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Glencore to sell stake in troubled New Caledonia nickel operation

Mon, 02/12/2024 - 03:48

Glencore (LON: GLEN) said on Monday it will close and sell its stake in the loss-making Koniambo Nickel SAS (KNS) business it co-owns in New Caledonia, as a sharp drop in the metal’s prices continues to hit the industry.

The Swiss miner and commodity trader said it would look for a new partner for the nickel mine and processing plant in the French territory, adding that it would leave the operation ready for a quick reopening if a new investor is found.

Glencore is also seeking to sell its 49% stake in the company, KNS said in a separate statement.

Prices for the metal used in stainless steel and electric-vehicle batteries have almost halved over the past year, seriously affecting producers. 

Wyloo Metals Pty Ltd., the nickel company owned by mining magnate Andrew Forrest, announced in January that it was closing its Western Australian mines. Other major players like BHP (ASX: BHP) and First Quantum Minerals (TSX: FM) are also suffering, while many smaller miners have stopped building or gone into administration.

“The pressures in the global nickel market are becoming increasingly apparent,” Colin Hamilton, managing director for commodities research at BMO Capital Markets, wrote in a note at the end of January.

“We have noted that further temporary or permanent capacity cuts were required to balance the nickel market following last year’s surplus, but it is yet to be seen whether sufficient adjustment has taken place,” Hamilton said.

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The French government, which has authority over New Caledonia, has been considering a rescue plan for the the islands’ nickel sector, including emergency loans. Paris has proposed to reduce the energy bills by around 200 million euros ($215 million) per year, but talks will continue until the end of February.

“For over ten years, Glencore has been the primary funder of KNS without ever realizing a profit,” Glencore said in the statement. “Even with the French government’s proposed assistance, high operating costs and current very weak nickel market conditions means KNS remains an unprofitable operation.”

According to Glencore, KNS has contributed $5.6 billion in economic benefits to New Caledonia since 2012 from construction ($1.7 billion) and operations ($3.9 billion), including $3 billion spent on goods and services and payment of $950 million in local salaries.

Glencore said last year it would stop financing Koniambo by the end of this month. The Baar, Switzerland- based mining giant, which originally planned to keep its stake in the operation, proposed mothballing the facility and shifting to nickel ore exports instead.

The move would make even more waves in the battered sector. Not only it would cost about 1,300 local jobs, but it would also increase Asia’s dominance over the nickel supply chain after the growth of processing capacity in China and Indonesia.

Glencore has committed to keep all KNS employees for a period of six months to aid in the transition.

New method could simplify detection of diamond deposits

Sun, 02/11/2024 - 06:06

Geologists from ETH Zurich and the University of Melbourne have established a link between diamond occurrence and the mineral olivine.

In a paper published in the journal Nature Communications, the scientists explain that their method will simplify the detection of diamond deposits. The process relies on the chemical composition of kimberlites, which occur only on very old continental blocks that have remained geologically unchanged for billions of years, predominantly in Canada, South America, central and southern Africa, Australia and Siberia.

According to the study’s lead author, Andrea Giuliani, olivine is a mineral that makes up around half of kimberlite rock and consists of varying proportions of magnesium and iron. The more iron olivine contains, the less magnesium it has and vice versa.

“In rock samples where the olivine was very rich in iron, there were no diamonds or only very few,” Giuliani, who has been studying the formation and occurrence of the gemstones since 2015, said in a media statement. “We started to collect more samples and data, and we always got the same result.”

His investigations ultimately confirmed that olivine’s iron-to-magnesium ratio is directly related to the diamond content of the kimberlite. Giuliani and his team took these findings back to De Beers, who had provided them with the kimberlite samples. The company was interested and provided the scientific study with financial support and asked the researchers not to publish the results for the time being.

A slow, repetitive process

In 2019, Giuliani moved from Melbourne to ETH Zurich and, supported by the Swiss National Science Foundation, began to look for explanations for the connection between olivine’s magnesium and iron content and the presence of diamonds.

With his new colleagues, he examined how the process of metasomatism, which takes place in the earth’s interior, affects diamonds. In metasomatism, hot liquids and melts attack the rock. The minerals present in the rock react with the substances dissolved in the fluids to form other minerals.

The geologists analyzed kimberlite samples that contained olivines with a high iron content—and hence no diamonds. They discovered that olivine becomes richer in iron in the places where melt penetrates the lithospheric mantle and changes the composition of mantle rocks significantly. And it is precisely in this layer, at a depth of around 150 kilometres, that diamonds are present.

The infiltration of the melt that makes olivine richer in iron destroys diamonds. If, on the other hand, no or only a small amount of melt from underlying layers penetrates the lithospheric mantle and thus no metasomatism takes place, the olivine contains more magnesium—and the diamonds are preserved.

“Our study shows that diamonds remain intact only when kimberlites entrain mantle fragments on their way up that haven’t extensively interacted with previous melt,” Giuliani said.

A key point is that kimberlites don’t normally reach the earth’s surface in one go. Rather, they begin to rise as a liquid mass, pick up fragments of the mantle on the way, cool down and then get stuck. In the next wave, more melt swells up from the depths, entrains components of the cooled mantle, rises higher, cools, and gets stuck. This process can happen multiple times.

“It’s a real stop-and-go process of melting, ascent and solidification. And that has a destructive effect on diamonds,” Giuliani noted. If, on the other hand, conditions prevail that allow kimberlites to rise directly to the surface, then this is ideal for the preservation of the gemstones.

De Beers is already using olivine analysis

Olivine analysis is as reliable as previous prospecting methods, which are mainly based on the minerals clinopyroxene and garnet. However, the new method is easier and faster: it takes only a few analyses to get an idea of whether a given kimberlite field has diamonds or not.

“The great thing about this new method is not only that it’s simpler, but also that it finally allows us to understand why the previous methods worked,” Giuliani said. “De Beers is already using this new method.”

Argentina, US strengthen ties concerning critical minerals

Sun, 02/11/2024 - 05:56

The Argentine Chamber of Mining Companies (CAEM) and the United States Assistant Secretary of State for Western Hemisphere Affairs, Brian A. Nichols, met in Buenos Aires to discuss possible cooperation avenues when it comes to critical minerals.

“At the meeting, we discussed current events related to the mining industry and also how to foster a mutual collaboration for the growth and expansion of the mining sector, placing Argentina as a strategic actor,” CAEM said in a media statement

Since 2023, Argentina has been in conversations with President Joe Biden’s administration regarding the possibility of signing a special cooperation deal for Argentine minerals. At present, the South American nation and the northern giant do not have a free trade agreement but recent regulations allow the US to use battery components from non-FTA countries.

In addition to officials from the Chamber and the US government, including from the embassy in Argentina, the meeting was attended by representatives from Arcadium Lithium, the newly formed company from the merger of Allkem and Livent, which has operations in Argentina’s Jujuy and Catamarca provinces. Representatives from Livent itself, owner of the Fenix project in Catamarca, also attended, as well as executives from Lake Resources, which owns the Kachi project in Catamarca; Lilac Solutions, which provides commercial lithium extraction systems, and Albemarle, which controls the Antofalla project in Catamarca.

Catamarca, with its Hombre Muerto salt flat, is Argentina’s top lithium-producing province, totalling 20,000 tonnes of lithium carbonate equivalent (LCE) generated every year and hosting most of the exploration projects. Neighbouring Salta and Jujuy are also rich in the battery metal and, together, they are part of the Lithium Table, a regional government initiative that aims to standardize policies related to sustainable lithium extraction and processing. 

In total, Argentina produces  34,000 tonnes of LCE annually, being the fourth top producer in the world behind Australia, Chile and China.

Recent forecasts, however, see the ‘land of tango’ reaching up to 260,000 tonnes of LCE annually by 2027, which would allow it to jump one spot and become the world’s third-largest player. This is thanks to its three active mines and 38 projects under development.

The country, together with Chile and Bolivia, is part of the Lithium Triangle, a unique stripe of high-altitude land covered with lakes and white salt flats that hosts more than half of the earth’s identified lithium resources.

Mexican president proposes ban on open-pit mining

Sat, 02/10/2024 - 14:51

Mexican President Andrés Manuel López Obrador, known as AMLO, presented before parliament a series of constitutional reforms among which there is a proposal to modify Article 27 so that it prohibits open-pit mining.

In detail, his proposal calls for banning the granting of open-pit mining concessions and activities related to the exploration, exploitation, benefit or use of minerals, metals or metalloids using the open-pit method.

To argue his case, López Obrador said that open-pit mining causes severe environmental damage and uses excessive water that could be supplied to water-scarce communities. 

“It is clear that open-pit mining transgresses human rights by affecting the right to a healthy environment and good health,” his proposal states. “The most significant effects are evident in the communities and towns near project areas, placing them in a situation of vulnerability and inequality.”

The proposal, however, does not mention underground mining. 

The motion is expected to revive hostilities between the Mexican government and big industry players, as the country’s oldest and largest mines are open-pit operations. In total, Mexico hosts 264 mines that extract surface minerals, most of them located in Chihuahua, Zacatecas, Sonora and San Luis Potosí. 

Top producers such as Grupo Mexico’s Buenavista del Cobre, Newmont Goldcorp’s Peñasquito, two of Fresnillo’s gold-silver units, and several other mines owned by Industrias Peñoles are open-pit operations.

Since taking over in 2018, the AMLO administration has not granted any new concessions through de facto mechanisms – but without the backing of any specific law. 

The recent move adds to the uncertain investment atmosphere in the country, whose miners were shaken back in May 2023, when Mexican Senators approved a new mining law in an accelerated process without opposition legislators present. 

The mining law reforms involve companies having to deal with an increased burden of pre-consultation, impact studies and water concessions, among other things. The new law also requires financial commitments (bonding) and shortens the tenure of mining concessions from 50 years to 30 years, with a one-time 15-year renewal possible.

Syrah starts active anode material production in Louisiana

Fri, 02/09/2024 - 09:53

Syrah Resources announced on Friday the start of active anode material (AAM) production at its Vidalia facility in Louisiana.

This makes the graphite miner the first commercial-scale vertically integrated natural graphite AAM supplier outside China, said CEO Shaun Verner.

Vidalia processes natural graphite from Syrah’s Balama graphite operations in Mozambique.

Syrah estimates $539 million in costs for Louisiana plant expansion

Syrah is expected to supply 8 kilotonnes per annum (kpta) of AAM from Vidalia to Tesla under an existing offtake agreement, subject to production ramp-up and finalizing qualification.

The miner is progressing the expansion of Vidalia to 45 ktpa capacity, inclusive of 11.25 ktpa, to readiness for a final investment decision.

The company said it has produced unpurified spherical graphite from the front-end milling area since October 2023 to build inventory of precursor value-added material in preparation for the commissioning of the purification and furnace areas in January 2024.

The first purified spherical graphite material was produced in late January 2024.

The heating cycle for the first furnace line commenced in early January 2024, and carbonization of Syrah’s first pitch-coated purified spherical graphite is now complete.

Syrah has applied to the US Department of Energy (DOE) for an additional loan of $350 million under DOE’s Advanced Technology Vehicles Manufacturing loan program to support funding of the Vidalia expansion project, and DOE is progressing due diligence.

Shares of Syrah were down 3.3% by 12:10 p.m. EDT. The company has a market capitalization of $238 million.

Gold price set for another weekly dip amidst rising bond yields

Fri, 02/09/2024 - 09:09

Gold prices slipped again on Friday with the safe haven metal pressured by rising US bond yields, while investors await next week’s inflation data for more clues on the Federal Reserve’s interest rate cut path.

Spot gold was down 0.6% at $2,021.50 per ounce as of 11:50 a.m. ET, for a weekly decline of 0.5%. US gold futures also fell by 0.6%, trading at $2,035.20 per ounce in New York.

[Click here for an interactive chart of gold prices]

Meanwhile, the benchmark 10-year US Treasury yields rose to a two-week high and two-year yields hit almost a two-month high, making the non-yielding bullion less enticing for investors.

The Fed seems like it is going to keep rates higher for longer, which means most central banks will probably follow suit, said Everett Millman, chief market analyst at Gainesville Coins, in a Reuters note.

“I do think that things are trending lower for the gold price, there is a pretty strong floor support at about $1,960 that I don’t expect to see gold go below,” he added.

Several Fed officials, including Chairman Jerome Powell, have said this week they want to see more evidence inflation will continue to decline before cutting rates.

US monthly consumer prices rose less than initially estimated in December, revised government data showed on Friday. Market participants now await the consumer price index (CPI) figures for January, due on Tuesday.

Traders now see about a 62% chance of an interest rate cut in May, according to the CME Fedwatch tool.

Elsewhere, palladium fell 2.9% to $861.06 per ounce and platinum was down 1.3% to $873.97. Prices of both metals were heading for a second weekly dip.

(With files from Reuters)

Miners tackle hard conversations at Indaba

Fri, 02/09/2024 - 09:02
SRK Consulting managing director, South Africa, Andrew van Zyl speaks at a panel discussion at Mining Indaba. Image from SRK Consulting.

Mining continues to engage with the many difficult issues that affect the future of the industry and broader society, judging by the topics and turn-out at this year’s Investing in African Mining Indaba in Cape Town.

“The event remains a forum for productive, if challenging, conversations,” said Andrew van Zyl, SRK Consulting managing director, South Africa.

“Many of these issues – from climate change and decarbonisation to the just energy transition – can be controversial; what is important, though, is that all stakeholders feel that they can participate in robust dialogue to find sustainable solutions.”

Van Zyl acknowledged that many of the sector’s responses to the challenges of today and tomorrow were “works in progress” but emphasized how constructively it had adapted in recent decades.

“Part of the value of the Mining Indaba is that it brings together leaders and role players at both a strategic and technical level,” he said. “This allows not only for ideas to be shared and developed, but for experts to find practical strategies for implementing solutions.”

The rapid pace of global changes was making these forums for knowledge sharing even more important, he noted, as decision makers in mining needed to factor in fast moving variables. This related as much to the political evolution of African countries as it did to technological advancements in the energy sector.

“It is more vital than ever that, as players in mining, we regularly and frequently update our world views with quality information – so that we retain a relevant opinion on future demands and opportunities,” said Van Zyl.

An example is the steady improvement being made in renewable power generation and storage. Whereas certain orebodies were in the past uneconomic due to their remoteness from a centralised power grid, the renewable energy technologies of today could now remove that hurdle.

He pointed out that trends related to the energy transition continued to make commodity prices volatile – complicating the task of valuing mineral resources and planning mining operations. Various early-stage technologies in electric battery manufacture, for instance, still competed for market acceptance, affecting demand for the minerals each technology embodied.

“As in so many spheres that affect the demand for mineral commodities, the mining sector does not get to decide the final value of what it mines,” he said. “Neither does it decide on what the global economy wants to make with its mineral production; these external trends introduce ongoing disruption to which the sector must constantly adapt.”

As an industry, he argued, mining will continue to drive improvements in fields such as safety, operating costs, employee diversity, social value and environmental impact – while navigating the broader socio-economic trends.

Its resilience was well tested by the Covid-19 pandemic, when mining came to the rescue of many economies and communities.

In South Africa, for instance, the mines’ experience and infrastructure in respiratory illness helped protect employees and their communities – while its stand-out economic performance supported the national fiscus at a time when much of the private sector was in crisis.

“We need to appreciate the value of having honest discussions on what mining has to offer, what its considerable contribution has been, and what kind of future we are working towards,” said Van Zyl. “As a regular participant in the Mining Indaba, we see this forum as helping promote such conversations.”

Metals Acquisition IPO Down Under goes over forecast

Fri, 02/09/2024 - 07:24

Metals Acquisition (NYSE: MTAL.U) has raised A$325 million through a new listing in Australia that will help pay for the billion-dollar purchase of the CSA copper mine there.

The Jersey-based company’s initial public offering on the ASX, where it is expected to begin trading under the ticker MAC on Feb. 20, was oversubscribed by about A$25 million, the company said on Friday.

The financing will strengthen the company’s balance sheet as it prepares to pay Glencore (LSE: GLEN) $75 million by June as part of the $1.1 billion purchase of CSA about 700 km northwest of Sydney, BMO Capital Markets said on Friday. The deal was done in 2022.

“The listing can also fund additional exploration and development at the CSA mine, improve working capital, and/or reduce or support refinancing of current debt,” BMO mining analyst Jackie Przybylowski wrote in a note. “Proceeds of the ASX listing could also support future acquisitions.”

One target could be Glencore’s Mt. Isa copper mine in Queensland, the analyst said. The purchase of the cash flow-producing operation would elevate Metals Acquisition to a mid-tier copper miner, the analyst said.

Production growth

ASX shares in Metals Acquisition are expected to list at A$17 apiece. The funds will help the company potentially increase production growth at CSA as well as pay for exploration, company chair Patrice Merrin and CEO Mick McMullen said in the release.

“Owning and operating an Australian copper mine we have long felt it was logical to dual list,” said McMullen, former CEO and president of Detour Gold in Ontario before Kirkland Lake Gold (TSX: KL; NYSE: KL) bought it for C$4.9 billion in 2019.

Metals Acquisition, formed in 2021, says it’s focused on operating and acquiring metals and mining businesses critical for electrification and decarbonization in high quality, stable jurisdictions. Its sole asset so far is the CSA mine, 11 km northwest of Cobar in New South Wales.

The mine produces about 40,000 tonnes of copper annually, according to the company. It’s one of Australia’s oldest and deepest underground mines, stretching back about 150 years and reaching 1.9 km down. Ore is processed onsite and transported by rail 700 km to the Port of Newcastle for export to smelters in Asia.

Streams sold

CSA also produced about 431,000 oz. payable silver annually from 2019 to 2021. Metals Acquisition sold a $90 million silver stream and a $75 million copper stream to Osisko Gold Royalties (TSX: OR; NYSE: OR) in 2022.

Glencore has a 1.5% net smelter return royalty on the life of the mine and holds about $100 million in equity of Metals Acquisition. At least $775 million of the CSA purchase is to be in cash, the companies agreed.

Shares in Metals Acquisition fell about 1% to $12.51 apiece on Friday morning in New York after gaining nearly 20% in the last month, valuing the company at $628 million. They’ve traded in a 52-week range of $8.49 and $13.47.

Mining People: Lodestar, Mandalay, Mirasol, Nion Nickel, FPX Nickel

Fri, 02/09/2024 - 06:39
Management changes announced this week:

Caprock Mining appointed Okunola Joshua Aina its CFO.

Lodestar Battery Metals said Ty Magee is the company’s qualified person following the departure of VP exploration Luke van der Meer.

Mandalay Resources appointed Hashim Ahmed its new EVP and CFO.

President Tim Heenan has been promoted to the role of CEO and given a seat on the board of Mirasol Resources.

Nion Nickel named François Vézina the COO for the Dumont nickel project,effective March 4. He was previously with Osisko Development.

Sola Gold announced that president and director Javier Cordova Unda has taken a personal leave of absence.

Board changes:

FPX Nickel asked Kim Baird to become a director.

The newest board member at Luca Mining is Peter Damouni.

Nuclear Fuels named Rich Munson to the board.

Helen Cai joined the board of Silvercorp Metals.

Slave Lake Zinc added Heath Ellingham to the board.

Dietary shift could generate same amount of power from renewables by 2050 as coal does today

Fri, 02/09/2024 - 06:06

Replacing 50% of animal products with alternative proteins by 2050 could free up enough agricultural land to generate renewable energy equivalent in volume to today’s coal-generated power while simultaneously removing substantial CO2 from the atmosphere.

A recent study led by researchers at Leiden University and published in the journal One Earth explores a CO2-removal method known as bioenergy with carbon capture and storage (BECCS), which involves cultivating quickly growing crops whose biomass can then be stored permanently in geological formations or used as a feedstock to produce renewable energy. 

Most studies of BECCS assume that the land required to grow this biomass would threaten food security or be attained via agricultural expansion into regions of natural vegetation, which has negative implications for biodiversity, but the researchers of the new study had another idea: to combine BECCS with a dietary shift.

“Animal-source foods use resources inefficiently because animals consume more food than they provide, and feeding the animals requires considerable land and water,” the paper reads. “We show that a protein transition could free up extensive resources for BECCS to achieve substantial energy and carbon-removal potentials.”

To test how a dietary shift might augment carbon removal, the researchers estimated how much land would be freed up if humans replaced 10% to 100% of animal protein with plant-based or other alternative proteins. Then, they estimated the potential for using this land for biomass production while keeping sufficient land and water available to sustain ecosystems and meet global food and water needs.

“Our results show that replacing animal products can help unlock vast energy and negative emission potentials via BECCS while avoiding agricultural expansion and securing water supply for people and ecosystems,” the researchers write. “Even modest adoption levels of alternative proteins could free up large agricultural areas.”

Their model suggested that even a 30% reduction in animal-product consumption would enable significant carbon removal and renewable energy production. If 30% of animal products were replaced by alternative proteins, it would free up enough area to generate between 15.8 and 29.1 EJelec per year and remove 3.5–7.2 Gt of CO2 per year. 

For comparison, the scientists note that currently, coal power generates 35 EJelec per year and results in 10 Gt of CO2 emissions.

A solution for all

The team also analyzed global geographical locations for their potential for biomass production and CO2 storage. They found that most countries have the geological potential to sequester CO2 from BECCS within their borders. In particular, the US, Europe, and China stand out for their considerable sequestration potential.

They also demonstrated that planting biomass crops for BECCS on freed-up agricultural land would be more effective at carbon removal than natural revegetation. If 100% of animal products were replaced by alternatives, using those areas for BECCS for around 60 years could remove 700 Gt more CO2 than the natural revegetation of those same areas. After that period, the researchers say, the areas could revert to natural vegetation.

“On the one hand, BECCS could use a fraction of the freed-up land to boost climate mitigation while producing renewable energy,” lead author Oscar Rueda said. “On the other hand, natural revegetation could be preferable in many areas, especially those that may be close to their natural state.”

The researchers say that a protein transition is feasible, but it’s uncertain what this transition would look like and whether it would be dominated by traditional plant-based proteins or lab-based alternatives.

“Market research shows that alternative proteins, from sources such as plants, microorganisms, and tissue culture, could replace 10%–30% of animal products in 2030 and 30%–70% in 2050,” the paper states. “Emerging research on novel alternative proteins can further clarify uncertainties of adoption and impacts.”

Since different alternative proteins would have different footprints, further research will need to examine these various scenarios. Examining how sociopolitical factors might impact the proposed dietary shift and the adoption of BECCS will also require further study.

Auxico Resources hails exploration results at Colombian RREE project

Fri, 02/09/2024 - 05:47

Auxico Resources Canada (TSX-V:AUAG)(OTCQB:AUXIF) has reported positive reports form its sampling program at the Minastyc property in Colombia, where it has found what it calls “significant” concentrations of rare earth elements and other critical minerals.

The Montreal-based company obtained the environmental permit to explore the Minastyc property, located in eastern Colombia, in April last year.

Results from a 2021 campaign showed important concentrations of various critical minerals, including niobium (Nb), gallium (Ga), rubidium (Rb), praseodymium (Pr), dysprosium (Dy), germanium (Ge), cerium (Ce), and samarium (Sm), Auxico said.

Observations from channel sampling across eight pits indicate the prevalence of mineralization within the clayish-rich conglomerate, particularly rich in tantalum, niobium, scandium and other critical minerals.

“The extensive sampling data not only validates the property’s potential but also facilitates the development of an accurate plan with key targets as Auxico progresses towards production,” chairman Mark Billings said.

Auxico initially discovered rare earth oxide (TREO) content of 56.81% at Minastyc, likely the product of an asteroid impact in close proximity to the property.  

Studies carried out since 2019 prompted Auxirico to buy two adjoining properties; Agualinda and the Minastyc. These assets are located within a strategic area designated by the Colombian government for its potential for tantalum, niobium and rare earths. 

Auxico, which is the exclusive trade agent for rare earth concentrates from the Democratic Republic of Congo (DRC), believes Minastyc is a critical mineral-rich project that can quickly be developed into a small-scale mine.

New Gold unveils three-year plan for 35% production growth

Fri, 02/09/2024 - 03:49

Canadian miner New Gold (TSX, NYSE: NGD) has defined the path forward to increase gold production by 35% from last year’s total to 410,000 to 460,000 ounces in 2026, which includes boosting output at current mines and completing growth projects.

The company is also seeking to raise copper production by 60% from 2023 levels to between 71 million and 81 million pounds in 2026, thanks to the start of commercial production and following ramp up at New Afton’s C-Zone this year.

New Gold said it anticipated to achieve this with higher production, total capital reductions and lower operating costs.

The Toronto-based miner expects total costs, on a by-product basis, to decrease by 7%, compared with the 2023 midpoint of guidance, to between $725 and $825 per ounce.

The miner expects to show in 2024 the first results of its three-year plan, with consolidated gold production reaching 310,000 to 350,000 ounces, compared with 321,178 ounces last year. Copper production this year is slated to hit between 50 million and 60 million pounds, it said.

Growing production and declining costs will help the company’s balance sheet, which at the end of the October 2023 quarter included $395.7 million in long-term debt and $214.1 million in current debt.

“Looking beyond our three-year guidance, the company has a strategic objective of targeting a sustainable production platform of approximately 600,000 gold equivalent ounces per year with a line of sight until at least 2030,” president and chief executive Patrick Godin said in the statement. “Following the successful execution of operational stabilization initiatives and growth projects over the past two years, we are increasingly looking to unlock the long-term value of our operations,” he said.

Challenges behind

New Gold, which has the Rainy River gold mine in Ontario and the New Afton copper-gold operation in British Columbia, said issues affecting the assets productivity are all in the past.

At Rainy River, which began operations in 2017, the company has been transitioning mining underground, from where it expects to produce first ore this year.

“At Rainy River, the challenges are behind us … we are achieving our targets quarter over quarter,” the mine general manager, Gord Simms, said during a webcast following the announcement.

The mine produced 253,745 ounces of gold last year, 10% more than in 2022, with output slayed to jump over the next three years as higher-grade underground production ramps up to supplement open pit production. 

The underground portion of Rainy River contributed 10% of production in 2023 and will ramp to 5,000-6,000 tonnes per day by 2027 to produce 150,000-200,000 ounces per year.

Production at the operation, located 65 km (about 40 miles) northwest of Fort Frances, near the border with Minnesota, is forecast to grow to 315,000-355,000 ounces in 2026, the company said. This will help drop all-in-sustaining costs (AISC) from about $1,500 per ounce in 2023 to $1,000-1,100 per ounce.

Production at New Afton is forecast to increase about 50% for gold from 67,000 ounces in 2023 to 95,000-105,000 ounces in 2026. Copper output will increase 60% from 47,400 million pounds in 2023 to 71-81 million pounds in 2026. 

The production growth and copper credits will turn the operations AISC on a by-product basis from $450-550 per ounce to negative $800-900 per ounce.

Green shoots for copper, nickel, zinc, aluminium prices 

Thu, 02/08/2024 - 16:20

Industrial metals are all trading below levels seen this time last year and while nickel’s rout has been grabbing headlines, copper’s bad start to the year after a disappointing 2023 points to broader weakness. 

China consumes more than half the world’s metals and an even greater proportion of iron ore and battery raw materials – and gloom about the country’s economic prospects amid a property and stock market crisis have only added to bearish mining sentiment. 

In a new trading desk note Marcus Garvey, head of Macquarie commodities strategy based in Singapore, and a team of analysts have identified the first green shoots for the sector (and 34 charts to back it up):   

“January’s full set of PMIs (World manufacturing new orders up 1.2pp to 49.8) looks like a potential turning point for the global industrial cycle, with bullish implications for industrial commodities demand.”

Expectations of a smaller reduction in US interest rates this year than previously anticipated have supported the dollar and put metal prices under pressure which usually move in the opposite direction. 

Nevertheless, says Macquarie: “Commodity prices have a far more consistent relationship with global growth than with FX.”

The investment bank also points to US goods demand which it says “increasingly looks to be reaccelerating,” and from a higher base. Macquarie also sees the potential of a developed market manufacturing recovery and a restocking cycle in Europe.”

And while China has so far held off on broad based economic stimulus, fixed asset investment in infrastructure, led by renewables, and certain sectors including autos (particularly electric cars) have shown notable strength.

“Ultimately, if commodity prices are lifted by a pick-up in global industrial production, the implications for goods inflation may become self-inhibiting, by reducing the scope for further central bank easing. 

“But that is an ex-post problem, not an ex-ante one, suggesting to us that dips should now be bought. 

“Selectively at least, in those markets where fundamentals are already relatively tight or have the potential to tighten quickly. Especially if positioning gets short.”

Omai Gold Mines boosts indicated resource by 2 million oz.

Thu, 02/08/2024 - 13:10

Omai Gold Mines (TSXV: OMG) has provided an updated mineral resource estimate for its flagship property in Guyana, incorporating an expansion to the Wenot deposit and the previously disclosed Gilt Creek deposit.

Together, the two deposits have mineral resources totalling 28.7 million tonnes grading 2.15 g/t gold containing 2.0 million oz. in the indicated category and 31.3 million tonnes grading 2.26 g/t for 2.3 million contained oz. in the inferred category.

Compared to the last resource estimate in October 2022, the indicated ounces represent a 4% increase, while the inferred ounces grew by 28%.

Notably, the Wenot indicated resource increased by 10% to 834,000 oz. while its inferred resource grew 45% to 1.6 million oz., owing to increased gold grades in both categories. Following the 2023 drilling, about 39% of the Wenot resource is now west of the historical pit, an area considered well suited to initial mining, Omai said.

Meanwhile the Gilt Creek deposit has 1.2 million oz. of gold in the indicated category and 665,000 oz. of gold inferred. The deposit is located 500 metres north of the Wenot deposit and below the past-producing Fennel pit.

“We are pleased to deliver another substantial increase to the mineral resource estimate for our Omai gold project in Guyana. Also very importantly, there has been a notable increase in the gold grades,” Elaine Ellingham, CEO of Omai Gold Mines, stated in a news release.

She also noted that with this expansion, the contained ounces have now exceeded the total gold produced from the former mine, and at similar grades. It is estimated that approximately 3.8 million oz. at an average gold grade of 1.5 g/t were mined between 1993 and 2005, when the gold price was less than $400/oz.

“When in production, Omai was the largest primary gold producer in South America, averaging over 300,000 ounces of gold annually,” Ellingham highlighted.

The 2024 mineral resource, according to the Canadian gold junior, will form the basis of the project’s preliminary economic assessment, which is currently underway and expected to be announced in the first quarter.

Certain baseline studies have also been completed, and the company said it will continue steps towards an application for an environmental permit and a mining licence once the PEA and additional requisite work is completed.

Shares in Omai Gold Mines gained 7.1% to C$0.075 late in Thursday afternoon following the resource update. The stock traded between C$0.035 and C$0.08 over the past 52 weeks. The company’s market capitalization is C$28.3 million.

Global Reporting Initiative launches sustainability standard for mining at Indaba 

Thu, 02/08/2024 - 11:59

On Thursday at the Mining Indaba conference in South Africa, the Global Reporting Initiative (GRI), an international independent organization for impact reporting across sectors, held an event that launched its sustainability reporting standard for mining companies.

There is currently no reporting standard that covers minerals from the impact perspective. Existing Sustainability Accounting Standards Board reporting focuses only on the risks to providers of financial capital.

GRI 14: Mining Sector 2024, rather, addresses the need for consistent and complete reporting on the sector’s impacts and contributions to sustainable development. 

Mining was identified by the Global Sustainability Standards Board in 2020 for prioritization, and the Standard would apply to all organizations engaged in mining and quarrying – with the exception of coal, and oil and gas, for which GRI sector Standards are already available. KPMG confirmed in 2022 that GRI Standards are the most widely used sustainability reporting standards globally. 

The Mining Standard is a first for the industry and was developed with a multi-stakeholder approach, addressing 25 topics that are material, such as setting expectations for site-level transparency, emissions, human rights to land and resource rights, climate change to biodiversity, anti-corruption to community engagement.

It also introduces three topics not previously addressed by GRI yet are of specific relevance to mining firms: tailings management, artisanal and small-scale mining, and operating in conflict zones.

“We’re here to engage on the contents with information users, so that people know what they will be hearing about and can ask questions on the ground,” Noora Puro, GRI senior manager, standards division, told MINING.COM in a phone interview.

Puro, who was project manager on the GRI Coal Reporting Standard, said that standards are prominently visible on the Indaba agenda. 

“What [to] expect from this standard is a focus on transparency,” she said.

“It’s not a performance standard, but it helps current and future GRI reporters meet the expectations for responsible business, what it means to be transparent about your impact specifically and not the risks to the organization, but how the the company actually interacts with the world and how they mitigate, or remedy their impacts.” 

Puro said the way the sector Standards align with the GRI Standard system is they provide a navigational tool for the sector, laying out the most significant impacts and the topics where there are expectations to see information reported.

“Wherever the gaps are found in very sector specific impacts that would not be covered by the GRI topic standards, we have relied on existing responsible mining instruments, existing standards to not duplicate but to align with what’s already out there and considered as best practice,”she said. “An example would be the topic on conflict affected and high risk areas where we’ve aligned with the OECD due diligence guidance.” 

Sector specific topics like closure, rehabilitation, look at existing ICM materials or IFC standards for resettlement.

While European Union sustainability reporting standards will soon come into effect, there is, as of yet, no sector standard for mining.

“It gives a blueprint for mining companies to transparently communicate their impacts – that’s the expectation and considering our significance in the impact reporting sphere, our Standard reporters will be very well prepared for upcoming regulation in the EU in probably a year’s time,” Puro said.

“There’s this clear red thread that across the board information users from investors to OEMs for example, are looking for better quality data, more granular data and it just isn’t there right now,” she said. 

“And what this standard is trying to enhance is the quality of the data, the consistency of reporting that you would see across these topics.” 

Cameco doubles 2023 uranium sales, prices compared to year earlier

Thu, 02/08/2024 - 11:36

Higher sales volumes and realized prices for uranium production and fuel services meant that Cameco’s (TSX: CCO; NYSE: CCJ) 2023 net earnings and cash from operations more than doubled compared to 2022. And adjusted EBITDA was up 93%.

That was the good news delivered this week by Cameco president and CEO Tim Gitzel. And strong financial performance is also expected this year.

“The benefits of nuclear power have come clearly into focus, with 28 countries around the world declaring support for the tripling of capacity to help achieve global net-zero greenhouse gas emissions by 2050. The uncertainty about where nuclear fuel supplies will come from to satisfy growing demand has led to increased long-term contracting activity, and in 2023, about 160 million lb. of uranium was placed under long-term contracts by utilities,” said Gitzel.

Prices across the nuclear fuel cycle rose in 2023 and continue to rise. Uranium spot prices more than doubled to $100/lb. at the end of January 2024, after being only $48 at the end of 2022. The long-term price for uranium was $72/lb., an increase of about 38% over the same period.

Year-end revenue for 2023 was C$2.59 billion, up from C$1.87 billion for 2022. Gross profit was C$562 million (C$233 million in 2022) and net earnings were C$361 million (C$89 million in 2022). Adjusted EPITDA was C$831 million, compared to C$431 million in 2022. Cash provided by operations in 2023 was C$688 million (C$305 million in 2022).

One notable accomplishment last year was adding a 49% interest in Westinghouse to the Cameco portfolio. Brookfield Asset Management retained the remaining 51% interest.

“We believe Westinghouse is well-positioned for long-term growth driven by the expected increase in global demand for nuclear power,” said Gitzel. “In 2024, we expect our share of its adjusted EBITDA to be between C$445 million and C$510 million. Further, over the next five years, we expect its adjusted EBITDA will grow at a compound annual growth rate of 6% to 10%.”

On the mining side, Cameco is planning to produce 18 million lb. of uranium oxide (U3O8) at each of the McArthur River-Key Lake and the Cigar Lake mines this year. Reserves saw a boost of 73.4 million lb. U3O8 at Cigar Lake, of which Cameco’s share is 40%. The increase also has the potential to extend the mine life to 2036. The company looking ahead to expand annual production to 25 million lb. (on a 100% basis) when the time is right.

Cameco produced 17.6 million lb. U3O8 in 2023 (compared to 10.4 million lb. in 2022), resulting in 2023 net earnings of C$606 million (C$121 million in 2022).

In the fuel services sector, the company produced 13.3 million kg elemental uranium in 2023 (compared to 13.0 million kg in 2022), giving it net earnings of C$129 million (C$120 million in 2022).

Capstone raises $265 million to advance Chilean copper projects

Thu, 02/08/2024 - 09:11

Capstone Copper (TSX: CS) (ASX: CSC), alongside shareholders Orion Fund JV Ltd., Orion Mine Finance Fund II LP and Orion Mine Finance (Master) Fund I-A LP, has announced the closing of their recently arranged bought deal to support the company’s near-term growth initiatives in Chile.

Under the financing, co-led by RBC Capital Markets, National Bank Financial and Scotiabank as joint bookrunners, Capstone and the Orion funds sold a total of 68.4 million common shares of the copper developer at C$6.30 per share to raise gross proceeds of C$431.2 million ($320m). This includes the exercise of the underwriters’ overallotment option for 8.9 million shares.

Of the shares sold, over 56.5 million were issued by Capstone for C$356.2 million ($265m), and the remaining 11.9 million were sold by Orion for approximately C$75 million ($55m). Capstone did not receive any proceeds from the secondary sale of shares by Orion.

As Capstone noted in its Feb. 1 release, net proceeds of the offering will be used to advance its Chilean copper developments, notably the Mantoverde optimized project and Santo Domingo detailed engineering, as well as for future exploration programs.

Mantoverde is an open-pit mine operation located in the Atacama region capable of producing up to 40,000 tonnes of copper cathodes from processing oxide ores alone. The company is currently analyzing an expansion of the newly commissioned sulphide concentrator to optimize the operation, and a feasibility study is scheduled for completion late in H1 2024.

The Mantoverde operation is 70% owned by Capstone and 30% by Misubishi Materials.

Santo Domingo is a fully permitted copper-iron project also located in the Atacama region. Capstone has laid out plans to integrate this project into Mantoverde to create a district-scale operation that will output 200,000 tonnes of copper as well as 4,500-6,000 tonnes of battery-grade cobalt annually.

Shares of Capstone Copper inched 1.3% higher at C$6.44 apiece by noon ET, trading within a 52-week range of C$4.40 and C$7.25. The Vancouver-based miner has a market capitalization of C$4.4 billion ($3.3bn).

Palladium price drops below platinum for first time in five years

Thu, 02/08/2024 - 08:30

The price of palladium fell below that of platinum for the first time since April 2018 on Thursday, as growing demand concerns and bets on stable supply weighed on the metal.

Spot palladium retreated 2.8% to $869.6 per troy ounce, its lowest in five years, while platinum stood at $874.5.

Palladium fell by 39% in 2023 after rising prices from 2018 to 2022 caused the auto sector, which accounts for 80% of demand, to start replacing it with the cheaper platinum in autocatalysts.

The rising adoption of electric vehicles, which do not require any off-gas treatment system, further worsened the metal’s prospects.

“That means that demand will shrink while supply will remain more or less stable,” said Henrik Marx, head of precious metals trading at Heraeus.

“Palladium prices could easily spike on major supply headlines given the thin liquidity. But we consider such rallies as opportunities for producers to add more hedging positions and for speculators to open fresh short positions, as the long-term outlook remains very negative,” Citi said in a recent research note.

The majority of mined palladium production comes in a basket with other metals, limiting producers’ ability to slow palladium output even when the market price is below their costs.

South Africa and Russia account for 80% of global palladium mined output, with the rest mined in North America. Russia’s main miner, Nornickel, will produce slightly less palladium this year, but no further reductions are planned, it said in January.

EV boom drives miner’s $100 million hunt for new palladium uses

“South Africa and America are not going to shut down production. That’s the main conclusion,” a source at a major miner told Reuters.

Two South African producers already reported tumbling earnings following the collapse in prices.

Impala Platinum reported that its fiscal second-half profit likely fell by more than 85% and wrote down the value of assets in South Africa and Canada. Anglo American Platinum said its 2023 profit sank by as much as 79%.

Shares in the four companies that mine most PGM metals in South Africa all fell in Johannesburg trading. Amplats dropped 6.8%, Implats slid 1.9%, Northam Platinum declined 5.2% and Sibanye Stillwater was down 4.6% as of 10:43 a.m. local time Thursday.

(With files from Bloomberg and Reuters)

Ancient island submerged off Brazilian coast was (and may still be) mineral-rich

Thu, 02/08/2024 - 06:13

The Rio Grande Rise (RGR), a possibly continental basaltic plateau and chain of seamounts now submerged in the South Atlantic Ocean some 1,200 kilometres from the coast of Brazil, was once a giant tropical island, rich in minerals and covered with vegetation, new research has found.

According to a recent study led by scientists at the University of São Paulo (USP), sediments from this formation – which is about the size of Spain – have been dated between 45 million and 40 million years ago.

In a paper published in the journal Scientific Reports, the experts explain that over 10 years, they travelled around the area in research ships and analyzed samples of seafloor sediment dredged at a depth of about 650 metres in the western RGR. They were able to characterize its mineralogical, geochemical and magnetic properties.

The samples contained mainly red clay with several minerals typical of tropical volcanic rock alterations, such as kaolinite, magnetite, oxidized magnetite, hematite and goethite.

“Our research and analysis enabled us to determine that it was indeed an island, and what’s now under discussion is whether the area can be included in Brazil’s legally recognized continental shelf,” Luigi Jovane, senior author of the article, said in a media statement.

“Geologically speaking, we discovered that the clay was formed after the last volcanic activity occurred 45 million years ago. The formation therefore dates from between 30 million and 40 million years ago. And it must have been formed as a result of these tropical conditions.”

For Jovane, the fact that a multidisciplinary team participated in the research contributed to the results.

“We have a group of the highest quality including specialists in geology, geochemistry, biology, hydrodynamics, environmental impact assessment, new energies, psychology, and law. All this accumulated science can be used to deepen our understanding of the RGR and prospect the region without affecting the local system’s synergies,” he said.

“To know whether resources can be viably extracted from the seafloor, we need to analyze the sustainability and impacts of this extraction. The ecosystem services provided by the ocean there haven’t been studied in detail, for example. When you interfere with an area, you have to know how this will affect animals, fungi and corals, and understand the impact you’ll have on the cumulative processes involved.”

Seafloor discoveries

Jovane and his team reconstructed the western portion of the RGR using high-resolution bathymetric mapping that showed plateaus covered with sediment and separated by a rift with a depth of more than 600 metres.

They used an autonomous underwater vehicle and a remotely operated vehicle to produce maps, videos and sonar surveys.

The AUV was capable of diving down to the seafloor and covering a pre-established area for a maximum of 12 hours. The ROV was connected to a ship by a cable as it moved while producing high-resolution images, and collecting samples of rocks and organisms with a robotic arm.

Red earth

The existence of tropical soil between the volcanic lava flows detected by the researchers shows that the rocks must have been exposed to open-air weathering in a warm-wet climate in a region with active volcanoes less than 40 million years ago. The soil is similar to the “red earth” found in many parts of São Paulo state.

The RGR has been intensely studied in recent years because of its economic potential. It is in international waters and hence governed by the International Seabed Authority. In December 2018, the Brazilian government applied for an extension of its continental shelf to include the RGR, which is well beyond the limit of 200 nautical miles established for all nations by the UN Convention on the Law of the Sea.

Areas rich in cobalt, nickel and lithium, as well as tellurium and other rare earths critical to the transition from fossil fuels, one of the main drivers of global warming, to renewable energy, have been detected in the RGR. 

“It’s important to understand the ecosystem services and other natural processes at work in the RGR,” Jovane said. “Only this knowledge can enable us to carry out the environmental impact assessments and calculate the mitigation measures and offsets required to protect it if economic development is permitted.”

Nexa Resources halts Peru zinc mine due to blockade

Thu, 02/08/2024 - 05:59

Latin America-focused Nexa Resources (NYSE: NEXA) has halted production at its Atacocha San Gerardo open pit zinc mine in Peru due to a road blockade by the Joraoniyoc community since earlier this week.

The zinc producer, controlled by Brazilian holding company Votorantim SA, said the obstruction of the road to access the mine has not had a material impact on Atacocha’s production to date.

Mine production has been suspended, and activities are limited to critical operations with a minimum workforce to ensure proper maintenance, Nexa said.

On a weekly basis, the Atacocha mine produces about 200 tonnes of zinc, which is less than 3% of the company’s total zinc production, it said.

Mining conflicts in Peru have risen over the past two years as empowered local communities increased demands under the administration of leftist ex-President Pedro Castillo, who was impeached in December 2022 and replaced by vice president Dina Boluarte.

Nexa itself has faced three recent road blockades at Atacocha. The first one, in March 2022, cost the miner 300 tonnes of lost zinc production. It was also affected by another blockage in August the same year, and in January 2023.

Nexa has nine operations distributed between Brazil and Peru – three of which are refineries and six mines. including the largest underground zinc mine in Peru, Cerro Lindo, and the largest zinc refinery in the Americas, Cajamarquilla.

Peru is the world’s no. 2 copper producer after Chile and an important producer of zinc.

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