Major mining-related spills highlight catastrophic ‘black swan’ events


Canadian Underwriter Magazine

The clean-up costs alone of major spills in certain areas – such as British Columbia or Alberta — could be in the tens of millions of dollars, demanding that the mining companies have in place appropriate coverages, suggests a report from Marsh.

Since October 2013, there have been four high-profile environmental incidents in the North American mining sector, three in the summer of 2014 alone, notes the report, Major Spills in British Columbia, Alberta and Mexico Highlight the Potentially Catastrophic Environmental Risks Of Mining, issued last week.

These events include the 2014 failure of a tailings pond at a copper-gold mining operation in B.C. that sent 5 million cubic metres of water and tailings sludge into an adjacent lake and creek system, impacting local water supply; and in 2013, a berm failure at a coal mine tailing pond in Alberta that sent water, mud and fine coal particles into two small creeks, leaving a layer of sediment in the creeks into the Athabasca River.

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Will gold fall off the $1200 precipice?

By Larwence Williams
Australian Mining

Lawrence Williams

Lawrence Williams

As I write the gold price is sitting at around US$1225, but it fell at one time yesterday to around US$1206 and it may not take much to drive it down below the key US$1200 psychological support level. If it breaches this level the price could well fall sharply further with computer based stop loss sales coming in strongly. The fall could then become something of a rout.

And with gold bears like Jeffrey Currie at Goldman Sachs getting in there keen to generate further downwards momentum so his end- year US$1050 gold price might actually come about, then who’s to say it won’t freefall to US$1100 or below.

Currie and Goldman Sachs will doubtless have their avid followers, particularly within the financial community — after all Goldman could be perhaps described as the most successful investment bank of the past generation. True, some of its tactics for achieving this may not be seen as without moral flaws, but then this is something which could be applied to almost any investment bank — not specifically to Goldman.

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Photos from the Casey Research 2014 Summit: Thriving in a Crisis Economy

Photos and text by Ken Smith

It was a worthwhile investment of time and money for the more than 400 attendees at last week’s Casey Research 2014 Summit: Thriving in a Crisis Economy in San Antonio, Texas. From Thursday afternoon check-in to the close on Sunday afternoon, it was non-stop talks by power hitters.

As described in the marketing material for this Casey Summit: “Global markets are bloated with unprecedented levels of government-created liquidity and manipulated for political ends, the true condition of the crisis economy cloaked in a fog of media hype. For most people, the crisis economy is going to end very, very badly.”

In addition to the speakers, a highlight of the conference was the chance to talk with top executives of two dozen mining companies in the “Map Room” (actually, the wide hallways of the Hyatt Regency).

Below are photos of Dudley Baker, founder and editor of Common Stock Warrants and this website, with some of the old and new friends and colleagues he had a chance to talk to.

Olivier Garrett

Olivier Garret, CEO, Casey Research.

John-MarkJohn-Mark Staude. President and CEO of Riverside Resources, Inc. Continue reading

Veris Gold pays EPA fine for not reporting mine pollution in Nevada

The Jerritt Canyon mineralization is Carlin style. Most of the ore comes from the Steel, Saval and Smith deposits near Elko, Nevada. The picture shows the portal to the new Starvation Canyon deposit, which is 10 km SW of the other deposits, and is just being developed. (Photo by Sprott Assett Management)

The Jerritt Canyon mineralization is Carlin style. Most of the ore comes from the Steel, Saval and Smith deposits near Elko, Nevada. The picture shows the portal to the new Starvation Canyon deposit, which is 10 km SW of the other deposits, and is just being developed. (Photo by Sprott Assett Management)

By Scott Sonner
Associated Press / Miami Herald

The Canadian-based owner of a gold mine in northern Nevada has agreed to pay a $182,000 civil penalty for failing to correctly report to federal environmental regulators the release of millions of pounds of toxic chemicals — including arsenic and cyanide — into the air and ground.

The U.S. Environmental Protection Agency announced the settlement Thursday with Veris Gold USA, a subsidiary of the Vancouver-based Veris Gold Corp.

Veris Gold failed to properly report the chemical releases and other waste-management activities at its Jerritt Canyon mine in Elko County about 50 miles north of Eureka, the EPA said. The releases during 2007 and 2008 involved 10 different chemical compounds, including arsenic, mercury, lead, nickel, zinc, copper, cobalt and cyanide, the agency said.

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Gold to go, anyone? These ATMs can help


By Katie Holliday
CNBC / Yahoo! Singapore

Vending machines usually conjure thoughts of food and drinks, but one firm is tapping consumers’ love for something much more expensive: gold.

Two Smart Gold ATMs – vending machines that dispense a range of 24 karat gold items – were launched in Singapore this week at the Marina Bay Sands Hotel and Resorts World Sentosa, luxury venues that attract wealthy Singaporeans and a plethora of tourists.

“We chose Singapore because it’s the center of Asia, which is the center of world gold consumption,” said Kong Kok Chee, director of Asia Gold ATM, the company behind the launch, referring to Singapore’s popularity as a finance and business trading hub for the region.

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Gold miners ordered to hand back land to natives in Colombia

By Cecilia Jamasmie

Embera girl

Embera girl

A Colombian legal tribunal ordered 11 gold mining companies this week to stop operations in the northwest of the country and return the land to Embera Katio tribe, which used to live in the area.

The ruling, RCN reports (in Spanish), is the first of its kind in the South American nation. It restores a 50,000-hectare in the West coast Choco department to the about 7,300 Embera people, which were forced out over the past five years by illegal and violent armed groups.

The decision orders the National Mining Agency, in coordination with the military, to “remove people from outside the community who are carrying out mining activities within the reserve,” a unit of Colombia’s Ministry of Agriculture and Rural Development said in a statement Thursday (in Spanish).

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Gold Reserve Awarded $740 Million From Venezuela Takeover

By Pietro D. Pitts and Nathan Crooks

venflag120A World Bank arbitration court ruled that Venezuela must pay $740 million to Gold Reserve Inc. (GDRZF) for taking its Brisas gold and copper project in 2008.

A three-member panel concluded the company was owed $713 million for the project, $22.3 million for interest and $4 million for legal and technical costs, Spokane, Washington-based Gold Reserve said yesterday in a statement. Payment of the award is due immediately and the company said it has commenced steps to ensure collection.

“We feel vindicated by the tribunal’s clear conclusion that the Venezuelan government acted unlawfully,” Gold Reserve President Doug Belanger said in the statement. “There are well documented procedures in place for identifying and attaching sovereign commercial assets.”

Former President Hugo Chavez nationalized assets in Venezuela’s energy and mining industries to increase state control over the economy before he died in 2013. The nation is now involved in 28 unresolved cases filed at the World Bank’s International Centre for Settlement of Investment Disputes, or ICSID, by companies including Exxon Mobil Corp. (XOM) and ConocoPhillips. (COP).

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Gold price seen near tipping point for mine cuts, closures

By Nicole Mordant

minecar160The price of gold, down more than a third in three years, is approaching the tipping point where the mining industry would see a spike in the number of producers reducing output or even shutting down operations.

Several mines globally have already suspended output in the past 18 months, but not as many as industry watchers expected as producers focused on slashing costs and reworking mine plans to extract more profitable, higher-grade ounces.

But with bullion’s slide this week to a nine-month low of $1,208.36 an ounce, those defenses may not be enough.

“$1,200 is a critical level. The industry has geared itself around $1,200,” said Joseph Foster, portfolio manager at institutional investor Van Eck Global. “If it falls below that level, then there are a lot of mines around the world that are really going to struggle.”

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More Australian mining failures expected

Richard Karn

Richard Karn

Starved of cash, nearly 150 mining companies listed on the Australian Stock Exchange went into bankruptcy during the fiscal year that ended June 30, and another 23 have gone under since then. Richard Karn, managing editor of the Emerging Trends Report, believes a fresh wave of failures is expected when the quarter ends September 30, and a major shakeout at some point appears likely. But the situation isn’t grim for all the specialty metal companies down under. In this interview with The Gold Report, Karn shares a handful of names with the wherewithal to survive the onslaught.

As managing editor of The Emerging Trends Report, Karn has a broad, multidisciplinary background and a working knowledge of precious and specialty metals, as well as considerable research, analytical and writing experience. The first nine Emerging Trends Reports have been reevaluated and updated published in e-book form, as Credit & Credibility. He has written for publications ranging from Barron’s, Kitco and Fullermoney to Financial Sense Online.

Source: Special to The Gold Report

The Gold Report: When we interviewed you in April, you said the pending demise of zombie companies on the Australian Stock Exchange (ASX) was a good thing because there were too many deadbeats in the specialty metal sector. Has that process worked its way through the system or are there still some “walking dead” making it difficult for investors to pick out the promising companies?

Richard Karn: Unfortunately, the latter is still the case. According to the Australian Securities & Investment Commission (ASIC), 146 companies in the mining sector went into administration (bankruptcy) during the fiscal year ending June 30, 2014. As Luke Smith pointed out last month in your publication, yet another 226 resource companies did not have sufficient cash to meet their anticipated expenditures for this quarter.

Since then another 23 resource companies have failed, and as of Aug. 25, 2014, 17 more had not paid their listing fees and were suspended from trading on the ASX.

So, no, we do not think the process is over.

TGR: How are companies accessing capital today?

RK: By and large, they’re not. We’ve been picking up on some positive activity in the base and precious metal sectors, but that mostly has yet to trickle through to the specialty metal sector.

Alkane Resources Ltd.increased gold reserves by 47% this year.

In the case of specialty metal companies, most are unable to raise money either from the capital markets or from their shareholders. Failed or abysmal uptake of rights issues and the like continue to be common. Many companies are literally being starved of cash.

TGR: Can companies sell some of their assets to cover costs on other projects? Continue reading

More on Gold and the World Fire That’s Brewing

By Larry Edelson
Swing Trading

edel140Oodles of readers want my head for turning temporarily bearish on gold again. They say I flip-flop too much.

They say I don’t know whether I’m coming or going. They think I’ve always been dead wrong on gold.

But the bottom line is this: I have nailed every major turn in the price of gold and other precious metals, including …

 The high at $850 in January 1980 and gold’s subsequent 20-year bear market.

 The precise bottom in September 2000 at $260 an ounce, just five dollars above the final bear market low at $255.

 The initial blast off that carried gold to over $1,000 an ounce by 2008.

 The 2008/2009 meltdown in all markets, when I told my subscribers to increase their allocation to gold from 15 percent to 25 percent, when gold fell below $700 …

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