In Today's Briefing Gold Gold has firmed up in recent sessions after warmer-than-expected consumer and producer prices knocked it off its perch.
James Hyerczyk, market analyst at FXempire.com: “The recent rise in gold prices is primarily driven by a softening U.S. Dollar and increasing tensions in the Middle East, particularly concerns around political stability and oil supply disruptions, which enhance gold’s status as a preferred safe-haven asset.”
Traders are now digesting this afternoon's (Wednesday, Feb. 21) minutes from the last FOMC meeting to glean insight into when the Fed might nudge rates lower. Given this stubborn inflationary price pressure, are they now more inclined to hold off until summer, or later? Fed to cut US rates in June, risks skewed towards later move: Reuters poll.
Search for the Missing Continues - Mine Boss Detained
Adding to the barrage of headlines crossing our screen last week concerning SSR Mining's calamitous (leach pad) landslide—a slide that dislodged 10 million cubic meters of earth across a 200-meter slope—there's this: Turkey detains company director as part of inquiry into gold mine landslide that left 9 missing.
It appears that Cengiz Demirci, senior vice president of Copler operations, is the latest SSR official to be held in custody by Turkish authorities. According to Reuters, as many as eight SSR employees were detained amid an investigation into the catastrophic event.
Turkey’s energy minister says hundreds of search and rescue personnel are still looking for those trapped under rubble after the landslide ripped through a deep ravine in the mountainous Erzincan province of eastern Turkey.
In another blow to the company and its shareholders, who have witnessed a >$1B erosion in market cap, Turkey's environment ministry announced that it has canceled the environmental permit and license held by Anagold Madencilik, Copler's mine operator, 80% owned by SSR - Turkey Cancels SSR Gold's Environmental Licenses After Accident.
Experts have warned the mine site is a potential environmental hazard, because the soil was laced with dangerous substances, including cyanide, which is used in gold extraction. In 2020, the mine was temporarily shut down following a cyanide leak into the Euphrates River. In Partnership With Highlights of the Initial Inferred Resource Estimate at the WPC Zone: 2.39Mt @ 977 g/t silver equivalent (“AgEq”) for 75.0 Moz AgEq. The zinc equivalent is 26.32% ZnEq. Attractive mining thicknesses ranging from 5 to 49 meters and widths ranging from 25 to 70 meters over a strike length of 495 meters. All-in discovery rate of 3198 AgEq ozs/meter drilled. Robust resource that is relatively insensitive up to a cut-off grade up to 600 g/t AgEq. The Initial Inferred Mineral Resource Estimate is merely a beginning and demonstrates the high-grade nature of the mineralized system and that more exploration is fully warranted. Read the full press release here. Peru Gets Mining Friendly(er)
Hailed as a landmark decision in our decarbonization and electrification journey, Peru greenlighted the expansion of Antamina, the country’s largest copper-zinc mine - Peru approves $2 billion Antamina copper mine expansion.
Co-owned by global behemoths Glencore, Teck Resources, BHP, and Mitsubishi, this greenlight will mobilize $2 billion toward expanding the Antamina operation—a move that will extend the mine's life from 2028 to 2036.
The expansion entails significant upgrades, including the open pit, ore crusher station, and dam storage capacity, ensuring that Antamina continues to bolster Peru's economy significantly. The mining sector, contributing 8.5% to the nation's GDP, stands at the core of Peru's economic landscape. With a recorded 13.6% GDP growth in 2021 and an anticipated further growth of around 2.9% in 2023, the timing seems impeccably aligned with both the country's and the global demand for copper and zinc. This strategic move by Antamina, therefore, not only promises to enhance its production capabilities but also to fortify Peru's economic resilience.
This positive attitude toward open pit mining stands in stark contrast to posturings on display further to the north (next story).
AMLO's Successor Backs Open-Pit Ban in Mexico
In a recent Briefing, we reported how Mexico's president, Andres Manuel Lopez Obrador (AMLO), renewed calls for a ban on ALL open-pit mining just days before the disaster in Turkey made international headlines. But it appears his proposal is unlikely to pass, at least in the short term, as his government lacks the two-thirds majority in Congress required to make it fly - Mexican mining sector balks at plan to ban open-pit mines.
The problem for miners, who say the move would generate uncertainty and curtail investment in an industry that fuels 2.5% of Mexico's GDP, is that AMLO's frontrunner/successor, former Mexico City Mayor Claudia Sheinbaum, has jumped on the anti-open-pit bandwagon as part of her platform ahead of a June presidential election.
Fewer than half of the 124 mines affiliated with the Camimex mining chamber are open-pit, yet they represent 60% of Mexico's output. Open-pit mines represent more than $3.9 billion in investment and 200,000 direct jobs. The chamber also warned that a ban would affect supply chains and eventually force Mexico to import minerals at a higher cost. "Prohibiting open-pit mining would imply the destruction of a strategic sector." Sound logic, this.
Canada represents 70% of foreign mining investment in Mexico. Jorge Ganoza, president of Canada’s Fortuna Silver Mines (FVI.TO): “It’s no secret that this administration has been averse to mining. If it were to continue, we would certainly see Mexico lose ground compared to other mining nations.”
Graphite. Sexy?
It may not be the most seductive metal in the junior arena, but when a graphite developer, like Nouveau Monde Graphite (NOU.V), attracts the interest of a pair of end user behemoths like General Motors and Panasonic Holdings, price appreciation comes - NMG Secures Multiyear Offtakes and total US$87.5 Million Investment from Anchor Customers and Strategic Investors to Underpin its Phase 2 Ore-to-Battery-Material Graphite Operations.
The appreciation...
The deal concerns NOU's Matawinie project in Saint-Michel-des-Saints (Quebec), where the company plans to build a graphite concentrator. The all-electric Matawinie open-pit operation is expected to produce 103,000 tonnes of graphite concentrate annually over its 25-year mine life.
Both GM and Panasonic are sinking $25 million into NOU and have each committed to purchase 18,000 tonnes of natural graphite active anode material annually from Matawinie over a period of six to seven years.
NGM aims to raise $1.2 billion to build the whole project, with $725 million coming from debt and $475 million from equity. The miner aims to become North America’s first fully integrated source of natural graphite active anode material, which accounts for about half of an electric vehicle (EV) battery.
GM and Panasonic (and other potential co-investors) could join future financing rounds worth hundreds of millions of dollars, NOU said in a statement.
Rating Agency To Tear Strip Off Panama
The forced closure of First Quantum's Cobre Panama mine—a mine that represented 5% of Panama's GDP—is exerting downward pressure on the country's BBB- credit rating, according to Fitch Ratings, who warned of slower near-term growth prospects and government weaknesses - First Quantum mine shutdown piles pressure on Panama's rating, Fitch says.
“Public finances remain structurally weak, amid surging interest costs, spending pressures and sluggish tax revenues,” Fitch said in a statement. “Authorities have enacted measures that Fitch believes could worsen rather than improve the underlying trend.”
The Central American nation risks seeing its rating reduced to 'junk' after Fitch downgraded Panama's rating outlook from stable to negative. In an environment where interest rates are already on the rise, a junk rating would increase borrowing costs at the government level.
Osino Attracts Superior Bid
In a classic example of money talks, bullshit walks, a new cash offer from an unnamed predatory entity valued at C$1.90 gives the boot to Dundee Precious Metals (DPM.TO) half-stock, half-cash C$1.55 bid for resource-rich Osino Resources (OSI.V) - Osino Resources Announces Receipt of Superior Acquisition Proposal.
The reaction...
Dundee will not be amending its offer for Osino. As part of this new deal, valued at roughly C$368 million, the unnamed predator is picking up the tab for the termination fee now owed to Dundee.
The prize in the unnamed entities' eyes: Osino's advanced-stage Twin Hills Gold Project in Namibia where a proposed open pit operation will see average annual production of 175,000 ounces of gold over the first five years, coming online in H2 of 2026, as per a feasibility study released in June.
The June 2023 DFS shows a post-tax NPV(5%) of US$480M and an IRR of 28% using a $1750 Au price input. Namibia has already granted the project a 20-year license (site-level permits are still required).
KoBold Snags a Piece of Midnight Sun's Action in Zambia
Using AI to target mineral deposits on dozens of projects spanning four continents, Gates and Bezos-backed Kobold has set its sights on Zambian exploreco Midnight Sun Mining (MMA.V) and its Solwezi Copper Project located in the heart of the Zambia-Congo Copperbelt - Midnight Sun and KoBold Metals Join Forces on the Dumbwa Target in Zambia.
The earn-in deal that will see KoBold take down a 75% interest in the project requires an exploration spending commitment of $15 million and cash payments totaling $500,000 over four and a half years.
This latest foray steps up KoBold's presence in Zambia where the company is pushing its Mingomba Project, hailed as the largest find-of-its-kind in a century (247 million tons with an average grade of 3.64%), toward pre-feasibility.
Midnight Sun CEO Al Fabbro: "KoBold has assembled one of the top global sediment-hosted copper teams - including Dr. David Broughton - and I cannot overstate how pleased we are to have them at the helm on Dumbwa. Their bench strength speaks to the quality of this outstanding tier-one exploration target and the seriousness of their approach. As evidenced by the impressive roster of keystone investors in KoBold, they are on track to become new industry leaders using incredibly sophisticated proprietary technology to fast-track the discovery of critical minerals. We look forward to KoBold applying their groundbreaking exploration approach to the Dumbwa Target and moving this important Zambian copper asset toward development together, which we view as perfectly timed to coincide with an upcoming phase of unprecedented global copper demand."
Hits Of The Week Côté Production on Deck: "The project entered 2023 with construction approximately 64% complete and finished the year at 98% complete" - IAMGOLD Reports Fourth Quarter and Year-End 2023 Results; Provides 2024 Outlook
Some damn fine gunnery: "Lunahuasi continues to exceed our expectations and these new holes have delivered some of the longest, highest-grade, combined copper, gold and silver intersections seen globally for a long time. The deposit remains open in all directions and is rapidly turning into a major new discovery. In addition to the high grades in individual structures, we are starting to see longer intervals of stockwork and disseminated mineralization towards the western part of the deposit" - NGEX DRILLS 23.0 METRES AT 23.02% COPPER EQUIVALENT WITHIN 71.9 METRES AT 9.63% COPPER EQUIVALENT AT LUNAHUASI
An impressive ounce count: "Our technical team has done an outstanding job, increasing the volume, the grade, and the geological understanding of our massive Goldstorm Deposit. The 2023 drill hole program was designed to expand the mineralized domains to their northern, northeastern and eastern extents. We not only pushed out the edges of the Deposit, but we also successfully increased the grade of the Inferred Mineral Resource" - Tudor Gold Significantly Increases Ounces and Grade in an Updated Mineral Resource Estimate for the Goldstorm Deposit at Treaty Creek, British Columbia with an Indicated Mineral Resource of 27.87 Moz AuEQ at 1.19 g/t AuEQ
“Clearly now, we are reaching a very high level of interest so I would say that yes it seems to be inevitable,” said Michael Lodge, the secretary-general of the ISA, in an interview with CNBC - Deep-sea mining seems to be inevitable, says UN regulator |