Junior Mining Sector Responds to Predatory Short Selling; Launches “Save Canadian Mining”

Today Terry Lynch, CEO of Chilean Metals Inc. launched Save Canadian Mining – an advocacy group created to give voice to the specific interests of Canada’s junior mining sector. Save Canadian Mining will work to raise awareness for this important segment of the country’s economy and advocate for positive change on their behalf with government and regulatory agencies. Specifically, the campaign will be lobbying for revisions to existing marketplace rules and regulations that have created severe challenges for junior public companies in the sector.

“The current rules in our equity markets have created an environment for predatory short selling practices to thrive, particularly on our vulnerable junior markets,” said Mr. Lynch. “For smaller cap mining companies, short selling activity spooks true investors into selling prematurely, effectively stunting the growth of these businesses at critical early stages. Save Canadian Mining is dedicated to helping ensure Canada’s capital markets remain viable for junior miners now and into the future.”

In 2012, the Investment Industry Regulatory Organization of Canada (IIROC) and the Canadian Securities Administrators (CSA) removed a 142-year securities trading rule known as the “tick test.” The tick test restricted short selling to positive price changes at the time of the sale (i.e., an investor could only short a stock if it was on an upward trajectory). This change was applied not only to the main listing venue of the TSX Venture Exchange, but was equally applied across all Canadian trading venues of which there are 14 today. Since the removal of the tick test, Canadian markets have evolved, and there now exists a dynamic where Canada’s junior markets are finding it increasingly difficult to raise capital.

“Short selling activities have increased in the junior mining market since 2012,” said Lynch. “The advent of high frequency trading and algorithmic trading are exploiting the combination of a lack of a tick test, with 14 different trading markets to the detriment of one of Canada’s most important industries.”

Save Canadian Mining plans to meet with government in the coming weeks to share the stories of many small businesses in the mining sector. The organization will also be sharing its desired regulatory amendments with government and the OSC for consideration shortly.

Save Canadian Mining has already attracted the support of many prominent voices in the mining and investment community, including: Brady Fletcher, Managing Director, and Head of the TSX Venture Exchange; Eric Sprott of Sprott Mining; Garry Clark, Executive Director of the Ontario Prospectors Association (OPA); and Chris Hodgson, President, Ontario Mining Association.

“The practice of short-selling plays a role in maintaining a healthy, efficient market. However, TSX Venture Exchange understands that certain changes to market operations in Canada, specifically related to the removal of the tick test, may have had unintended negative consequences for our junior, or more illiquid issuers,” said Brady Fletcher Managing Director, Head of TSX Venture Exchange. “We look forward to working with Save Canadian Mining and industry stakeholders to engage Canada’s regulators in evaluating the reinstatement of a tick test, and in pursuit of continued improvements to our globally unique venture market, many of which were tabled for discussion in our 2019 Trading Roundtable report available at https://www.tsx.com/resource/en/2011/.”

“As an active investor in the mining sector, I recognize the need to reinstate the tick test rule. Save Canadian Mining is providing leadership for the junior mining community during an important time. Regulations need to change and this campaign is going to help achieve those changes.” – Eric Sprott, CEO, Sprott Mining Ltd.

“The Ontario Prospectors Association (OPA) is supporting Save Canadian Mining in its mission to work with regulators to make some very specific changes to the investment landscape for junior miners in Ontario and Canada.” – Garry Clark, Executive Director of the Ontario Prospectors Association.

Broad support for the initiative is reflected in the following quotes from prominent industry representatives:

“The Ontario Mining Association (OMA) supports Save Canadian Mining. We understand that a strong mining sector depends on the ability of junior miners to attract investment and grow into larger Canadian companies. We are pleased to see campaigns like this emerge to ensure the health of the sector.” – Chris Hodgson, President of the Ontario Mining Association

“As the CEO of a junior mining and exploration company, I am very encouraged by this announcement. It is becoming increasing difficult for companies like ours to raise the capital required to become successful in Canada and we fully support Save Canadian Mining.” – Wayne Tisdale, CEO, 21c Metals Inc.

“Capital formation is an integral part of company building. It provides the resources necessary to hire labour, purchase equipment, and de-risk projects,” said Daniel Barankin, CEO of 6ix and a founder of Save Canadian Mining. “The restoration of the tick test rule will make Canadian companies more competitive.”

For additional information please go to
https://savecanadianmining.com

Contact:

Terry Lynch
Founder
Save Canadian Mining Inc.
Cell (647) 448 8044
Office (647) 649-7283

Barrick Gold begins sale of non-core assets

Barrick Gold Corp. [ABX-TSX; GOLD-NYSE] has struck a deal to sell its 50% stake in Kalgoorlie Consolidated Gold Mines (KCGM) in Western Australia to Saracen Mineral Holdings Ltd. [SAR-ASX] for US$750 million in cash.

KCGM is a joint venture which owns and operates the Super Pit gold mine. It ranks as one of Australia’s largest gold mines, with average annual production of 660,000 ounces. Newmont Goldcorp Corp., [NGT-TSX; NEM-NYSE] holds the other 50% stake in the joint venture. Operations began at KCGM in 1989 and the mine has produced 21 million ounces of gold over the last three decades.

“The sale of our non-operating interest in KCGM represents the first step in our plan to realize in excess of US$1.5 billion from the disposal of non-core assets by the end of next year,” said Barrick President and CEO Mark Bristow. “While this iconic gold mine has been a valuable contributor to Barrick over the years, the asset does not fit with our strategy of operating mines that we own,” he said. “The sale allows us to further focus our portfolio on core operations,’’ he said.

Barrick shares advanced on the news, rising 1.78% or 39 cents to $22.30. The shares are currently trading in a 52-week range of $15.37 and $26.69.

Bristow said Barrick was pleased to have achieved a successful outcome following a competitive sale process and was confident that Saracen would be an excellent partner at KCGM going forward. “Proceeds from the sale will be used to further strengthen the balance, invest in our future and support our commitment to deliver returns to shareholders,” he said.

News of the sale comes after Barrick released its third quarter financial results. It has predicted that its annual gold production will remain flat at between 5.15 to 5.6 million ounces over the next five years.

The world’s second largest gold miner beat street estimates by reporting an adjusted third quarter profit of US$264 million or US $0.15 a share. That was ahead of the consensus forecast of US $0.12 a share, and compares to a year ago profit of US$89 million or US$0.08 per share.

Meanwhile, Barrick said it remains on track to achieve the upper end of its production forecast in 2019 (5.15 to 5.6 million ounces), while costs are expected to be at the lower end of the forecasted US$870 to US$920/oz.

The company said its guidance for copper production this year remains unchanged at 375-430 million pounds at an all-in-sustaining-cost range of US$2.40 to US$2.90/lb.

Barrick has mining operations and projects in 15 countries, including Canada, Argentina, Chile, the Democratic Republic of Congo Senegal and the United States. The company recently moved to consolidate its position as one of the world’s leading gold producers by agreeing to merge with Randgold Resources Ltd.

Teck defers $500 million of planned spending

Teck Resources Ltd. [TECK.B-TSX; TECK.A-TSX; TECK-NYSE] on Thursday October 24 released its third quarter financial results and said it is reducing costs and cutting spending for the balance of 2019 and 2020.

“Over the past few years, we have focused our attention on maximizing production to capture margin during periods of higher commodity prices,” said Teck President and CEO Don Lindsay. “However, current global economic uncertainties are having a significant negative effect on the prices for our products, particularly steelmaking coal,” he said. “As a result, we are focusing our attention on our RACE21 program to improve efficiency and productivity across our business, the development of the QB2 [Quebrada Blanca Phase 2] project, which is key to Teck’s future growth, and the execution of our priority project at Neptune.”

Quebrada Blanca Phase 2 is a low-cost, long life copper project that is being built by Teck and project partners in northern Chile. The other partners are Sumitomo Metal Mining Co. Ltd., Sumitomo Corp., and the Chilean state agency known as ENAMI. The project is targeting completion by the fourth quarter of 2021.

RACE21 is an innovation-driven efficiency program involving the renewal of Teck’s technology infrastructure.

While Teck said its financial position is strong, in light of uncertain economic conditions, it has implemented a company-wide cost reduction program and will defer some planned capital projects, targeting reductions of approximately $500 million from previously planned spending through the end of 2020.

Teck’s Class B common shares declined on the news, falling 5.26% or $1.16 to $20.88 on volume of 1.4 million. The shares are currently trading in a 52-week range of $19.34 and $34.31.

Teck is Canada’s largest diversified resource company with operations and projects in Canada, the U.S., Chile and Peru. It is also producer of copper, zinc, steelmaking coal and energy.

In the third quarter, Teck beat street estimates by reporting an adjusted profit of $403 million or 72 cents a share, down from a year ago profit of $466 million or 81 cents per share. The adjusted profit for the third quarter of 2019 was above the consensus estimate of 66 cents.

However, the company said coal sales in the quarter were negatively impacted by material handling issues and planned construction outages related to an ongoing expansion of the Neptune terminal in Vancouver, British Columbia.

Teck has warned that the capital expenditure for the Neptune expansion has increased to $750-$800 million, up from only $400 million previously. However, it said the project remains on track for completion in the first quarter of 2021.

Despite stronger coal production of 6.5 million tonnes in the quarter, coal sales of 6.1 million tonnes were below the company’s guidance range of 6.3-6.5 million tonnes.

While Teck reaffirmed its 2019 met coal production guidance of 25.5-25.6 million tonnes, the fourth quarter production forecast of 6.7 million tonnes is lower than expected due to planned outages at both the Neptune and Ridley terminals. The Ridley terminal is located near Prince George, B.C.

Your Step by Step Side Hustle Guide

This post Your Step by Step Side Hustle Guide appeared first on Daily Reckoning.

If you think vending machines are just for candy and soda, think again.

Whether you’re in need of a fresh slice of pizza, a new pair of running shoes, or refill on your glass of Moët, there are vending machines that can help with that now.

According to the National Automatic Merchandising Association (NAMA), there are over 5 million vending machines in the U.S. alone.

The vending machine industry generates over $64 million in profits each year. And three out of every four vending machine transactions are in cash.

If you’ve been searching for a side business that has low overhead, requires minimal technical skills, and will generate passive income on a steady basis, starting a vending machine business could be what you’re looking for.

The vending machine space is growing as more entrepreneurs see the advantages. For less than a few thousand dollars, you can buy your own machine and start stocking it or you can buy into an existing vending machine franchise where the business plan is laid out for you step by step.

With all kinds of options to choose from, where do you begin? Today I’m going to walk you through how to start your own vending machine business in 6 steps from scratch.

How to Start a Vending Machine Business

Step 1: Choose Your Vending Machine

When you hear the words “vending machine,” what comes to mind? If you’re like me, you imagine the vending machines from yesteryear that take a dollar in exchange for a chocolate bar or bottle of soda.

These would be classified as your traditional food and beverage vending.

Food and Beverage

Most of the current market consists of these machines. Placed in the right location, the inventory turnover can be high and depending on where you source your product, you can walk away with some fat profits.

If you decide to start with a food and beverage vending machine, consider what types of snacks and drinks your location will want.

And if your vending machine is not the only option around, consider stocking your machine with exotic beverages from overseas or some other type of snack that differentiates your machine from others.

Bulk

Bulk vending machines are another type you can choose to own. These are the machines you’d gravitate to as a child, typically found in malls and play areas. They’re usually stocked with toys, gumballs, bouncy balls, and bulk candy.

These products and machines are generally some of the cheapest to own, as they carry the least amount of overhead due to being manually operated. If you can find the right location, these machines are perfect for first-timers wanting to get their feet wet in the vending machine industry.

Specialty

I kid you not, in Beverly Hills they have vending machines in malls that dispense gourmet snacks like caviar, escargot, and bottarga. Specialty machines offer something different than your typical run-of-the-mill machines.

From electronics, to clothes, to hot beverages and champagne, you can find specialty machines that will dispense just about anything. Depending on the type of specialty products you carry, your take home profits can be significantly higher. The tradeoff is these machines are usually very niche, so your inventory turnover may be slow.

Whatever kind of vending machine you decide to use, it’s important to tailor your vending machine offerings to your target audience. Always think who will be interacting with your machine and how can you meet their needs.

Step 2: Find a Location

The location of your machine will be make or break. Do your research and think critically about the people you are targeting. You want to meet a specific audience’s needs in a specific place.

For example, if you place a food and beverage vending machine in your local gym, you may not want to stock it with soda and chips.

Protein bars, pre-mixed shakes, and electrolyte-infused drinks would provide more value to gym goers.

Another example would be a laundromat. You’ll have more luck placing a specialty machine stoked with fabric softener and small packages of detergent than you would with maybe candy or beverages.

Think about who your target audience will be and what type of products would satisfy their needs. On top of meeting the needs of your target market, you also need to calculate your costs.

Because you will likely be placing your vending machine in a space owned by someone else, they’ll be collecting a commission from your earnings. The average is between 10% to 25% of your revenue, but you can negotiate these terms.

Once you reach out to the owner of the location you want to use, try your best to pitch the machine as a passive income opportunity for both parties. If the owner is sold, draw up a contract with the terms and conditions, as well as the quoted commission fees. Ideally, you should have a lawyer look over the contract before signing.

One last thing to consider about your location are your state laws. Do some research into local regulations online or ask someone at your local Chamber of Commerce. Some states restrict the type of snacks and beverages you can offer based on location.

Step 3: Financing

While the vending machine industry has much lower overhead than most businesses, you still need a few thousand dollars to get your business off the ground. If you’re interested in more specialty machines, your costs can climb up to $10,000, not counting inventory.

Two ways to secure financing:

  • Short-term loan: This is the best option for anyone who already owns a small business and has a proven business financial history. A short-term loan will offer a shorter payback period with higher interest rates than a long-term loan, but it can be helpful because they are easier to qualify for.
  • Equipment financing loan: This type of loan is best for people without a business financial history. The loan offers a fixed interest rate and uses the equipment itself as collateral in case of default, allowing you to get quick access to money without undergoing the same financial scrutiny you might receive obtaining a short-term loan.

Step 4: Buy Your First Vending Machine

After you’ve secured the capital you need, it’s time to pony up and buy your first machine. You can buy new or used, or lease. Do your research and find out which brands are best for the type of product you intend to carry.

Craigslist.org is a good place to look for vending machines. UsedVending.com is another great resource. eBay.com and Amazon.com are also good sources to find new and used machines. You can also go to vending machine dealers, just search online for the one nearest you.

Step 5: Buy Your Inventory

Think about your customers’ needs at the particular time and place where they’ll encounter your vending machine. What products will help them at that moment?

Try to fulfill a niche or gap in the market. This will help differentiate your machine from the competition. When you search for items, make sure you pay close attention to price per unit. Be sure to have your machine’s specs in hand to ensure the product will fit into the machine properly also.

Step 6: Maximize Profits

Once your vending machine is set up and running, you’ll start to see profits roll in. The work isn’t done yet. Now you need to focus on maximizing your profits.

Because the industry has such a low barrier to entry, there’s high competition. Put your time and effort into these three things to ensure you get the most profit:

  • Optimize your inventory – A lot of old vending machines make you track your inventory manually. Once you have more than a machine or two, it may make sense to invest in an inventory management system that can help streamline or automate this process.
  • Boost your customer service – This will be one of your top differentiators. Make sure your machines are functional, easy-to-use, and fully stocked. Solicit feedback from customers and address any complaints right away.
  • Scale up – Once you feel like you’ve got a handle on the operational and financial side of the business, start to think about ways you can scale. Buying more vending machines is the next logical step. What new markets can you expand into?

The possibilities are endless once you know how the business model works. Follow these six steps and you can start generating passive income sooner rather than later.

To a richer life,

Nilus Mattive

Nilus Mattive

The post Your Step by Step Side Hustle Guide appeared first on Daily Reckoning.

A first glimpse into the Investing in Africa Mining Indaba 2020 programme

Optimising growth and investment in the digitised mining economy

The 26th edition of the Investing in African Mining Indaba will offer delegates new insight into issues facing Africa’s resources sector. The event, run over four days, offers high-quality, carefully researched content to meet the sector’s needs, generate new ideas and address current challenges.

According to their new head of content, Tom Quinn, “This year we’re building on the success of the 2019 Mining Indaba in terms of the high level of government participation and the substantial increase in the number of investors we saw attending the event. We believe that mining executives can fit in a month’s worth of meetings in four days”.

“Overall, the focus of the event will be on investment in the digital economy of mining. Investment in African mining is, after all, the primary purpose of Mining Indaba and in 2019 we saw more investors attending the event than at any other event – over 600. In addition to the VIP Investor Lounge, the junior mining showcase, the Investment Battlefield, we’re improving the business matchmaking platform so that it’s faster and easier for investors and mining companies to connect and engage”.

Tom also highlighted new additions to the programme:

  • General Counsel Forum: This forum will bring together Africa’s finest legal minds (general counsels, in-house legal teams and established law-firms) to debate and share knowledge on Africa’s complex resources sector. It’ll focus on how companies can navigate the opportunities and challenges in the sector by strengthening portfolio management, examining falling productivity against increasing costs and M&A market updates. The forum will take place on February 6, in partnership with Africa Legal.
  • An extended Mining 2050 programme: the impact of technology on the future of mining operations will now be discussed over two days instead of one, under the theme ‘Optimising growth in the fourth industrial revolution’. Key topics include green and sustainable technology, waterless mines, artificial intelligence, robotics and job creation, using blockchain technology for sustainability, and mitigating digital risk.
  • Resource nationalism and investor risk is a main stage topic where sector leaders will be analysing and assessing exposure in current African markets and possible strategies to mitigate risk.
  • Climate change and the industry’s role in decarbonisation is a frontline issue for investors and the topic will be discussed during main stage sessions and the dedicated sustainable development day.

Tom assures delegates that Mining Indaba will again provide attendees unmatched access to the entire mining industry value chain and influential players in the market, with “four days of quality content, deal making and networking opportunities”.

For more information, please contact:

From Mining Indaba:

Joanna Kotyrba

From R&A Strategic Communications:

Katherine Bester and Alexia Nichas
indaba@rasc.co.za
+27 (0) 11 880 3924

The Trudeau years and mining

by Leonard Melman

The Canadian mining industry entered a new era on October 19, 2015 with the election of Justin Trudeau as Canada’s new Prime Minister. His Liberal Party gained a solid majority in the House of Commerce, thereby giving him a relatively free hand for the next four years.

His initial policy paper outlining his goals contained no specific statement on resource extraction industries, but rather concentrated on goals that might be regarded as ‘politically correct’ including support for abortion, women’s rights, Indigenous support, and support for efforts to control so-called global warming or climate change.

Judging by the TSX Venture Exchange Index, the mining world greeted Trudeau’s arrival with some optimism as the index rose from near 600 in late 2015 to around 820 in mid-2016, but the performance ever since has been mediocre and that index now stands below 600 as of September 2019. The number of junior miners has dropped during the Trudeau years.

One of the conundrums relating to Trudeau is that while declaring some support for the economic contribution from both mining and petroleum development, he staunchly supports two sources of many regulations which have impeded both those industrial sectors – namely support for Indigenous peoples and imposing controls to reduce environmental impacts.

Miners want to be good environmental stewards and Indigenous people to be treated fairly; however, they need clear and doable regulations that will work for everyone.

These apparent contradictions became public when the Prime Minister was interviewed at the March 2019 PDAC Convention in Toronto and delivered a mixed message.

While reiterating his support for the industry thanks to its economic and employment contributions and while promising to do everything possible to shorten regulatory approval delays and simplifying the process where possible, he re-stated – in the strongest possible terms – his continuing legislative support for Aboriginal rights and climate change controls.

Unfortunately for mining, it appears the Prime Minister might be more concerned with environmental and Indigenous matters than resource development. Economist Jack Mintz addressed this in a recent column published in the Financial Post when he commented on proposed bills C-48 and C-69, noting, “…Prime Minister Trudeau‘s government has said it wants to ‘develop our resources responsibly’. Both these measures will almost certainly make resource development more difficult if not impossible.”

Mintz also noted that there seems to be no definite program being put forward for resource development by asking, “What is Canada’s actual plan for resource development in the future?”

Mintz adds another particularly chilling (to the resource industries) comment when he notes, “…Numerous politicians have expressed their desire to stop resource development entirely…Some politicians are even going so far as considering putting an end to mining. In other words, no more responsible resource development. No resource development at all.”

One can only wonder why the Prime Minister has been mute in the face of such comments. Mintz closes his piece with this seemingly rational comment; “We need a resource policy that allows for responsible development, just like other countries are doing. That’s not the direction we appear to be headed now.”

In fact, others have said mining may have little to look forward to in terms of the outcome of the national election slated for October 21, 2019.

Most Canadian political ‘professionals’ believe the coming election will see either Trudeau’s Liberals or Andrew Scheer’s Conservatives emerge victorious – but there are striking similarities in their approaches to climate change. Trudeau’s support for regulatory impositions to support measures to control this supposed ‘menace’ are well known and Scheer joined the same crowd by noting, “Canada, yes us, is going to ‘invent’ the world out of climate doom.”

Noteworthy is the reality that both support the regulatory impositions called for in the Paris Climate Accord. These include such directives as limiting petroleum production and usage; major financial contributions from advanced economic nations to those more disadvantaged; passage of tax impositions to decrease energy and materials consumption and a host of other categories which are sufficiently intrusive to cause the US to withdraw from the Accord.

When attempting to judge the future impact of Trudeau on Canada’s mining industry, a new reality is emerging and that is the sudden drop in the Prime Minister’s popularity. Political columnist John Gurney recently noted, “Justin Trudeau’s personal popularity has utterly collapsed (due to) a series of very public and very avoidable major errors in judgement, including the entire SNC-Lavalin fiasco.”

On balance, with the elections less than two months away, a Liberal/Trudeau loss would appear to be a plus for the mining world – but only moderately so as neither party has forthrightly confirmed strong support for our industry.

This material is taken from sources believed to be reliable and is provided for information only. Any investment decision should be made only after prior consultation with investment professionals. Leonard Melman is a financial and political writer who focuses on issues relating to the resource sector.

Kinder Morgan sold, Trans Mountain resumes

By Peter Kennedy

Kinder Morgan Canada [KML-TSX] said Wednesday August 21 that it has struck a deal that will see the pipeline company being acquired by Pembina Pipeline Corp. [PPL-TSX; PBA-NYSE] in a $4.35 billion deal.

Kinder Morgan Canada’s restricted voting shares jumped 34.2% or $3.76 on volume of over 2.2 million on Wednesday. The shares have traded in a 52-week range of $10.55 and $52.50.

Kinder Morgan Canada is the company that famously sold its interest in the Trans Mountain Pipeline system and expansion program last year to the Canadian government for $4.5 billion, a move that put the project in the hands of Canadian taxpayers.

KLM shareholders voted unanimously to accept the sale on August 30, 2018, the same day that the Federal Court of Appeal quashed the approval of the $7.4 billion Trans Mountain Pipeline expansion on the basis that Canada’s efforts to meaningfully consult with indigenous people fell short.

When the ruling was announced, the court also criticized the lack of attention given to how increased tanker traffic off the cost of British Columbia would affect the resident killer whale population.

However, in February, 2019, the National Energy Board recommended that Ottawa reapprove the controversial project, which the Trudeau government agreed to do in June, 2019.

Trans Mountain said this week it has issued “notice to proceed” directives to some of its prime construction contractors, triggering mobilization of the initial workforce needed to restart construction on the pipeline project. It said work will resume at Kinder Morgan’s Burnaby, B.C., terminal as well as in communities in Alberta. Trans Mountain expects to have close to 4,200 workers on the job in various communities by the end of 2019.

The original Trans Mountain Pipeline was built in 1953 and continues to operate today. The proposed expansion is essentially a twinning of the existing 1,150-kilometre pipeline between Edmonton, Alberta and Burnaby, British Columbia.

Expected to cost approximately $7.4 billion, it will create a pipeline system with a nominal capacity rising from 300,000 barrels per day to 890,000 barrels per day.

If approvals are received as anticipated, the Trans Mountain Expansion Project is expected to be in service by mid-2022.

Under the deal announced on Wednesday, Pembina has agreed to acquire all the outstanding common equity of Kinder Morgan Canada, including the 70% majority voting interest held by Kinder Morgan Inc. [KMI-NYSE].

Upon closing, Kinder Morgan Canada shareholders will receive 0.3068 shares of Pembina for each Kinder Morgan share.

Based on the closing price of Pembina shares on August 20, 2019, the total consideration to be received by Kinder Morgan Canada common shareholders is valued at $15.12 per share, an amount that represents a 38% premium to the closing price of Kinder Morgan Canada shares on August 20, 2019.

“KML views Pembina as a leading infrastructure services provider to the North American energy industry,” said KML Board Chairman and CEO Steve Kean. “We believe KML’s assets will be a great fit with Pembina’s business and this transaction is highly beneficial to KML’s shareholders,” he said.

Kean went on to say that the transaction gives KML’s public shareholders the opportunity to participate in a larger and growing platform of North American midstream energy assets.

In addition, Pembina has agreed to purchase the U.S. portion of the Cochin Pipeline from Kinder Morgan Inc. for US$1.54 billion. The closing of the two transactions are cross-conditioned upon each other.

The Cochin mainline system represents a fully-contracted cross-border pipeline system that is highly strategic as it connects Pembina’s Channahon, Bakken and Edmonton-area assets and is connected to markets in Mont Belvieu, Conway, and Edmonton.

“Further, there is future potential to connect the eastern leg of the Cochin Pipeline System to Pembina’s assets and markets in Sarnia, Ontario,” Pembina said in a press release.

The deal also includes Vancouver Wharves, a 51-hectare bulk marine terminal facility located at the Port of Vancouver that transfers more than 4 million tonnes of bulk cargo annually.

On Wednesday, Pembina shares eased 0.41% or 20 cents to $49.07 on volume of 1.39 million. The shares trade in a 52-week range of $39.15 and $50.65.

Cameco disappointed with uranium ruling

Cameco Corp. [CCO-TSX; CCJ-NYSE] says a tribunal of international arbitrators has ruled in favour of the uranium giant in its contract dispute with Tokyo Electric Power Company Holdings Inc. (TEPCO).

The Tribunal rejected TEPCO’s assertion that it had the right to terminate its uranium supply agreement alleging force majeure, and awarded damages to Cameco of US $40.3 million. Damages were based on the Tribunal’s interpretation of losses under the supply agreement.

“We are pleased that the Tribunal agreed that TEPCO was not entitled to terminate the supply agreement, but we are disappointed with the amount of damages awarded,” said Cameco President and CEO Tim Gitzel.

Cameco filed a statement of claim for US$682 million, plus interest and legal costs.

“However, remember we had already removed this contract from our financial outlook. So overall the result is a positive for us,” Gitzel said.

Investors evidently didn’t see it that way as Cameco’s share price fell 5.88% or $0.085 to $13.61 on volume of 1.19 million. The shares are trading in a 52-week range of $12.31 and $17.12.

The dispute stems from TEPCO’s decision in January, 2017 to issue a termination notice for a $1.3 billion supply contract with Cameco by claiming “force majeure.”

Termination of the Cameco contract raised concerns about what would happen to 9.3 million pounds of uranium that was scheduled to be delivered between 2017 and 2018, an amount that equals 775,000 pounds annually.

The Japanese company said the decision was prompted by forces beyond its control and arise from the 2011 Fukushima accident that prevented the operation of its plants.

Cameco has said it saw no basis for terminating the agreement and vowed to pursue all its legal rights and remedies against TEPCO.

Cameco said the supply agreement does not allow for an appeal of the Tribunal’s decision. “The decision of the Tribunal is subject to a confidentially order which limits the information that we are able to disclose,” Cameco said.

The uranium industry has been struggling since a 2011 earthquake and tsunami in Japan disabled three reactors at the Fukushima nuclear plant, causing their cores to melt down, that resulted in Japan shutting down 50 nuclear reactors that remained intact.

The devastating repercussions in Japan sent uranium prices tumbling, and convinced some countries to decommission their nuclear reactors and switch to other fuels.

Trading at US$24.80 a pound last week, the spot price of uranium is still a long way from US$72.63, the level reached before the 2011 Fukushima disaster.

Cameco remains among the world’s largest providers of uranium fuel. Its competitive position is based on a controlling ownership of the world’s largest high-grade reserves and low-cost operations. Its head office is in Saskatoon, Saskatchewan.

Meanwhile, the Trump Administration has elected not to proceed with a recommendation by the U.S. Commerce Department to apply punitive tariffs on imported uranium and/or quotas on domestically source uranium supply.

The decision is being viewed as positive news as it removes some market uncertainty and prevents more uneconomic U3O8 supply from depressing a still fragile market.

A New Tax Warning for Business Owners

This post A New Tax Warning for Business Owners appeared first on Daily Reckoning.

I’ve been self-employed for the last decade and I’ve been doing my own taxes for as long as I’ve had income so I’ve learned an awful lot about both things over the years.

Now, after recently getting a letter from the IRS regarding my 2018 return, I have some new insights to share with you about where the two areas intersect – specifically why the advantages of a special retirement plans for business owners have just gotten a bit less attractive under the new tax laws that went into effect for 2018.

Here’s the Background…

As a self-employed person, I’ve been using a special type of retirement plan for years now and it’s already helped me keep more than $500,000 in income away from Uncle Sam’s greedy hands (at least for the foreseeable future).

It’s called a Solo 401(k) or an Individual 401(k) and I’ve universally recommended them to anyone else with self-employment income… whether from a primary business or a side hustle.

To use one, you just have to own a business and you can’t have any employees other than your spouse.

You can be a sole proprietor… a partnership… a corporation… it doesn’t matter.

Solo 401(k) plans have many of the same features as their regular brethren.

One of the biggest? You can deduct your contributions come tax time.

The difference is that you can put away a lot more money every year.

Just to illustrate the point:

Like regular 401(k) plans, your employee “elective” contributions couldn’t exceed a maximum of $18,500 for the 2018 tax year ($24,500 if 50 or older).

But in addition to that amount, Solo 401(k) plans also allow your employer — i.e. YOU — to make additional profit-sharing contributions every year – up to a maximum of $36,500 last year.

All told, that means the total limit was $55,000 for 2018 (or $60,000 for folks 50+).

To take full advantage of the sky-high maxes, you have to earn a significant amount of money in any given year. All the details on the rules and calculations via the IRS here.

However, the point is that Solo 401(k) plans offer the most generous total contribution caps available just about anywhere.

One New Wrinkle with Trump’s Tax Changes…

The amount you deduct for contributing to a solo 401(k) – or another pre-tax retirement account like a SEP or SIMPLE IRA – reduces the amount of money that benefits from the new 20% deduction for qualified business income (QBI).

That came as a surprise to me.

After all, you don’t deduct your retirement contributions on Schedule C… which is the record of your net self-employment income. They’re a separate line item on the 1040 itself (more specifically, line 28 on Schedule 1 of the new 1040).

As a corollary, any deductions you have related to self-employment health insurance also reduce the amount of pass-through income that qualifies for the deduction (line 29 of Schedule 1). 

Same goes for the deductible tax on your self-employment income (line 27 of Schedule 1).

You can get the full set of regulations here.

Here’s the Upshot…

The new 20% QBI deduction somewhat reduces the value of contributing to a tax-deferred plan like a Solo 401(k).

Does that mean you should forgo contributing? No. Everyone’s situation and goals are different.

Just as an example: I live in the high-tax state of California. My Solo 401(k) contributions reduce my taxable income at the state level even as California ignores the new QBI deduction.

I’m simply pointing out that anyone with self-employment income has a new variable to consider when they pencil out their yearly tax planning.

To a richer life,

Nilus Mattive

— Nilus Mattive
Editor, The Rich Life Roadmap

The post A New Tax Warning for Business Owners appeared first on Daily Reckoning.

Talisker Shares to Commence Trading on the OTCQB Market

Talisker Resources Ltd. [CSE:TSK | OTCQB:TSKFF] is pleased to announce that the Company’s shares have been approved to trade on the OTCQB Market, under the symbol TSKFF.  The Company’s shares will continue to trade on the Canadian Securities Exchange under the symbol TSK.

Trading the Company’s shares on the OTCQB Market provides a dealer market for Talisker shares in the United States providing easier access for investment for US-based shareholders.  The OTCQB Market provides trading for close to 900 US and international companies through its SEC-registered OTC Link® ATS, which features over 110 broker-dealers.

Quotes for Talisker’s US symbol are available directly at:

http://www.otcmarkets.com/stock/TSKFF/quote.

Terry Harbort, President & CEO of Talisker commented, ” We are pleased to have been accepted to trade on the OTCQB Venture Market which we believe will increase the Company’s exposure to US retail and institutional investors, increasing liquidity for existing and new shareholders.”

About Talisker Resources Ltd.

Talisker Resources Ltd. is a junior resource company involved in the exploration and development of projects in British Columbia, Canada. Talisker’s projects consist of several early to advanced stage projects. The Toodoggone projects located in the prolific Golden Triangle include the past producing Baker Gold/Silver Project, the Shasta Mine and Baker mill infrastructure and equipment, the Chappelle (Baker and Multinational Mines) Property, the Mets Lease and the Bot Property.  South Central B.C. projects include the Tulox Property, the WCGG Properties, and the Spences Bridge Regional Program, a 226,881 hectare land package covering 70% of the Spences Bridge Gold Belt.

For further information on this press release, please contact Terry Harbort, Chief Executive Officer of Talisker at terry.harbort@taliskerresources.com.