Canada’s DeepGreen Metals, a start-up planning to extract cobalt and other battery metals from small rocks covering the seafloor, has secured the bulk of the $150 million it needs to carry out its first feasibility studies.
The financing, provided by Switzerland-based offshore pipeline company Allseas Group, is a welcome sign of progress for the deep sea mining sector, which has been stalled due regulatory uncertainty and environmental concerns.
Unlike other seafloor mining companies, including pioneer Nautilus Minerals, the Vancouver-based explorer doesn’t want to drill, blast or dig the bottom of the ocean. DeepGreen’s main goal is to scoop up small metallic rocks located thousands of metres below the surface in the North Pacific Ocean.
Unlike other seafloor mining companies, the Canadian start-up doesn’t want to drill, blast or dig the bottom of the ocean, but to scoop up small rocks containing cobalt, nickel and other battery metals.
Its exploration focus is the Clarion-Clipperton Zone (CCZ), a mineral-rich, 4,000-kilometre swath of the Pacific that stretches from Hawaii to Mexico, where billions of potato-sized metals-rich rocks lie in a shallow layer of mud on the seafloor.
The deep sea, more than half the world’s surface, contains more cobalt, nickel, copper, manganese and rare earth metals than all land reserves combined, according to the US Geological Survey.
Companies exploring or already developing projects to mine the seafloor argue the extraction of those deep-buried riches could help diversify the sources currently supplying metals needed for electronics and evolving green technologies, such as electric vehicles (EVs) and solar panels.
Academics and scientist, however, are concerned by the lack of research on the possible impacts of high seas mining. They fear the activity could devastate fragile ecosystems that are slow to recover in the highly pressurized darkness of the deep sea, as well as having knock-on effects on the wider ocean environment.
Not enough studies
Last year, the European Parliament called for a ban on seabed mining until the environmental impacts and risks of disturbing unique deep-sea ecosystems are understood. In the resolution, it also urged the European Commission to persuade member states to stop sponsoring and subsidizing licenses to explore and exploit the seabed in international waters as well as within their own territories.
Shortly after, an international team of researchers published a set of criteria to help the International Seabed Authority (ISA), a UN body made up of 168 countries, protect biodiversity from deep-sea mining activities.
So far, it has granted 29 licences to governments and companies, authorizing them to explore in international waters.
Nautilus, however, is the only company that has gone beyond the exploration stage and has gotten close to open the first polymetallic seabed mine off the coast of Papua New Guinea. Its Solwara 1 project, however, has been slowed by funding issues and local opposition.
Anglo American (LON:AAL) sold its 4% stake in Nautilus a year ago, as part of efforts to retain only its most profitable assets. And, in March, it had to delist from the Toronto Stock Exchange.
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Goldspot Discoveries (TSXV: SPOT) announced Friday a signed service agreement with Pacton Gold (CVE: PAC) to Goldspot's A.I. and machine learning tools to evaluate and identify possible mineral and drill targets on Pacton’s Red Lake, Ontario property.
"We believe Red Lake's ground is ripe for a technological revolution" — Goldspot CEO
Goldspot has been granted a 0.5% smelter royalty on the property and the option to purchase an additional 0.5% net smelter return royalty on all metals produced from the Red Lake property for C$1 million, as well as 0.5% net smelter return royalty on all metals produced from all the current claims comprising Pacton's Australia assets in the Pilbara Craton for C$1 million.
"The Pacton Gold property in the historic Red Lake gold camp in North western Ontario excites us. It is the ideal district to use artificial intelligence and machine learning to find new discoveries," said Denis Laviolette, GoldSpot’s president and CEO in a media statement. "After initial screening and utilizing artificial intelligence to analyze various layers of data related to Pacton Gold's property, we have made our largest speculative bet to date."
"We believe Red Lake's ground is ripe for a technological revolution, and this deal gives us royalty exposure to 16,630 hectares of prospective land," said Laviolette.
Market reaction to the partnership was positive: Goldspot’s stock was up 4%, and Pacton’s stock was up on the CVE Friday afternoon.
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The world’s biggest miner, BHP (NYSE: BHP), published risk assessment results on Friday that revealed five of its tailings dams that would be at “extreme risk” of damage to local environments and harm to nearby residents if they failed, the Financial Times reported.
The Australian miner released risk assessment results in response to pressure from a group of investors that requested information on facilities controlled by nearly 700 mining companies be disclosed.
The Sydney Morning Herald reported that BHP told investors that 32 of its 67 tailing dams around the world, which hold sometimes dangerous mining by-products were 'high risk' or worse under Canadian Dam Association dam safety classifications.
The Investor Mining & Tailings Safety Initiative in April requested that over 600 resource companies, including major miners, reveal the safety records of their waste storage facilities, following the collapse of Vale’s Brumadinho dam in Brazil in January, which killed hundreds.
Following the disaster, a group of 96 institutional investors, representing more than $10.3 trillion assets under management, to 683 extractive companies seeking greater disclosure on the management of tailings storage facilities.
About 100 investors, led by the Church of England Pensions Board and Sweden’s public pension fund, requested that the companies to publish the answers to 20 questions sent, covering issues such as the height and type of dams they have, their capacity, engineering records and safety checks.
Industry group the International Council on Mining and Minerals (ICMM) said in March it was working with the United Nations Environment Programme (UNEP) and the Principles for Responsible Investment (PRI) to develop new standards.
BHP said it is establishing a dedicated tailings task force focused on internal dam management and development of international best practice.
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Shares of RNC Minerals (TSX: RNX) soared by over 22% on Thursday — taking the stock to over C$0.50 for the first time in two months — after another high-grade gold discovery yesterday at its Beta Hunt mine in Western Australia. This is the second discovery of significance at Beta Hunt in the past nine months.
Last September, RNC unearthed more than 9,200 ounces of high-grade gold from a single blast at the Beta Hunt mine in what some geologists were calling a "once-in-a-lifetime" discovery. Many of the specimens recovered — the largest of which weighed in at 94 kilograms — were among the biggest ever found in Australia.
That discovery helped to boost the mine's production by 99% to 73,801 ounces last year and brought in the funds for RNC to acquire the nearby Higginsville gold operation.
The new discovery of coarse gold this week, just 25 metres beneath the Father's Day vein (named after the day on which last year's discovery was made), amounted to 987 ounces of the precious metal recovered in 238 kilograms of rock, according to early estimates. This is equivalent to $1.9 million worth of gold at today's price.
A final estimate will be provided once this material has been processed, the company says. RNC is currently completing a 40,000-metre drill program, which will be incorporated into an NI 43-101 resource estimate and a mine plan targeted for Q2 2019.
In addition to Beta Hunt, the company is also focused on the Dumont nickel project in the Abitibi mining camp of Québec, Canada. This joint venture is expected to be one of the largest nickel sulphide operations in the world by annual production.
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Australia’s EcoMag is working on a project to recycle waste-water streams, which are known as bitterns, to extract hydrated magnesium carbonate or HMC.
At present, the focus is on the streams generated by Dampier Salt, a sea salt producer mostly owned by Rio Tinto in the Pilbara region.
Magnesium is the third most abundant element dissolved in seawater. The first two, sodium and chlorine, are removed as sodium chloride by producers like Dampier.
In an interview with MINING.com, EcoMag’s Executive Director of Communications Walter Munro explained that HMC is a high-purity, high-value magnesium product that currently fetches circa $1,250/tonne.
According to Munro, the advantage of recovering it from salty water rather than mining it is the possibility of obtaining purity levels of 99% plus, as opposed to 85-95% typically from ore.
“Also, our base product is the ideal starting point for producing oxides and esters with specific chemical and physical characteristics that are expensive -often prohibitively so- to achieve when starting from a mined ore,” he said.
Who buys this?
EcoMag is planning on selling magnesium compounds directly to large-scale industrial, agricultural, environmental and mining users, and via international distributors to smaller users.
In the mining industry, magnesium oxide is used specifically for hydrometallurgy processes as an alkali to precipitate metals from acid streams. In other words, the compound aids in higher recovery of valuable metals from ore extraction such as cobalt, nickel and copper from acid leach solutions.
In agriculture, on the other hand, Mg compounds are used in fertilisers and animal feed supplements. They are also used for human consumption products such as health supplements, pain relief and acidity regulation medication, and as a stabiliser in bread-making and other food processing.
Munro explained that there are also environmental uses such as an acid stream neutralizer and to precipitate heavy metals in wastewater treatment plants, and technology uses, as magnesium oxide is one of the additives employed to chemically strengthen the toughened, ultrathin glass used in smartphones, slates, laptops and most devices with LCD screens.
A $130-million plant
To go ahead with the plan of becoming a major supplier of magnesium compounds, EcoMag is proposing the development of a $130-million processing facility in Karratha, Western Australia. The plant is expected to initially produce 80,000 tonnes of HMC per year.
Munro said that he forecasts expansion to take place shortly after the facility becomes operative because recently completed modeling studies revealed that the volume of bitterns available for processing in the area is much larger than initially considered and could potentially support production levels eight times higher.
But before expansion plans can be considered, EcoMag needs to complete a regulatory approval process for its initial plant. The process involves providing bitterns dispersal modelling to the Western Australia Department of Water and Environmental Regulation and incorporate 45 years of data for evaporation rates, rainfall patterns, tides, and extreme weather events such as the cyclones that occasionally strike the area.
As this is ongoing, Munro and the EcoMag team are providing samples to distributors that look for magnesium compounds with minimal impurities and specific particle sizes.
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A type of fungi that looks like a thread could offer clues for finding new gold deposits.
According to scientists at Australia's national science agency CSIRO, fungi known as Fusarium oxsporum attach gold to their strands by dissolving and precipitating particles from their surroundings.
"Fungi can oxidise tiny particles of gold and precipitate it on their strands – this cycling process may contribute to [understanding] how gold and other elements are distributed around the Earth's surface," Tsing Bohu, the researcher who led the study, said in a media statement.
Bohu also said that even though fungi are well-known for playing an essential role in the cycling of aluminium, iron, manganese and calcium, gold is so chemically inactive that this recently-discovered interaction is both unusual and surprising.
The scientist and his team are undertaking further analysis and modelling to understand why the fungi are interacting with gold, and whether or not, it is an indication of a larger deposit below the surface.
Given that CSIRO has access to estimates that predict that Australia's gold production will decline in the near future unless new gold deposits are found, the institution's experts have decided to pay attention to low-impact exploration tools. They take inspiration from pioneers in the mining industry who are analyzing things such as gum leaves and termite mounds, which can store tiny traces of gold and can be linked to bigger deposits.
"We want to understand if the fungi we studied, known as Fusarium oxsporum – and their functional genes – can be used in combination with these exploration tools to help industry to target prospective areas in a way that's less impactful and more cost-effective than drilling," CSIRO chief research scientist, Ravi Anand, said in the media brief.
The researchers also think there is potential to use fungi as a bioremediation tool to recover gold from waste.
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Shares in Ecuador-focused SolGold (LON, TSX:SOLG) took a hit on Thursday, following media reports of a potential referendum on mining in Imbabura, the province in which its flagship Cascabel copper-gold project is located.
The company's stock dropped more than 28% in London to 24.26 pence in early morning, but recovered in the afternoon to close at 32p, leaving its market cap at almost 589m pounds ($743m). In Toronto, in turn, shares were last trading 10.2% down at 53 Canadian cents.
The Australian miner, which holds 72 mineral concessions in Ecuador through four subsidiaries, responded to the sharp fall of its stocks with a press release in which it stated its interests in the country were not as risk. SolGold also noted that it continued to receive “full and objective support” from the government.
In March, Girón — in the province of Azuay — voted against mining activities in a popular referendum held alongside a regional election
The copper and gold explorer said that, under Ecuadorean law, individuals are allowed to put forward petitions to the Constitutional Court for the inclusion of specific questions in a future vote. In this case, a group of locals wants to have a say on the future of mining in the northern province.
If that question is viewed as valid and legal by the body, the next phase is for the petitioning party to gain 10% of the signatures of the voting population of the provinces involved, SolGold said.
Next week, the Ecuadorian Constitutional Court will receive arguments from those who have put forward the referendum, as well as those who oppose it.
The court will then decide if the question on the future of mining is valid and legal, after which it must be approved by the electoral council to be included on ballot papers.
In March, Girón — in the province of Azuay — voted against mining activities in a popular referendum held alongside a regional election. The move casted a doubt on the future of INV Metals’ (TSX-V: INV) Loma Larga gold, silver and copper project. The Canadian miner has already announced it would relocate the proposed processing and tailings facilities outside of Girón canton.
"The Cascabel project is a key project in Ecuador's developing mining industry and a critical driver for the future of Ecuador's economy" — SolGold.
In two landmark cases last year, Ecuadorian courts sided with rural and indigenous communities who argued the national government had failed to inform them it was setting aside parts of their territories for mineral exploitation.
“The Cascabel project is a key project in Ecuador's developing mining industry and a critical driver for the future of Ecuador's economy. SolGold continues to receive full and objective support from the Ecuadorean government," the company said.
Earlier in the day, SolGold had announced that initial exploration of its Rio Amarillo project, also in Ecuador, had identified five different prospects in two concessions with significant copper and gold.
The Cascabel copper-gold project has piqued the interest of major miners, including BHP (ASX, NYSE:BHP). The world’s largest mining company last year acquired a 6.1% stake in SolGold, increasing its exposure to copper.
The move pushed Australia’s largest gold producer, Newcrest Mining (ASX: NCM), to up its holding in the company, consolidating its position as SolGold’s top shareholder.
While Ecuador has gained ground as a mining investment destination in the past two years, existing and future projects risk delays and potential halts due to growing local opposition to the extraction of the country’s resources, a report by Fitch Solutions Macro Research shows.
As mining projects face headwinds from rising tensions, investors' courage will be tested, the study concluded, which could thwart Ecuador’s plan to attract $3.7 billion in mining investments in the next two years, up from $270 million in 2018.
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