Sunday, 31 August 2014

Chinese Miners Seeking $1.3bn Acquisitions

Dave Forest at Pierce Points highlights recent plans by Chinese miner Zijin to spend $1.3bn this year alone on Gold and Copper projects over 3m oz and 2bn lbs, particularly gold in Africa.

Meanwhile China Molybdenum also expressed interest in copper projects in developed countries, and countries with stable political conditions, following the example of their $820m purchase of the Australian Northparkes Copper Mine from Rio Tinto.
China Molybdenum’s chairman Li Chaochun was quoted by the South China Morning Post as saying, “We are bullish on copper over the long run. It is one of our investment priorities.”
Forest - Both announcements suggest that demand for quality mining projects from China is going to remain high. Both in established jurisdictions–and frontier economies such as in Africa. 
It will be interesting to note whether specific African jurisdictions see favour or whether good projects in more difficult regimes can be taken on with the weight of the Chinese state support where Western investors fear to tread.  

Thursday, 28 August 2014

Eric Coffin Interview

Including stock discussions of Rockhaven, Constantine, Precipitate
Strategic Metals has significant holdings in these and others.(NBV focus)

Why Central Banks Should Give Money Directly to the People - Foreign Affairs

The influential journal Foreign Affairs floats this balloon.... or helicopter.
Governments must do better. Rather than trying to spur private-sector spending through asset purchases or interest-rate changes, central banks, such as the Fed, should hand consumers cash directly. In practice, this policy could take the form of giving central banks the ability to hand their countries’ tax-paying households a certain amount of money. The government could distribute cash equally to all households or, even better, aim for the bottom 80 percent of households in terms of income.
Because they are more efficient, helicopter drops would require the banks to print much less money. By depositing the funds directly into millions of individual accounts -- spurring spending immediately -- central bankers wouldn’t need to print quantities of money equivalent to 20 percent of GDP. The transfers’ overall impact would depend on their so-called fiscal multiplier 
and fortunately
it makes no sense to worry about the solvency of central banks: after all, they can always print  more money. 

Tuesday, 26 August 2014

Gold Mining M&A Targets - Project Comparisons

A number of analysts are pointing to a Merger and Acquisition spree as likely to follow a gold price break out. ........more......

The State of African Mining -SNL

Presentation HERE including recent feasibility studies summary of Capex & NPV
Appears to be from recent Mining on Top -Africa conference
More Conference Presentations HERE   and    HERE

Monday, 25 August 2014

Nolan Watson on Gold Streaming & Royalty Companies

Interview HERE. No mention of Brazilian mis-adventures at Colossus and Luna Gold
  • With the assets, what we are looking for is robust economics. You want to ensure that the ratio of the value of the mine to CAPEX is high so that you’re not putting up a tremendous amount of capital for a small return when you do build that mine. 
  • We are also looking for low-cost operations, so once they do build it, the question is whether the company is going to be able to produce at below the industry average all-in cost of production. 
  • The third thing that we are looking for with a mine is exploration upside. We want to find situations where the mine life can double or triple. 
  • On the company side, what we are looking for is obviously good management teams, but other things we are looking for are capital structure and balance sheets.  
  • We are very sensitive to not over-stream a mine. Our goal is to ensure that their shareholders are the primary beneficiary of the cashflow of the asset. We have run into it in the past where things have been over-streamed and mining companies started losing incentive to actually extract value from the asset.

Wednesday, 20 August 2014

Pierre Lassonde on Royalties and Exploration - Interview with Sprott

Interview with Pierre Lassonde at Sprott - in full
......when we create a royalty. I’m not talking about a stream; I’m talking about a royalty -- like the GoldStrike royalty or the Detour royalty. We get a free perpetual option on the discoveries made on the land by the operators, and we get a free perpetual option on the price of gold.
we need the exploration companies to get back to making discoveries. Otherwise the whole industry, particularly the gold mining industry, is going to go very flat production-wise. Even if the gold price starts to go up, it could take five or six years before production increases in response. So there’s a real need for venture capital
So do you avoid early-stage exploration stocks? Mostly, yes – though I do have people looking for the next Hemlo, or the next Voisey’s Bay. Whoever finds one of those, the premium they get to their share price will be beyond belief, because it’s been way too long since we’ve had a really significant new discovery – a Hemlo, at like 20 million ounces of gold, or a GoldStrike, with around 40 million ounces, a Voisey’s Bay or a Diamond Fields. It’s been over 20 or 25 years since we’ve had one of those discoveries. The world is just panting for one and I think it would be helpful to bring back the risk-taking attitude that’s completely gone from that sector. But those companies I look at are 1 in a 1,000. You can look at 999 dogs before you find one. It’s very difficult. 

Friday, 15 August 2014

Brent Cook - Telling Right from Wrong in Exploration

Identifying Exploration Companies
Exploration is a tough business, making a discovery is much tougher, and advancing a real deposit through the hurdles of geology, politics, and the stock market is the hardest test and is rarely successful.
......We should move ‘down the food chain’ into companies with stellar, early-stage projects that have yet to be tested—a process also much easier said than done. You can always find a reason not to buy. 

Thursday, 7 August 2014

Rick Rule Interview

at SmallCapPower site

  • Saucer shaped recovery,no spike sell off, so no hockey stick rebound.
  • Feasibility / PFS stage M&A will be first movers 50-70% gains
  • Entering beginnings of discovery cycle.
  • Tiny-caps with good teams will be 10-baggers later as market develops
  • Risks muted. Those who survived fairly decent. Top quartile. Past success. Current endeavour in similar circumstance.
  • Capital / access to capital to stay alive until tide lifts all ships
  • Nobody dreams about small deposits. Rewards commensurate with risk - size.
  • Gold & silver M&A this year.
  • 2-3 year horizon  industries in liquidation with prices below cost of production. Plat/Palladium. Uranium, Zinc, Nickel, Lead, Potash / Ag minerals. Longer horizon coal sector. First time since 2001 gold & silver reasonably priced.
  • Prospect generators
  • Optionality stocks - big deposits , price sensitive, very large capital. See much more upside. $40-50m caps vs $400m 3 years ago.

British Columbia Mining - Mt Polley Disaster

The catastrophic breach of the tailings dam has seen huge concern in Canada - reported with videos at IKN

Jack Caldwell at I Think Mining (see blogroll) has this from correspondents.
The cost to other mining aspirants of delayed projects, additional tailings facility features, and so on is, in a sense, incalculable.   As one private correspondent said to me today: “This sets mining in Canada back for at least ten years.”  Another private correspondent said: “Nobody will permit a new mine in BC for at least ten years.”

Very Junior Gold M&A

Some of the smaller juniors becoming extinct through M&A in the very junior gold space over recent months. List Below

Monday, 4 August 2014

Diggers & Dealers - Australia 2014

The premier Aussie Mining event kicked off in Kalgoorlie today

Presenting Companies and Exhibitors
Review at Mining Australia

Mervyn King former governor of the Bank of England gave the opening address.
"We need to have these changes in the world economy, supply side reforms and changes to real exchange rates in order to boost the real incomes of countries that previously had large trade surpluses, and they will need to spend that on consumption and reduce their trade surpluses."

Sunday, 3 August 2014

Brent Cook - Discovery Panel with Tim Coughlin, Eira Thomas & Miles Thompson

Discussion of the Discovery Process chaired by Brent Cook at the Sprott Symposium

Marginal Producers

The marginal producers clearly offer great risks to investors during periods of metal price weakness, a number of business failures have occurred during this down-cycle. If we are entering a period of increasing prices the marginal producers who survived may offer great leverage, and sooner than the explorers or developers as they will control increasing cashflow.