OceanaGold still waiting on formal order over Didipio dispute

OceanaGold (TSX: OGC) said on Monday that has not received any formal order from the Philippines Court of Appeals regarding its request to allow interim operations at its Didipio gold-copper mine.

The company applied for an injunction in July 2019 as a temporary measure to operate while it challenges the legality of the order issued by
the governor of the Nueva Vizcaya province to restrain activities at Didipio pending renewal of the Financial or Technical Assistance Agreement (FTAA).

OceanaGold said that it has recently been made aware – from social media –that the Court of Appeals has denied its application for an injunction and the company is seeking confirmation.

Didipio has a Measured and Indicated resources of 1.3 million ounces of gold and 160,000 tonnes of copper

Since July 2019, local government units from the province have blocked access to and from the Didipio mine site.

Authorities claim they have been largely bypassed in the permit renewal process, which existing laws place under the national government’s realm.

Later in July 2019, the company suspended underground mining at the site, located 270 km north of the capital of Manila.

“If the denial of the injunction is in fact accurate, the company will continue to defend its right to operate the Didipio Mine in the interim whilst it completes the FTAA renewal process,” the company said in a press release.

“To this end, OceanaGold intends to follow the usual appeal process with the Court of Appeals, and if necessary, to the Supreme Court of the Philippines.”

The company argues that the local government Code of 1991 (Republic Act No. 7160) does not grant the power or authority to the provincial
governor to restrain any aspect of the Didipio Mine operations.

OceanaGold said that it will continue to work with the national government to finalise the renewal of the FTAA and remain open to the opportunity to engage with the provincial governments.

Didipio, which began production in 2013, has Measured and Indicated resources of 1.3 million ounces of gold and 160,000 tonnes of copper.

Midday Monday, OceanaGold’s stock was down 3.5% on the TSE. The company has a C$2.04 billion market capitalization.

B2Gold hits record quarterly revenue

B2Gold (TSX:BTO)(NYSE: BTG) said on Monday that its consolidated gold revenue for the second quarter of the year reached a record-high of $442 million, a 65% increase from the same period last year.

The mid-tier Canadian miner attributed the solid results to a 31% rise in the average realized gold price during the period and to sales jumping by 26%.

The Vancouver-based company also saw overall production increase by 15% in the April to June period to 239,574 ounces, compared to the same quarter in 2019 and not including discontinued operations.

The increase was driven by its Fekola mine in Mali, B2Gold said, where production climbed by 29% to 147,424 ounces.

The company attributed the output jump to the expansion of the Fekola mining fleet and the optimization of the pit designs and mine plan for 2020. The improvements have provided access to higher grade portions earlier than previously anticipated, the company said.

B2Gold said it is on track to meet this year’s gold output guidance of between 1 million and 1.05 million ounces.

More to come…

Centamin reviewing expansion options as results exceed forecast

Egypt-focused gold miner Centamin (LON:CEY) (TSX:CEE) said on Monday it was looking at expansion opportunities as soaring bullion prices and the country’s decision to open up its riches to foreign capitals unlock opportunities.

Gold prices have hit nine-year-highs of about $1,800 an ounce in recent weeks, boosting miners’ bottom-line and spurring merger and acquisition activity.

Chief executive Martin Horgan said current gold prices have made “things interesting” in the company’s ability to do transactions. He acknowledged, however, that striking a deal could prove challenging, given that all gold miners are benefiting from the metal’s price strength.

Hogan also highlighted Egypt’s new drive to attract foreign miners. Until February this year, Centamin was the only international company with a mining license in the country. But on Feb. 13, Canada’s Aton Resources (TSX-V: AAN) secured a mining permit — the first one in 15 years.

A month later, Cairo began auctioning 56,000 square kilometres of exploration concessions in the Eastern Desert.

It recently extended the auction’s original July deadline to September 15 due to delays caused by the coronavirus pandemic and to extend the opportunity to more potential bidders.

Centamin’s boss said the company would participate in the ongoing auction.

“We have significant infrastructure in Egypt and leveraging off that would be a good thing,” Horgan said, adding that the company was waiting for details on the process before preparing any bid.

Unlike Egypt’s natural gas sector, its mineral wealth remains largely under-explored and undeveloped.

The lack of activity was due, in part, to the nation’s past system of royalties and profit-sharing agreements. They made it difficult and unprofitable for miners to explore for and exploit minerals. 

Sukari shines

Centamin reported that its flagship Sukari asset, the only operating gold mine in Egypt, produced 130,994 ounces of gold in the March-June period, above the 115,000 ounces anticipated in April.

The company attributed the better-than-expected output figures to higher mill feed grades. Deferring plant maintenance shutdowns to the third quarter, a coronavirus-related precautionary measure, also helped, Centamin said.

Net cash generated in the period totalled $144 million, a 151% improvement year-on-year. As of June 30, cash and liquid assets were sitting at $367 million,  after the first interim dividend distribution of $69 million, paid on May 15.

While the gold miner said the current pandemic has not affected significantly its business, it decided to lowered guidance for the year to reflect minor delays in the supply chain.

Centamin now expects to mine between 510,000 and 525,000 ounces of gold this year, slightly down from a previous range of 510,000 to 540,000 ounces.

Egypt’s Ministry of Petroleum and Mineral Resources revealed last month the discovery of a gold deposit with estimated resources of 1 million ounces.

While the government did not provide details on the methodology used to determine the deposit’s size, it noted it expected at least $1 billion in investments related to the development of the deposit over the next 10 years.

Nornickel reports another fuel spill in the Arctic

Russian mining company Norilsk Nickel reported that a pipeline belonging to Norilsktransgaz, which is part of the Norilsk Nickel Group, depressurized during the transfer of aviation fuel in the vicinity of ​​the village of Tukhard, located on the Gydanskii tundra.

In a media statement, the company said that the spill poses no threats to the health of people living in the area and that crews are already taking measures to recover the spilt fuel. Emergency services are also at the scene. 

According to Nornickel, the leak happened at about 11:15 am on Sunday, July 12, 2020. Preliminary data revealed that close to 44.5 tonnes of fuel were spilled during the depressurization, which lasted for about 15 minutes.

The miner said that Norilsktransgaz is conducting an internal investigation on the incident and has already submitted some information to Russia’s Emergency Situations Ministry.

This is the second fuel spill that Nornickel reports in the Arctic in less than two months. The previous one took place in late May at Nornickel’s Heat and Power Plant № 3 near Norilsk, in north-central Russia. The accident happened when the plant’s reservoir cracked and released 20,000 tonnes of diesel into the nearby areas, contaminating land and rivers that drain into a lake linked to the Kara Sea.

Russia’s environmental watchdog demanded over $2 billion in damages for the May spill, while the company had said that clean-up costs would add up to $150 million.

Mining companies have not left Mexico – officials

Mining companies operating in Mexico have continued to invest in their operations, according to the Economy Secretariat’s Undersecretary of Mining Francisco Quiroga Fernández.

Talking at the virtual conference “Mining Reactivation in the Face of the New Normal,” organized to celebrate Miner’s Day in Mexico, Quiroga Fernández said that the covid-19 pandemic did not force local or foreign companies to shut down permanently or cancel projects, as most of those projects are conceived for 10 to 15-year terms.

Francisco Quiroga Fernandez moderated the conference ‘Mining Reactivation in the Face of the New Normal.’ Governors from mining states and companies shared their individual and joint efforts to reactivate the country’s industry.

According to the government official, even though exploration has sunk and production is expected to fall by 16% in 2020, mining activities are gradually recovering. In his view, ‘gradually’ is the keyword, as it is important that the sector’s reactivation is done following strict health and safety guidelines that give no room for possible setbacks.

About 70% of mineworkers have gone back to work, while 30% of mine personnel that have the ability to work from home are still doing so, NGO Mexico Minero reports.

Together with the paced reactivation of the mining sector, Quiroga Fernández expects also to be able to kickstart infrastructure projects in a number of communities that surround mining operations. His office is counting on a Mining Fund that currently holds some $75.8 million from special levies charged to mining companies between 2015 and 2018. 

The Undersecretary of Mining also said that he expects a positive push for the industry following the launching of the Canada-U.S.-Mexico Agreement, which formally replaced NAFTA last week.

In his view, the signing of the deal sends a positive message to investors as it implies that Mexico’s mining sector is aligned with productive chains in both Canada and the US. 

Japan to strengthen control over rare metal reserves

In the wake of supply disruptions of certain metals caused by the covid-19 pandemic, Japan has decided to launch a series of measures to address potential supply risks from geopolitical instability or future pandemics.

A report by market consultancy firm Argos states that one of such measures implies ramping up government control over strategic reserves of 34 rare metals and increasing inventories of some strategically important metals such as cobalt.

According to Argos, the Ministry of Economy, Trade and Industry presented a proposal to the central government where it asks for the State to take full control of strategic rare metals reserves by setting target levels for stocks, as well as plans for procurement and the release of supplies from the reserve. 

The Ministry of Economy urged more flexibility in determining inventory levels for each rare metal, after taking into account their strategic importance, geopolitical risks and domestic demand

The ministry also urged more flexibility in determining inventory levels for each rare metal, after taking into account their strategic importance, geopolitical risks and domestic demand. 

For national security considerations, the department asked the Shinzo Abe cabinet to keep inventory targets and actual stockpile levels secret.

“Japan has designated 34 ‘rare metals’ – including rare earths – as having the potential for stockpiling and currently holds reserves of seven — nickel, chrome, tungsten, cobalt, molybdenum, manganese and vanadium,” Argus report states. “The stocks can cover 60 days of the country’s consumption, after including non-obligatory privately-held stocks equivalent to 18 days of consumption. The strategic reserves are defined as being the property of state-owned agency Jogmec and are managed by the agency in its storage bases.”

Besides managing its internal reserves, the Asian superpower has also been securing its external supply of rare earths. Back in June 2019, Japan Australia Rare Earths BV (JARE), a joint venture between state-owned Japan Oil, Gas and Metals National Corp (JOGMEC) and Sojitz Corp., approved a generous financing package for Australia’s Lynas Corp (ASX: LYC), expanding the country’s control over the company’s rare earths output.

The deal was signed amid China’s threats to use its market supply dominance as a weapon in the trade war with the United States.

At its Mt Weld mine in Western Australia, Lynas produces neodymium and praseodymium, key ingredients in permanent magnets used in electric vehicles, energy-efficient consumer devices, and in the aerospace and defence industries.

Hecla Mining weighs up options for San Sebastian mine

American silver producer Hecla Mining (NYSE:HL) said on Friday it was mulling options for its San Sebastian silver-gold mine in Mexico, which is due to cease production in the third quarter of the year.

The Coeur d’Alene, Idaho-based miner brought the past-producing mine back to life in late 2015, initially planning a two-year mine operation at the Durango state asset.

Exploration at the property allowed Hecla Mining to move operations underground in 2018.

As San Sebastian runs out of ore, with milling slated to stop in the last quarter of the year, the company continues to study the possibility of mining sulfide ore.

“Mining of oxide material is expected to be completed in Q3 and milling in the fourth quarter of 2020,” Hecla said in a production update for the three months ended on June 30.

San Sebastian production for the quarter was affected by lower grades and a government-mandated shutdowns of four weeks to help slow down the spread of coronavirus, Hecla said.

The mine churned out 58,842 ounces of silver and 1,331ounces of gold in the April-June period, down 66% and 63%, respectively, from 463,735 ounces and 3,547 ounces in the same quarter of 2019.

Overall, the company’s overall silver production rose 13% in Q2 to 3.4 million ounces, while gold output fell 1% to just shy of 60,000 ounces.

All of the company’s five mines were in operation during the quarter, although the Casa Berardi and San Sebastian mines had to halt operations to comply with covid-19-related government orders.

Hardest hit metal

Silver was the commodity hardest hit by mine closures mandated by governments to stop the spread of the coronavirus.

Prices for the precious metal, however, are forecast to surpass the $21 per-ounce-mark later this year. The gold:silver ratio – the quantity of silver ounces needed to buy an ounce of gold – is expected to drop below 90, The Silver Institute said on Thursday.

Silver prices averaged $16.65 an ounce in the first half of the year, reaching $17.84 per ounce at the end of June. It has since broken through the $18 per ounce barrier.

Mexico, the world’s top producer of the metal, is facing in 2020 one of the deepest recessions in its history as an already weak economy can barely cope with the impact of the coronavirus outbreak.

The country’s economy is forecast to contract 6.7% this year, deeper than during the devastating Tequila Crisis of the mid-1990s, the latest Citibanamex analysts survey shows.

Mexico is responsible for nearly 23% of world production of silver, churning out more than 200 million ounces last year, up from 196.6 million ounces in 2018.

It also has major copper and zinc mines, operated by Grupo Mexico and Southern Copper, and produces a significant amount of gold, making the mining sector responsible for about 4% of the nation’s gross domestic product.

American Lithium buys back royalty on TLC project, stock soars

American Lithium (TSXV: LI) announced Friday it will buy back 1.5% of the existing gross overriding royalty pertaining to its wholly owned TLC lithium claystone property from Nevada Alaska Mining, an arm’s length party.

The TLC project, located approximately midway between Las Vegas and Reno near the town of Tonopah, Nevada, is a new lithium claystone discovery within in the same basinal environment as Albemarle’s Silver Peak lithium mine.

The TLC discovery is amongst a handful of potential lithium deposits in Western North America capable of development

With an estimated 5.3 million tonnes of measured and indicated lithium carbonate equivalent resources, and an additional 1.7 million tonnes inferred resources, the TLC discovery is amongst a handful of potential lithium deposits in Western North America capable of development.

Nevada Alaska currently holds a 2.5% gross overriding royalty on commercial production from the property, and the buyback would reduce American Lithium’s royalty obligation on TLC to 1.0%.

As consideration, American Lithium will pay $150,000 cash and issue 843,750 common shares to Nevada Alaska at a deemed price of C$1.36 per share.

Meanwhile, American Lithium has entered an agreement with a separate arm’s length party to acquire a series of lode mining claims totalling approximately 2,000 acres northwest of the TLC property. The company will issue four million common shares at a deemed price of C$1.36 per share to acquire these land claims, which it says are highly prospective for lithium claystone based on projections from recent drilling.

Shares of American Lithium soared to a new 52-week high of C$2.03 on Friday. The stock was trading 17.6% higher on the TSX Venture Exchange by 1 p.m. EDT.

The Vancouver-based lithium explorer has a market capitalization of approximately C$184.2 million.