of the legislature’s 160 seats, a member was elected Congress president.

Bluestone plans to use dry stack tailings management and an independently monitored water treatment plant in Cerro Blanco’s open-pit configuration. Goldcorp, now part of Newmont (TSX: NGT; NYSE: NEM), drilled 43,000 metres on Cerro Blanco and built 3.4 km of underground works when it held the project.

Fortuna Silver Mines (NYSE: FSM) (TSX: FVI) is coming off a record year of gold production across its five operating mines, driven mainly by the Séguéla mine in Côte d’Ivoire which came online towards the end of the second quarter.

Total gold production in 2023 was 326,638 oz., a 26% increase on 2022. This includes 78,617 oz. coming from Séguéla during the second half of 2023. The biggest contributor was Yaramoko in Burkina Faso at 117,711 oz., followed by Lindero in Argentina at 101,238 oz.

In addition, base metals byproducts also reached record highs, with approximately 55.1 million lb. of zinc and 40.9 million lb. of lead, representing yearly increases of 19% and 18% respectively.

Silver production, however, saw a 15% decline to 5.9 million oz. due to decreased production at the San Jose mine Mexico following an illegal union blockade in the second quarter and operational challenges thereafter. In the end, silver output was 7% below the lower end of the 2023 guidance.

Still, on a gold-equivalent basis, Fortuna’s company-wide production including the base metal byproducts was a record 452,389 oz.

Looking ahead, the precious metals miner is expecting gold-equivalent production of between 457,000-497,000 oz. in 2024, for a projected increase of between 1-10% over last year.

The 2024 guidance comprises 343,000-385,000 oz. of gold, for a projected increase of between 5-18%, and 4.0-4.7 million oz. of silver, for a projected decrease of between 32-21%.

Cash cost is expected to rise by about 6-20% over the 2023 figures to between $935-$1,055/oz. gold-equivalent.

By midday Thursday, Fortuna’s stock plunged by 14.1% to C$4.12 apiece, for a market capitalization of C$1.2 billion ($920m).

A new gold-based sensor is able to detect pollution from ‘forever chemicals’ in water through luminescence.

PFAS or ‘forever chemicals’ are manufactured fluorine chemicals that are used widely in different industries—from food packaging to semiconductor production and car tires. They are non-degradable and accumulate in the environment. Concerns regarding the toxic pollution they cause, particularly in water, have been rising in recent years.

According to the researchers behind the development, current methods for measurement of these contaminants are difficult, time-consuming, and expensive. In addition to this, it’s hard to carry out the measurements on-site to aid containment and remediation, especially at (ultra)trace concentrations.

In a paper published in the journal Analytical Chemistry, the scientists present their prototype model which detects the ‘forever chemical’ perfluorooctanoic acid (PFOA). The approach uses luminescent metal complexes attached to a sensor surface. If the device is dipped in contaminated water, it detects PFOA by changes in the luminescence signal given off by the metals.

“The sensor works by using a small gold chip grafted with iridium metal complexes,” Zoe Pikramenou, a professor at the University of Birmingham who co-led the development of the sensor, said in a media statement. “UV light is then used to excite the iridium, which gives off red light. When the gold chip is immersed in a sample polluted with the ‘forever chemical,’ a change of the signal in the luminescence lifetime of the metal is observed to allow the presence of the ‘forever chemical’ at different concentrations to be detected.”

Pikramenou pointed out that, so far, the sensor has been able to detect 220 micrograms of PFAS per litre of water, which works for industrial wastewater, but for drinking water, they would need the approach to be much more sensitive and be able to detect nanogram levels of PFAS.

“Advanced imaging surface analyses are essential for the development of dedicated chemical nanostructures on customized sensor chips to ensure optimal performance,” Dan Hodoroaba, co-author of the paper and a surface and sensor scientist at Germany’s Federal Institute for Materials Research and Testing, said.

Pikramenou, Hodoroaba and their colleagues now intend to refine and integrate the prototype sensor gold chip to make it portable and more sensitive so it can be used on the site of spills and to determine the presence of chemicals in drinking water.

“PFAS are used in industrial settings due to their useful properties for example in stain-proofing fabrics. But if not disposed of safely these chemicals pose a real danger to aquatic life, our health, and the broader environment,” Pikramenou said.

“This prototype is a big step forward in bringing an effective, quick, and accurate way to detect this pollution, helping to protect our natural world and potentially keep our drinking water clean.”

Two former executives that worked at Fortescue’s clean energy initiatives, Michael Masterman and Bart Kolodziejczyk, have launched a start-up that aims to cut carbon emissions of the Australian iron ore sector without using the hydrogen and membrane technology backed by their former employer.

After raising $10 million this week in seed funding, led by venture capital firm Playground Global, the partners said they are ready to fund green materials-related research and development conducted by their firm Element Zero. 

Through the firm’s patented electro-reduction method, the start-up is already turning iron ore into “green iron” at laboratory scale. Using an alkaline solution and electric current, the method can separate pure iron from waste products present in the ore.

According to its founders, Element Zero’s patented process works well for the hematite ores that dominate the Australian iron ore industry and it can also be used with other metals, such as nickel.

Based in Perth and the north of Western Australia, the company is close to the world’s largest iron ore ports, from which about 55% of the world’s seaborne iron ore supply is exported. 

Element Zero plans to generate 5 million tonnes per year of iron ore feed, producing around 2.7 million tonnes of high purity iron.

“Our processing platform will, for the first time, allow cost-effective and scalable production of carbon-free metals crucial to the iron and steel and critical metals industries,”  founder and CEO Michael Masterman said in the statement.

“Support from Playground Global goes way beyond financial investment, and we are already in deep discussions about developing green iron and green silicon value chains in the US. We are also working with major iron ore miners and iron and steel companies globally,” Masterman noted.

Element Zero’s modular approach aims to address 8% of global carbon dioxide emissions from iron and steelmaking.

The company is commissioning a green iron pilot plant in the Perth suburb of Malaga, where 100 kg of iron ore will be fed into the process each day.

Australia’s Ionic Rare Earths (ASX: IXR) said on Thursday the government of Uganda had granted it a mining licence for the Makuutu heavy rare earths project in the East African nation.

The permit, the first large-scale mining licence awarded in Uganda, allows Ionic to engage in supply chain and offtake discussions. It also paves the way for the company to make a final investment decision, expected for later this year, with first production in 2026.

Located about 40 km east of the regional centre of Jinja and 120 km east of the capital city Kampala, the Makuutu project comprises six licences. The asset hosts heavy rare earth oxides, which are easily extracted by applying rudimentary extraction and processing methods, such as open pit mining and heap desorption, the company said.

Ionic Technologies International, a 100% owned UK subsidiary acquired in 2022, has developed processes for the separation and recovery of rare earths from mining ore concentrates and recycled permanent magnets. The unit is focusing on the commercialization of the technology, with a demonstration plant at Makuutu on track for production for Q1 2024.

The Ugandan Directorate of Geological Survey and Mines (DGSM) had previously backed the project.

“The formal award of the mining licence in Uganda reinforces the Makuutu Heavy Rare Earth project as one of the world’s largest and most advanced development-ready heavy rare earth element assets,” managing director Tim Harrison, said in the statement.

“Progress continues to be made at Makuutu’s Demonstration Plant, which will also be critical in de-risking the commercialization of the project through the production of value added, mixed rare earth carbonate for our partners to qualify and validate,” Harrison said.

The announcement comes after the company increased in December its stake in Rwenzori Rare Metals, owner of the project, from 60% to 94%. The company is also in talks with holders of the remaining 6% ownership.

Ionic Rare Earths expects the mine to run for a minimum of 35 years, producing a 71% rich magnet and heavy rare earth carbonate product basket, but said the asset presents significant potential for scale up through additional tenements. 

Shares in Ionic trade at A2.2¢, giving the company a market capitalization of A$103.6 million ($68m).

Montage Gold (TSXV: MAU; US-OTC: MAUTF) plans to start building its $712 million Koné gold project in Côte d’Ivoire late this year after an updated feasibility study nearly doubled its net present value.

The project 470 km northwest of coastal Abidjan, the West African country’s largest city, has a net present value of $1.1 billion at a 5% discount rate with a 31% internal rate of return, Montage said on Wednesday.

That compares with $746 million (46% less) at a 5% discount rate and 35% return in an April 2022 study. The new report is based on a gold price of $1,850 and versus $1,600 nearly two years ago. The new study benefits from including the Gbongogo Main deposit of 12 million indicated tonnes grading 1.45 grams gold per tonne for 560,000 oz. gold, Montage said.

“This change has materially de-risked the financial parameters of the project and demonstrates the significant impact of discovering higher grade satellite deposits,” CEO Rick Clark said in a release. “We will now focus on repeating this success as we advance the next near-term satellite deposits within the project, notably Diouma North and Petit Yao.”

Koné’s forecast construction cost rose 31% from $544 million in the 2022 study. The project may become Côte d’Ivoire’s largest gold mine with an average annual gold production of 349,000 oz. during its first three years at an all-in sustaining cost of less than $1,000 per oz. and a payback period of 2.6 years.

The 2,259-sq.-km property holds 174.3 million probable tonnes grading 0.72 gram gold for 4 million oz. contained gold, according to a new estimate this week. Koné may produce 3.6 million oz. gold over a 16-year mine life, Montage said.

All-in sustaining costs are forecast at $899 per oz. in the first three years and $998 over the life of the mine.

Overall life-of-mine capital costs increased 5% compared with the former report to $877 million although sustaining capital fell by $126 million, Montage said.

The company says it expects permits to be approved by October. It’s starting more drilling this month on Diouma North and Petit Yao. Diouma North is 2 km south of Gbongogo Main and less than 500 metres from the planned haul road. Recent drilling there cut 17.5 metres grading 2.75 grams, 11 metres at 2.21 grams and 14 metres at 2.16 grams.

Petit Yao, 3 km from the planned haul road, has shown drill results of 12 metres grading 4.15 grams, 6 metres at 10.82 grams and 3 metres at 15.51 grams, Montage said.

Defense Metals (TSXV: DEFN) has entered into a co-design agreement with the McLeod Lake Indian Band regarding development of its 100%-owned Wicheeda rare earth element (REE) project. The project is about 80 km northeast of Prince George, BC.

With a targeted annual production equivalent to almost 10% of current global REE production, the project has the potential to become a significant supplier of rare earth elements.

The agreement calls for Defense Metals and the band to collaborate on the design of the Wicheeda project to assure the band’s interests and priorities are addressed in the planning and design of future feasibility studies and environmental assessments.

Budgets and work plans will be developed co-operatively and incorporated into the process.

Defense Metals will also make an upfront payment to the McLeod Lake band to fund certain costs the band will incur in participating in review activities and support band members who seek post-secondary training in a mining-related field.

The McLeod Lake band has also agreed to participate in a non-brokered private placement by purchasing approximately 2.6 million common shares of Defense Metals for C$0.26 per share for a total of C$665,026.

The Wicheeda deposit contains measured and indicated resources of 342 million tonnes grading 2.02% total rare earth oxides (TREO), containing 699,000 tonnes of oxides. The inferred resource is 11.1 million tonnes at 1.02% TREO, containing 113,000 tonnes of oxides.

A feasibility study on the project is expected to begin later this year.

Sumitomo Metal Mining Canada is investing about C$14.5 million to gain a 9.9% interest in FPX Nickel (TSXV: FPX). Sumitomo will participate in a private placement, purchasing approximately 30.1 million FPX shares at a price of C$0.48 per share.

“This strategic investment by Sumitomo Metal Mining represents another significant technical validation of FPX’s Baptiste nickel project and underscores our view that Baptiste is a class-leading asset,” said Martin Turenne, FPX’s president and CEO.

“SMM is one of the world’s largest nickel producers, with peer-leading expertise in mining, processing and refining products in the stainless steel and electric vehicle battery supply chains. FPX is pleased to be one of SMM’s preferred partners as they look to expand their nickel production profile and diversify their supply chain to allied partners in North America.”

FPX owns 100% of the Baptiste nickel project in the Decar nickel district of British Columbia, northwest of Fort St. James. This is a large greenfield discovery of naturally occurring awaruite (Ni3Fe). Similar mineralization has been identified in several target areas, but the Baptiste deposit is the most advanced, having reached the prefeasibility phase.

The prefeasibility study completed last year gave the project an after-tax net present value with an 8% discount of C$2.75 billion. The after-tax internal rate of return is 18.6% using a nickel price of $8.75/lb.

FPX intends to use the proceeds of this private placement for exploration and development ‎‎activities at the ‎project, continuance of ‎‎ongoing environmental baseline activities, feasibility study readiness activities, and ‎‎general corporate and administrative purposes.

The private placement is expected to close on Jan. 22, 2024, subject to certain customary conditions.

Seabridge Gold (TSX: SEA) (NYSE: SA) has taken steps to ensure that the environmental permit for its KSM copper-gold project in British Columbia’s Golden Triangle would remain in effect beyond its expiration date.

On Wednesday, its wholly owned subsidiary KSM Mining applied to the BC Environment Assessment Office for a ‘substantially started’ status, which, if approved, would make KSM’s environmental assessment certificate (EAC) valid for the life of the project, ranked the largest gold project in the world.

The BC Environmental Assessment Act stipulates that an EAC will expire if a project has not been substantially started by the deadline specified in the certificate. In KSM’s case, the deadline is July 29, 2026.

However, the province’s minister of environment and climate change strategy may determine that a project has been ‘substantially started’ before this deadline, in which case the EAC will remain in effect beyond that date.

In determining whether a project has been substantially started, the minister assesses on a project-specific basis whether sufficient permanent on-site physical improvements have been completed to warrant the designation. Examples of BC mining projects designated as ‘substantially started’ include Galore Creek, Kemess and Kitsault.

“We look forward to working with the BC EAO and First Nations on the review of our application. The permanent physical improvements we have made to the KSM site are truly impressive,” Seabridge CEO Rudi Fronk said in a press release.

“Since launching our early construction program three years ago, a proposed mine development that only existed on paper is now taking physical shape on the ground with roads and bridges, permanent living facilities for our personnel, hydroelectric power infrastructure and new fish habitat compensation projects.”

In the press release, Seabridge noted that it has spent over C$997 million since acquiring the project in 2001, of which C$805 million has been spent after the issuance of the EAC in July 2014. Since 2021, when it made the decision to commence early construction activities, C$444 million has been spent on project construction, focusing on the development of permanent infrastructure on site.

According to the Canadian miner, the KSM project represents a multi-generational mine boasting the third largest undeveloped copper resource in the world as well as the largest gold resource. A 2022 preliminary feasibility study (PFS) estimated KSM’s proven and probable reserves at 7.3 billion lb. of copper and 47.3 million oz. of gold.

Construction of the copper-gold mine is expected to take five years, followed by an environmental assessment approved production of 33 years, averaging 178 million lb. of copper and 1 million oz. of gold per year.

The project is located about 65 km north of Stewart, 20 km northwest of the now-closed Eskay Creek mine and 30 km northeast of the Alaska border.

Shares of Seabridge Gold fell by 1.6% as of 1:30 p.m. ET. The North America-focused miner has a market capitalization of C$1.2 billion ($890m).

Gold fell to its lowest in a month on Wednesday following hawkish comments from a US Federal Reserve policymaker who tamed expectations of an imminent rate cut, sending both the dollar and Treasury yields higher.

Spot gold dropped 1.1% to $2,004.78/oz. by noon ET, its lowest in 2024 after starting the new year around the $2,065/oz. level. US gold futures were also down 1.1% to about $2,007.50/oz.

[Click here for an interactive chart of gold prices]

In the opposite direction, the US dollar index hovered at a one-month high following Fed Governor Christopher Waller’s comment that the central bank should not rush to cut rates until lower inflation can be sustained. Yields on the benchmark 10-year Treasury notes also gained.

“The markets are having doubts about interest rate cuts if the Fed can cut sooner than later, which is pressuring gold prices. With the dollar being strong and cuts taking time, it is hard for gold to hold a rally,” said Bob Haberkorn, senior market strategist at RJO Futures, in a Reuters note.

“However, geopolitical risk will keep providing a base to prices and hold them around $2,000,” he added.

Traders are now pricing in around a 61% chance of a rate cut in March, compared to around 73% before Waller’s comment, according to CME FedWatch tool.

While a March rate cut is less likely than before, the general expectation remains that the US central bank will begin lowering interest rates in 2024, boosting the long-term outlook for gold.

(With files from Reuters)

Vale is considering reappointing Eduardo Bartolomeo for a second term as CEO with a shorter duration.

According to Valor Econômico, this is one of the alternatives being considered in ongoing discussions regarding the succession at the mining giant, involving shareholders and the government of President Luiz Inácio Lula da Silva.

As the Brazilian newspaper reported, the federal government is attempting to place former Brazilian Minister of Finance Guido Mantega as a Vale executive director.

The current term of Bartolomeo is three years, and there is a possibility of renewal for a shorter period.

The federal government is said to have agreed to the “abbreviated” extension of the current term, with the “counterpart” being Mantega taking the seat at Previ, the pension fund for Banco do Brasil employees and a Vale shareholder, on the company’s board of directors.

A board meeting at Vale is scheduled for January 31.

According to the company’s governance rules, Bartolomeo must be informed whether he will remain in the position four months before the contract expires at the end of May.

This means that the board needs to make the announcement by the end of January.

Executive Luis Henrique Guimarães from the producer of bioethanol, sugar, and energy Cosan Group is also among those considered to take over leadership of the mining company.

His name is supported by Rubens Ometto, owner of Cosan, which acquired a stake of around 5% in Vale in 2022.

Still, according to Valor Econômico, Mantega’s name continues to carry weight among federal government leaders.

In addition to Cosan, Vale has shareholders such as Black Rock and Capital, and Previ. Mitsui and Bradespar, the investment arm of the Brazilian bank Bradesco, are also shareholders.

According to Valor Econômico, the federal government seeks to approach large companies that have a decarbonization agenda, as is the case with Vale.

Vale has been discussing potential green hydrogen projects with Petrobras and is also in talks with the National Bank for Economic and Social Development (BNDES) to create an investment fund to finance critical mineral projects.

Read More: Vale’s $10 billion spend on Canada targets existing potential

Chilean miner Antofagasta (LON: ANTO) on Wednesday reported a 2% increase in annual copper production last year to 660,600 tonnes thanks to strong performances by its largest mines, Los Pelambres and Centinela.

The company, which operates four copper mines in Chile, said output at Los Pelambres increased after overcoming water supply issues at the operation, which is in the midst of a multi-billion dollar expansion.

Water is needed in copper smelting, and in the concentrator, which breaks down raw ore and processes it into usable material.

Chief executive Iván Arriagada said the company is finalizing the delivery of the Phase 1 expansion project at Los Pelambres, which will help to maintain the asset’s future production. 

Arriagada highlighted the recent approval of a second concentrator at Centinela, which will provide an additional 170,000 copper-equivalent tonnes of production.

He also mentioned the acquisition of a 19% interest in Peruvian copper producer Buenaventura (NYSE: BVN), which has seven mines in the home country. The precious and base metals producer also holds a 19.58% interest in Cerro Verde, one of the world’s largest copper mines, in a partnership with Freeport-McMorRan and Sumitomo.

Antofagasta, majority-owned by Chile’s Luksic family, one of the country’s wealthiest, kept its full year production forecast for 2024 unchanged. It expects to produce 670,000-710,000 tonnes of copper and 195,000-210,000 gold ounces this year. That compares to 660,000 tonnes of copper in 2023, reflecting a successful planned increase in production.

Copper prices continued to show stability last year and Antofagasta expects that given the metal’s fundamental role in the energy transition and electrification, prices will remain solid in the long-term.

Analysts at BMO Capital Markets concur. “We believe that improving copper markets over the next few years and the highest production growth in our coverage will allow for EBITDA to double,” they wrote in a note.

Estimates predict a shortage of the metal starting this year as some factors have reduced the available supply. Panama shut down First Quantum’s (TSX: FM) mine, which produces 350,000 tonnes of copper, and two major producers, Anglo American (LON: AAL) and Vale Base Metals (NYSE: VALE) cut their output estimates for 2024 and 2025.

New research out of ETH Zurich suggests that certain features of the tailings dam at Vale’s Corrego do Feijao iron ore mine in Brumadinho, southeastern Brazil, may have been the cause of the burst that released 10 million cubic metres of liquefied tailings, destroyed neighbouring settlements, took a railway bridge with it and killed at least 270 people.

In a paper published in the journal Communications of Earth and Environment, the scientists deal with the uncertainty that remained as to why the dam broke in 2019 specifically – three years after the pond was last loaded with new tailings, and why no significant displacements had been detected before the collapse.

The article explains that the tailings pond was built in 1976. Over the following years, its earth dam was raised several times by a few metres, as is customary in ore mining, to create additional space for the storage of residues. The dam’s steps were placed with an offset on top of each other, much like the steps of a staircase. Ultimately, the dam consisted of 10 steps and was 86 metres tall.

When the structure failed, the initial rupture occurred at the second dam level. As a result, all 10 steps of the earth dam collapsed and, together with the liquefied accumulated tailings, ran out down into the valley as a mudslide.

According to the new findings, some initial slip surfaces had already appeared at the height of the second step as the dam was being built. With the progress of construction, these slip surfaces increased in length but remained too short to cause a collapse. However, after the tailings dam was decommissioned in 2016, these surfaces continued to expand horizontally and eventually reached a critical length. As a result, the layers of tailings began to move, causing the dam to burst under their weight.

The numerical and analytical models employed by the researchers show that what caused the slip surface to grow is known as creep deformation. These deformations in the fine-grained, brittle tailings are tiny, slowly accumulating displacements caused by uneven pressure distribution between the grains in the overlying deposits. 

“Other triggers such as rainfall and drilling can accelerate slip surface growth,” head researcher Alexander Puzrin said in a media statement. “But our model shows that creep deformation alone is sufficient for the slip surface to reach the critical extent that can trigger a dam failure.”

In Puzrin’s view, the findings are worrying in two respects: the slip surface that caused the disaster apparently grew at a time when the pond was no longer being loaded with new tailings – in other words, without any additional external load – and the growth of the slip surface did not lead to any significant external deformation of the dam that the monitoring system could have recognized as alarming.

The ETH study also shows that no longer loading a pond with new tailings may not avert the danger, as expected by the Brazilian government with its decision to decommission upstream tailings dams following the Brumadinho disaster.

The paper, however, opens up new options. 

“Our model can carry out a risk analysis for existing dams and predict the likelihood of a dam failure,” Puzrin said. 

The expert pointed out that the risk can be reduced by pumping the water from the boreholes in the tailings ponds. Or the tailings dam can be dismantled. In urgent cases, endangered villages can be temporarily evacuated to protect the inhabitants until the danger has been averted.

“Our findings provide an indication of how to further improve the safety of earth dams in the event of an earthquake, which can generate an initial slip surface. In this respect, our work helps to make dams safer in general,” the researcher said.

Albemarle (NYSE: ALB) said on Wednesday it would cut jobs and defer spending on projects, including a massive refinery project in South Carolina, as part of a wide-ranging plan to slash costs in light of falling lithium prices.

The world’s top producer of the battery metal said it plans to spend $1.6 billion to $1.8  billion in 2024, down from about $2.1 billion it invested last year.

“The actions we are taking allow us to advance near-term growth and preserve future opportunities as we navigate the dynamics of our key end-markets,” chief executive Kent Masters said in the statement. “The long-term fundamentals for our business are strong and we remain committed to operating in a safe and sustainable manner.”  

The US-based lithium producer noted it would finish the commissioning of several lithium refineries in China and Australia, which are almost fully built. The company also said it would focused on securing the necessary permits to reopen its Kings Mountain lithium mine in North Carolina.

The asset contains one of the few known hard rock lithium deposits in the US. According to Albemarle, the operation would feed sufficient material for 50 kt LCE of conversion capacity and support the manufacturing about 1.2 million electric vehicles a year initially.

In all, Albemarle expects to save $95 million annually with the measures announced today, of which $50 million will come this year.

The number of people expected to be laid off because of these measures was not disclosed. 

Supply of the battery metal over the past year outpaced demand, causing an oversupply that caused a collapse in prices last year.

While lithium prices vary by region and type, most indexes, including the one tracked by Fastmarkets and Benchmark Mineral Intelligence, have dropped by more than 80% over the past year. 

Experts expect prices for the lightweight material, key for making the batteries that power EVs and high-tech devices, to keep dropping.

Lithium carbonate fell by 1.05% on Wednesday on the Shangai Metals Market,  closing at 103,800 yuan per tonne or about $14,556 per tonne. This represents a nearly 11% price plunge over the past month alone.

The lithium giant is also seeking to sell its stake in Australia’s Liontown Resources (ASX: LTR) after billionaire Gina Rinehart’s company Hancock Prospecting blocked in October its A$6.6 billion ($4.3bn at today’s rates) takeover bid.

Albemarle has priced the roughly 96 million shares it holds in the Australian lithium developer at around A$121 million in a block trade run by JPMorgan, a term sheet showed on Wednesday.

The offer price of A$1.26 to A$1.32 per share is a discount of 7.4%-2.9% to Liontown’s last traded price of A$1.36 on Wednesday. Shares had closed as high as A$3 in the days prior to Albemarle’s bid withdrawal.

Perth-based Liontown confirmed Albemarle’s intentions to local media.  The company owns one of the most promising early-stage lithium projects in Australia, Kathleen Valley, located 680 km north-east of Perth in Western Australia’s premier mining district.

Kathleen Valley is considered one of the world’s largest and highest-grade hard rock lithium deposits with a mineral resource estimated at 156 million tonnes at 1.4% lithium oxide and 130ppm tantalum oxide.

The project, on track to begin commercial production in mid-2024, is forecast to initially produce around 500,000 tonnes a year of spodumene concentrate expanding to 700,000 tonnes annually in six years.

Liontown already has supply agreements with Tesla and Ford Motor, as well as with South Korean-based LG Energy Solution.

Hancock Prospecting is now the lithium junior’s largest shareholder with a 19.9% stake. 

Rinehart owns shares in other lithium producers such as Patriot Battery Metals (ASX, TSX: PMT) and Delta Lithium (ASX: DLI), but the main focus of her investment is iron ore.

A range of sustainability and ESG forces will shape the business of mining in 2024, building on the trends of 2023, a year characterized by a surge in investor scrutiny, regulatory action, and a significant uptick in mining sustainability performance expectations.

Against the backdrop of continued geopolitical and inflationary pressures, 2023 saw some ESG backlash influence investor narratives in certain jurisdictions, though less so their practices. ESG took the top spot again in key mining industry risk reports, while community protests and governance issues made news in regions worldwide, many based on ESG issues. Globally, we saw a growing entrenchment of ESG and corporate sustainability principles in expectations of how the industry conducts its business.

For 2024, the World Economic Forum’s managing director has forecasted “an unstable global order characterized by polarizing narratives and insecurity, the worsening impacts of extreme weather, and economic uncertainty.” This sets the stage for what promises to be an unpredictable year, with environmental and social issues remaining a core focus. We know that spotting trends to inform strategic action can be challenging, so here are our top 10 mining ESG trends that mining companies should take note of and take action on in 2024.

1. Net-Zero Acceleration. Climate change risk and decarbonization are likely to remain a key focus in 2024. Net-zero commitments are becoming a standard expectation, and industry leaders are moving from covering only scope 1 and 2, to also include scope 3. According to Net Zero Tracker, half of the world’s largest companies have now adopted net zero targets, though doubts remain about how attainable they are. Investors will increasingly pressure companies to demonstrate adequate and credible climate plans.
2. Beyond Carbon: Biodiversity Rising. With incontrovertible evidence of the vicious circle that interlocks climate change and nature loss, biodiversity is now a rapidly rising topic. This shift is driven by a growing awareness of the scope of crisis before us and the associated material risks to business and society. The year will see leading companies begin to align with the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations, which aim to integrate nature into financial decision-making and disclosure.  
3. Tailings Management A Critical Focus. Tailings management, having entrenched its position in the investor spotlight in 2023, will remain a key focus. After ICMM members’ first disclosure on alignment with the Global Industry Standard on Tailings Management (GISTM) last year, there will be escalating pressure on the rest of the industry to follow suit, with the new Global Tailings Management Institute (GTMI) spearheading enforcement, assurance, and oversight. Rapid commercialization of a range of technological advancements will help companies move towards more responsible management, too.
4. Practical EDI Gaining Ground. Mirroring a global shift towards workplace inclusivity, the mining sector will make further progress on Equity, Diversity, and Inclusion (EDI, or DEI) initiatives in 2024. The new TSM Equitable, Diverse, and Inclusive Workplaces Protocol and ICMM member DEI position statement and commitment have spurred renewed focus and action, as the industry acknowledges the need for greater efforts to tackle its ongoing workforce and talent management challenges.
5. Standardization of ESG Reporting for Capital Markets. The widespread adoption of the IFRS Foundation’s new disclosure standards will transform voluntary sustainability reporting in 2024. The IFRS has now taken over responsibility for the Sustainability Accounting Standards Board (SASB) and the Task Force on Climate-related Financial Disclosures (TCFD), both well-known by investors. The new, single, global baseline of sustainability disclosures designed for capital markets will rapidly become the global reference for ESG disclosure, expected to bring much-needed consistency and comparability.
6. Global Regulations Require Adaptation. A wave of new and updated sustainability regulations is sweeping across the globe, and mining will face the challenge of adapting to new regulatory requirements across various jurisdictions, especially those linked to the EU. High-profile emerging mandatory regulations include disclosure on climate change and modern slavery in multiple jurisdictions and broad standardized non-financial reporting in the EU. Meanwhile, at least 64 jurisdictions are analyzing how to integrate the IFRS Foundation disclosure standards in their regulations. 
7. Surging Investor Demands and Shareholder Activism. Echoing global public sentiment, investors will continue to ramp up pressure for robust ESG performance and transparency. A 2023 KPMG survey found that over half of M&A dealmakers have cancelled deals due to material findings of an ESG due diligence process. And headlines such as Glencore’s climate plan being rejected by investors, attempts to sue Shell directors personally for climate risk mismanagement, and the Global Investor Mining Commission on Mining 2030 announcing strong support from investors with US$11 trillion in assets under management signal a clear trend. Meanwhile, a recent proxy firm policy survey shows the “double materiality” debate continues, but climate-related risk disclosure will be central to investor demands and shareholder activism. TCFD alignment is becoming a standard expectation in the face of increasingly frequent and severe extreme weather events worldwide.
8.  Growing Executive and Board Competency Risk. Surveys from PwC, BCG, and the INSEAD Corporate Governance Centre during 2023 found that only 27-47% of board directors understand ESG risks and have sufficient ESG competence, on topics ranging from climate change to human rights and EDI. Such findings expose a growing disconnect between evolving investor expectations of fiduciary duty and oversight, and the ESG capabilities of directors and company leaders. ESG upskilling to ensure effective management and governance is expected to be a priority for many companies in the year ahead.
9. Technological Innovation Enabling Performance and Assessment. Technological innovations are likely to play a key role in advancing sustainability priorities. Current commercialization of relevant technologies ranges from the use of AI and data analytics to assess and oversee ESG performance, manage cybersecurity risks, and support health and safety outcomes, to innovative solutions for resource optimization and tailings management (e.g. biomining, bioremediation, waste-to-value, satellite and other real-time monitoring). Along with innovations in materials movement and renewable energy solutions including hydrogen and solar, we are likely to see more rapid innovation foster improved sustainability outcomes and assessment.
10. Focus on Sustainable and Responsible Supply Chains. Many companies mapping their supply chains in response to pressure to do so, are struggling immensely. Yet further progress in responsible sourcing and supply chain transparency is likely, given regulatory trends and amplified investor expectations to focus on sustainability across the entire value chain. This year will see many companies venture into understanding their Scope 3 emissions and human rights risks especially.

As the work and disclosure of sustainability continue to mature, rumblings of ESG fatigue and discontent continue too, with some starting to favour the language of “responsible business” instead.  Either way, the core principles of prioritizing risk management, responsible governance, and resilience stand firm; embedding sustainability in how we mine and invest is a trend set to persist despite rising polarization and politicization, war and contentious elections, and unpredictable market behaviour in 2024.

Many mining companies will continue to grapple with increasing ESG performance and reporting expectations, but this will also offer strategic opportunities. The ESG commitments of both investors and miners will be tested in the year ahead. Those who deploy the principles underpinning ESG in risk management and business strategies will better position themselves to strengthen both social licence and financial performance.

To help readers navigate the complexities of the mining ESG landscape in the year ahead, Sympact has compiled a complimentary report: Mining ESG: 2023 in Review and What to Expect in 2024. 

Rachel Dekker and Elizabeth Freele are the co-founders and managing partners of mining sustainability think tank and ESG consultancy Sympact. Sympact supports companies in ensuring their social performance meets growing expectations through advisory services, ESG training, and thought leadership.

Teck Resources (TSX: TECK.A, TECK.B; NYSE: TECK), Canada’s largest diversified miner, said its copper and zinc mine operations faced a number of challenges through 2023, resulting in the production of these metals falling short of its annual guidance.

Copper production came to tonnes, while its guidance for the year had been for between 320,000 and 365,000 tonnes.

Production was impacted by a slower ramp-up at the QB2 operation in Chile, which was plagued with cost overruns, and by a geotechnical fault at its Highland Valley copper operation in British Columbia that has now been stabilized.

Zinc in concentrate production of 644,000 tonnes was marginally below the low end of guidance of between 645,000 and 685,000 tonnes as a result of weather-related issues in the first quarter and equipment failures at the Red Dog mine, Teck said in the statement.

Refined zinc production of 266,600 tonnes was below guidance of  between 270,000 and 290,000 tonnes due to weather-related impacts in the first quarter as well as concentrate supply issues in the third quarter and beginning of the fourth quarter, it added.

Meanwhile, at Teck’s steelmaking coal business unit, production was higher than previously disclosed guidance. Steelmaking coal production of 23.7 million tonnes was higher than the top end of guidance due to strong performance in the fourth quarter and improvements in capital expenditure guidance for 2024, Teck said.

Uranium-focused Denison Mines (TSX: DML; NYSE: DNN) and lithium explorer Grounded Lithium (TSXV: GRD) have signed a deal that bets on low-cost extraction methods in Saskatchewan.

The agreement gives Denison the option to earn up to a 75% interest in Grounded’s Kindersley lithium brine project in western Saskatchewan, the companies said in a joint news release on Tuesday. Denison, focused on uranium further north in the Athabasca Basin will pay up to C$15.1 million for the interest, in cash payments of up to C$3.1 million. It will also fund project costs of up to C$12 million through an earn-in option.

Grounded Lithium shares were up 33% at C$0.10 apiece at mid-day in Toronto on the option deal, valuing the company at C$7.6 million. Its shares have traded between C$0.07 and C$0.50 over the past year.

The cash is expected to offer more than enough funding for a field pilot at the Kindersley lithium project (KLP) that both companies plan to advance. Kindersley, located just north of the namesake town near the Alberta border, sits on top of the Leduc/Duperow formations that underlie the Prairie provinces.

“This is very significant for us in terms of helping us unlock the value of our project,” Grounded CEO Gregg Smith told The Northern Miner in an interview. “Denison is also doing first-of-a-kind uranium mining in Saskatchewan, where they’re doing in-situ extraction of uranium. That really reduces the cost. It’s a very innovative approach to it and it will be first of its kind in Canada. It kind of goes to the heart of what their company is.”

Denison CEO and president David Cates said in a statement the company views lithium as a complementary mineral to Denison’s core uranium business, with both identified as critical minerals for the clean energy transition.

“Combining our deep local technical capabilities with the Grounded team’s experience on KLP has the potential to create an incredible environment to incubate the KLP to emerge as a premier lithium project in a top mining jurisdiction,” he said.

The investment from Denison comes as momentum builds for lithium brine projects on the Prairies, despite a drop in lithium prices, with Grounded having released a strong preliminary economic assessment (PEA) for Kindersley last July that showed it could produce 11,000 tonnes of lithium hydroxide over a 20-year life. EMP Metals (CSE: EMPS) is also advancing a lithium brine project in Saskatchewan, along with E3 Lithium (TSXV: ETL) and Volt Lithium (TSXV: VLT), in neighbouring Alberta.

Denison’s investment in lithium comes as prices for the battery metal have tanked, while prices of its principal commodity, uranium, have risen to highs not seen since 2007. On Monday, the spot price hit $103 per lb. The price increase is being driven by rising demand for nuclear energy projects and limited supply.

Denison is also emerging as a potential pioneer of in-situ recovery (ISR) mining in the Athabasca Basin, after a final set of field tests last November showed it could be successfully deployed on a commercial scale at the Wheeler River project. ISR involves pumping a solution underground, where it separates uranium from the ore and is later pumped back to the surface. It costs less than underground mining, doesn’t require digging pits and has a smaller environmental footprint.

In that test, Denison recovered 14,400 lb. of uranium oxide (U3O8) in solution in the leaching and neutralization phases, and recovered over 99.99% of the contained uranium in the solution management phase. Previous tests going back to 2019 also returned positive results, including one in 2022 that Denison called ‘history in the making.’

While both processes involve pumping a solution to the surface, Grounded uses direct lithium extraction to draw lithium-containing brine from old oil wells underground. The extracted solution is purified in a surface plant to bring out the high-grade lithium carbonate and lithium hydroxide.

Canaccord Genuity analyst Katie Lachapelle told The Northern Miner that if Denison successfully obtains its permits to mine, Wheeler River could open up new possibilities for uranium projects.

“It’ll unlock a lot of 20, 50, 60 million lb. deposits in Canada that otherwise wouldn’t have been considered super economic, or that you wouldn’t want to put the capital into building a shaft. So, I think it’s a game changer,” she said.

Kindersley’s first phase has an after-tax net present value (at 8% discount) of $1 billion, an internal rate of return of 48.5% and at initial capital costs of $335 million, with a payback period of 3.7 years.

KLP hosts 586,044 measured tonnes of lithium hydroxide, 525,651 indicated tonnes and 3.6 million inferred tonnes, all grading at 74 mg of lithium per litre.

The new deal entails Denison increasing its cash payments to Grounded from C$800,000 in the first phase of Kindersley to C$3.1 million in the third, in line with an increase in Denison’s interest from 30% to 75%. Expenditures for the project will generally be wholly funded by Denison.

The agreement will last until Denison opts to acquire its working interest and convert it to a formal joint venture, or until either June 30, 2028 or another date agreed by the companies.

Denison has also bought a 5% gross overriding royalty on KLP for C$800,000, which would drop to 2% after all approvals for the project are received, and be removed entirely 15 months after the earn-in agreement closes.

The two companies have established an area of mutual interest for any lands acquired within 10 km of any properties contained within Kindersley that are prospective for lithium.

“Their investment is helping us de-risk by putting in place the pilot,” Smith said. “That allows us to fine tune our engineering studies and produce the feasibility so then we can start to march forward towards commerciality.”

Denison shares were down 2.1% to C$2.74, giving it a market capitalization of C$2.4 billion. Its shares traded between C$1.28 and C$2.82 over a 52-week window.