Iron Ore Of Canada Announces Labrador City Expansion

IOC Revives USD800 million Expansion Plans

Canada's biggest iron ore producer said yesterday that it will spend US$800 million to reinstate an expansion of capacity at its Labrador City mines and concentrator in the western part of the Canadian province of Labrador.

The programme was suspended in the middle of 2008 when steelmakers slashed production and iron ore fell to $40 U.S. a tonne compared to around $180 now.

The first stage of the programme – costing $435 million - will add 4 million tonnes of annual capacity to bring it to 22 million tonnes by 2012 and 26 million tonnes by 2015.

IOC will upgrade its conveyor system and add a fourth autogenous grinding mill, besides expanding the mines. It says it has about 4 billion tonnes of known reserves in Quebec-Labrador.

IOC majority shareholder Rio Tinto will invest $235 million in the revived first-stage expansion, with fellow shareholders Mitsubishi and Labrador Iron Ore Royalty Income Fund will provide the balance.

Panoro Minerals Signs Molybdenum JV

JV Signed With Peru's Centauro

Canadian mineral exploration company, Panoro Minerals Ltd has signed a joint-venture agreement with Peru’s Chancadora Centauro for the development of the Antilla Copper Molybdenum Project in Peru.

Centauro will make cash payments of US$8 million to the Panoro and will invest US$17 million into the Antilla Project in order to earn 70% interest over a 30 month period. Centauro will pay $1 million upon signing, $4 million within 90 days and the final $3 million within 20 months. The US$17 million investment will be directed towards the completion of bankable feasibility studies on the project.

Panoro will use the cash proceeds from the Antilla JV agreement to advance its 100% -owned Cotabambas copper gold project where the company recently completed agreements with two local communities. The company is planning infill, step out and exploration drilling aimed at increasing the resource.

Xtierra Raises $500,000 For Mexican Project

Feaisibility Work To Place At Bilbao Project

Toronto-based Xtierra Inc. has closed the second tranche of a private placement for additional gross proceeds of $500,000.

This portion of the placement was purchased by TayCon Capital Corporation, a capital pool company under Policy 2.4 of the TSX Venture Exchange. The shares and warrants acquired will be distributed to the approximately 300 shareholders of TayCon Capital Corporation in proportion to their shareholdings and TayCon will be dissolved.

Proceeds of this issue, together with the $3.955 million raised in the first tranche closed on 1 March 2010, will be used by Xtierra to fund further metallurgical testing and feasibility work on its Bilbao silver-zinc-copper project in Zacatecas, Mexico, and for expenses of the offering, general corporate purposes and working capital.

Jinchuan Makes Offer For Canada's Crowflight

Chinese Mining Giant In $150m Cash Bid

China’s Jinchuan Group has made a $150 million cash offer for Canadian nickel producer Crowflight Minerals.

Crowflight Minerals recently restarted production at the Bucko Lake Nickel Mine in Manitoba, and has a number of platinum group metals, nickel and copper projects in the Sudbury Basin and Thompson Nickel Belt in Ontario.

Jinchuan is become a global mining giant that controls mining, processing, refining and other metal processing and manufacturing lines. It production of nickel ranks fourth in the world; its production of cobalt ranks second in the world; and its mining and processing technology ranks third in the world.

Jinchuan has made a partly-diluted offer of 22 cents per share. By 3.30pm local time on Tuesday Crowflight Shares stood at 21.5 cents, a rise of 26.5%.

Fitch Givs Teck Resources A BBB- Rating

Teck Outlook Is Stable

The credit rating company, Fitch, has assigned a BBB- to Canadian miner and shipper, Teck Resources.

A BBB- rating is in the ‘lower medium’ rating, the 10th of Fitch’s 20 rating ranks.

Fitch says in its report that Teck’s ratings output is stable, reflecting Teck's leading positions in zinc, in the seaborne hard metallurgical coal market, and its solid core position in copper. Q4 2009 operating profits before depreciation and pricing adjustments were 39% coal, 39% copper and 22% zinc.

Adjusting the balance sheet for the sale of Teck’s one-third interest in the Wanata Dam hydroelectric facility in British Columbia, debt at Dec. 31, 2009 would be C$6.7 billion or 1.9 times 2009 operating EBITDA of C$3.4 billion. Pro forma for the transaction, Teck's cash balance would have been C$1.3 billion and scheduled debt maturities would have been C$453 million in 2010, C$432 million in 2011 and C$494 million in 2012.

Fitch expects free cash flow (operating cash flow less capital expenditures less dividends) in 2010 to be less than the C$2.7 billion generated in 2009, despite stronger earnings, on higher capital spending (C$1 billion guidance in 2010 versus C$590 million spent in 2009). Free cash generation should be at least C$ 1.1 billion in 2010 and funds from operations (FFO) adjusted leverage should decline from the actual level of 2.1 times at Dec. 31, 2009 given the focus on debt repayment coupled with stronger earnings. Teck repaid nearly C$5 billion in debt in 2009. Fitch does not expect FFO adjusted leverage to exceed 2.5x on average over the next 24 months.
Liquidity is strong with cash on hand of C$1.3 billion, internally generated cash flow and roughly C$1 billion available under credit facilities.

The report points out that Teck does have several development opportunities and therefore capital spending is expected to remain high if the outlook for commodities prices remains favorable. The company has sufficient flexibility to curtail production and delay capital spending.

Fitch points out that Teck is facing headwinds from an appeal to Red Dog's National Pollutant Discharge Elimination System Permit (the NPDES Permit). Red Dog in Alaska accounts for the bulk of zinc production and generated C$473 million in operating profit before depreciation in 2009. Until the U.S. EPA issues the notice, Teck will not know whether and to what extent access to Aqqaluk, the next deposit to be mined at Red Dog, will be affected by the appeal. The current operating plan calls for continuing to mine the Main Deposit under existing permits until mid 2011. However, in order to maintain efficient production rates, Main Deposit ore will eventually need to be supplemented with ore from Aqqaluk. If permit delays extend beyond May 2010, the transition plan will be affected and production at Red Dog would likely be curtailed in October 2010. Production would not be expected to resume until the appeal is resolved and the mine can be restarted, which could take up 18 months unless the appeal is withdrawn. Fitch does not believe a temporary curtailment of Red Dog would affect the rating.

The Stable Outlook reflects Fitch's view that Teck will continue to focus on debt reduction and resume dividends at a modest level in the second half of 2010.
A negative rating action could follow from a leveraged acquisition or other recapitalizing event. A positive rating action could follow further sustainable reduction in financial leverage.

Teck owns, or has interests in, 13 mines in Canada, the U.S., Chile and Peru, as well as one metallurgical complex in Canada.

Inmet Raises $500 For Panama Minerals Project

Toronto-listed Inmet Mining Corp. has arranged a $500-million equity for the development of its Cobre Panama copper, gold and molybdenum project.

Funding Raised Through Singapore Investment Company

The financing has been arranged through Ellington Investments Ltd, a subsidiary of Singapore-based Temasek Holdings. Temasek controls a portfolio of US$119 billion and has office in Asia and Latin America.

The placement will close at the end of April after which Ellington is to buy 9.25 million subscription receipts at $54.0049 each. The receipts can either be exchanged on a one-for-one basis for shares of Inmet, or about 14 per cent of its outstanding common stock.

Ellington has the option to nominate one member to Inmet's board of directors, as long as its or its affiliates own at least five per cent of Inmet.

Ellington has also agreed to hold its Inmet shares for at least a year, subject to certain conditions and the investing group will have the opportunity to maintain their proportional stake in Inmet if it issues more stock.

Ontario Lowlands Set For Mineral Boom

Significant Mineral Development In Ontario's Ring of Fire

The provincial government of Ontario has announced plans to develop the James Bay Lowlands in the north of the province.

More than 20 mining companies are hoping to cash in on an area believed to contain high-grade deposits of nickel, copper, zinc, gold, chromite and palladium.

The government plans to build a railway, roads and processing facilities in an area known locally as the Ring of Fire.

James Bay Lowlands is an extremely wet area on the edge of Canada’s boreal forest, some 300-400km from any existing permanent infrastructure; however investors are concentrating on a 12 km area with the Lowlands region. Currently, access to the general area is by float plane and helicopter.

Significant preparatory work, such as environmental assessments and feasibility studies will be needed before the real work can begin. Whatever infrastructure is built will depend on the nature of the mineral projects, however it is thought that winter roads on ice and snow would probably suffice for most projects, which can be adapted to seasonal production. However, there are plans for a 320km rail line which will link Nakina, north of Lake Superior, to chromite mines in the Ring Of Fire. This is because, unlike some other mineral projects in the area, chromite mining is expected to be a year-round activity.

Canada Chrome has staked mining claims along one possible route in order to secure a right-of-way. “We’re in the early process of evaluating the project,” says Nels Ojard, the firm’s group manager for special projects. Mr Ojard added that the project is probably five to seven years from becoming a reality.

Frank Smeenk, president of Canada Chrome’s parent company, KWG Resources, said it is too early to tell whether processing facilities such as smelters and concentrators will be built at the Ring of Fire or elsewhere. This depends largely on the consistency of an electricity supply.

“In the fullness of time there will probably be a (power) line along the railroad,” Mr Smeenk said. “With the economic downturn in Ontario the demand for electricity has fallen out a bit, so there’s lots of power in Ontario. The problem with it is the price is very high.”

China Coal Imports To Exceed 30 Million Tons

Coking coal imports by China, the world’s biggest steelmaker, will exceed 30 million metric tons this year as domestic supplies can’t keep pace with demand from mills; so said Teck Resources Ltd, CEO Don Lindsay at a conference in Singapore.

With Chinese steel output continuing to rise, demand for coking coal will also increase. China’s coking coal imports rose five-fold in 2009 from 6.85 million tons to 34.4 million tons after the government closed smaller coal mines in the wake of a number of high-profile mining accidents.

“China is hungry for commodities on an unprecedented scale,” said Mr Lindsay. “Domestic supply of high-quality coking coal required will not be able to keep pace with steel production growth.”

Teck Resources is the second-largest seaborne shipper of coal and wants to boost coking coal output by 50 percent within five years, Mr Lindsay said.

Western Coal Announces Contracts and Sales Forecasts

Canada’s Western Coal Corporation has has negotiated a sales price of US$200 per tonne for its hard coking coal and US$170 per tonne for its low-volatile PCI coal for 2.5 million tonnes, or 75% of its sales in Asia for the 2011 fiscal year. These prices are for the period from April to June 2010 and represent an increase of 59% compared to the fiscal 2010 hard coking coal contracts and an 89% increase compared to the fiscal 2010 low-volatile PCI coal contracts.

Western Coal also expects to sell 6 million tonnes of coal in the next fiscal year, an increase of 75% over the current year. Met coal sales are expected to hit 4.8 million tonnes - 80% of sales.

Sales from the Canadian, US and UK operations are expected to be higher than 2010 by approximately 60%, 100% and 180%, respectively.

Vale To Restart Production At Sudbury

Brazilian miner Vale is to bring in outside workers at its strike-bound Sudbury nickel and copper mining operations. Last week, 90 per cent of workers at the mine rejected the company’s offer of a new contract in a dispute that began last July.

Copper mining at Sudbury re-commence last September while the nickel smelter resumed production in January, processing nickel stockpiles using employees from other parts of the company. Nickel mining began in February using workers from an outside contractor.

In February, the company said it planned to resume nickel mining at its Coleman and Creighton mines in Sudbury using workers from an outside contractor.

Mined nickel will be smelted and shipped to the company's refinery in Wales, which will be running at full capacity by April, producing 3,600 tonnes per month of nickel.

Chinese Utility Takes 10 Per Cent Stake In Quadra Mining

Vancouver-based Quadra Mining Ltd. is to sell a 50 per cent stake in two of its copper projects in Chile to the State Grid Corporation of China. The deal also includes a private share placement in which State Grid will take a 9.9 per cent stake in Quadra


The deal is for a joint venture to develop and operate Quadra's Sierra Gorda project and Franke Mine.

Quadra will manage operations of the joint venture, while State Grid will lead on project financing, aiming for a 60:40 debt-to-equity ratio.

The parties will also work on other prospective copper assets.

HudBay Reports 54% Profit Fall

Canadian copper producer Hudbay Minerals has reported Q4 2009 profits of $7.3million, down 54% over the same period in 2008. Lower sales of copper cathode and spent anode production along with $6.9 million in executive severance costs caused the slump.

Demand for North American copper cathode from Chinese customers wasn’t as strong in Q4 as it was in Q2 and Q3, while domestic demand remained weak.

Inventory at the end of the quarter was approximately 3800 tonnes of copper.
Commenting on the results W. Warren Holmes, HudBay's executive vice chairman and interim chief executive officer said: "Our operations in Manitoba continue to perform well, including record production levels from the 777 mine in 2009, and we look forward to another year of strong production in 2010." He added "Although our fourth quarter results were affected by lower copper sales, we are already seeing a drawdown of HudBay's inventory levels and we look forward to stronger results beginning in the first quarter of 2010."

"During 2009, we executed positive steps to advance HudBay's strategic goals," said Mr. Holmes. "Most importantly, Phase 1 development of Lalor is underway and the project is moving forward on schedule. In 2009, we saw discovery of the copper-gold zone and approval of an $85 million capital expenditure program at Lalor, the decision to restart mining at Chisel North, progress on an updated feasibility study for the Fenix Project and the creation of option and joint venture agreements with several junior mining companies. These are all examples of action by HudBay in 2009, which combined with our strong cash balance, position the company well to pursue key growth initiatives in 2010."

The company also set out its strategic goals for the next two years:

Advance the Lalor Project, including additional exploration work to better define the new copper-gold zone, continuing to drive the ramp from the Chisel North mine to Lalor, completing pre-feasibility studies
to support development of a production shaft and initiating development of the shaft

Execute the restart of the Chisel North mine

Complete the closure of the Flin Flon copper smelter and White Pine copper refinery

Expand grassroots exploration program in the Flin Flon Greenstone Belt

Update the Fenix Project feasibility study, evaluate financing alternatives for the project and make a decision on restarting construction

Advance the Back Forty Project towards completion of a feasibility study and the required permit applications

Macquaries Predicts Cobalt Surplus

Macquarie Commodities Research is forecasting a medium term for cobalt, in its latest report.

Analysts at the investment bank are predicting that a 10 % increase in supply will outstrip a 9% growth in demand over the next couple of years and that the price will drop from $22.50/lb this year to $20/lb next year and $15 in 2012 thanks to expanded output from Australia, Canada and Africa.

Growth is likely to be underpinned by the automotive battery sector which accounts for about a quarter of demand; however the bank also points out that with cobalt being a secondary product from copper or nickel mines demand has remained insensitive to price.

Macquarie also points to volatility in the price of cobalt, especially as the London Metal Exchange recently launched a cobalt futures contract and contracts exchanged on the market are more likely to be sensitive to market developments.

Breakwater Shows Q4 Profit

Canadian miner Breakwater Resources posted profits of C$5.4-million in the fourth quarter of 2009. This compared to a net loss of C$53.5-million a year earlier, when it wrote down the value of its mining assets. The full-year result was a profit of C$0.8 million against a loss of C$88.3 million in 2008.

Breakwater produces zinc, copper, lead and gold from mines in Canada, Chile and Honduras.

Lower zinc prices in late 2008 and early 2009 hit profits, however CEO David Petroff said that the company curtailed its spending and has since benefited from stronger metals prices..

“By mid-2009 any concern that Breakwater would not survive had been put to rest,” he told analysts and investors on Friday.

The company ended 2009 with C$41.1-million in the bank, working capital of C$70.7-million and a portion of future earnings protected by the purchase of zinc put options, giving shareholders the benefit of higher zinc prices.

Fourth quarter concentrate production fell 6% year-on-year to 61,757 tonnes after the company suspended production at its Langlois mine in Quebec in November 2008. However, the suspension also meant that operating costs fell by C$58.8 million or 77%, while there was also a saving of C$12 million in depreciation and depletion charges.

Gross sales revenue declined 50%, to C$50.4-million for the quarter, as a result of a 63% decrease in concentrate sold and a stronger Canadian dollar, partly offset by higher realised prices.

While zinc metal stocking and destocking at various levels in the supply chain, as well as fund activity, makes supply and demand fundamentals difficult to gauge in the short term, the company remains confident that the outlook for zinc is positive in the medium and long term, Petroff said.

There are several mine closures looming around the world, and recent production problems or uncertainty at large operations in Canada and Australia are also a reminder that “mine supply cannot be taken for granted,” he added.

Anvil Sells Stake In Congo Copper-Silver Project

Canada's Anvil Mining Ltd is to sell its 90 per cent interest in the Dikulushi copper-silver mine in the Democratic Republic of Congo (DRC) to Australia's Mawson West Ltd. In return Anvil will receive a 28 percent stake in the junior miner.

The company said it is focused on larger copper projects in the DRC, in particular the copper mine project Kinsevere Stage II in Congo which is expected to yield 60,000 tonnes per year of cathode copper and is expected to begin commissioning during the first quarter of 2011. The Company plans to carry out further drilling at Kinsevere during 2010 and is investigating expansion opportunities with attractive synergies for the Kinsevere operation with the possibility of extending the processing life of the project.

The Dikulushi copper-silver mine was placed on care and maintenance in the fourth quarter of 2008 due to weaker commodity prices.

Ursa Major Reopens Shakespeare Nickel Mine

Canada’s Ursa Major Minerals Incorporated reports it has started shipping nickel ore from its restarted Sahakespeare open pit to Sudbury for processing at the Xstrata Nickel plant.

Ore shipments began in mid-February after the company's contractors began mining at the beginning of the month.

CEO Richard Sutcliffe said “We are extremely pleased with the quick and efficient start up that has been achieved at the Shakespeare Mine. Our team at Ursa Major has worked diligently to accomplish this task.”

He added “We are also very pleased to be in a position to benefit from the significant recent improvement in nickel and copper prices. In addition to the mining operations, we are planning an active exploration program in 2010 and the improved prices will further enhance these plans.”

Plans are to move 200,000 tonnes by truck to Sudbury in 2010 at a rate of about 1000 tonnes a day.

The company also announced a second private placement of financing consisting of the issuance of 6,800,000 common share purchase units at $0.10 per unit for gross proceeds of $680,000. The proceeds will go to general working capital and for certain costs associated with re-starting the Shakespeare mine.

Ursa Major has two nickel sulphide projects containing significant 43-101 compliant nickel/copper reserves and resources. The company has an option to earn a 70% interest in the past-producing Nickel Offsets mine, a 100% interest in the Shining Tree nickel deposit, and it has also acquired PGM exploration properties in the Thunder Bay area of Ontario.

Lion Energy Assigns El Sol Iron Ore Interest

Canadian miner, Lion Energy is to assign its interest in the El Sol iron ore property in northern Ontario to Northern Iron Corporation. In return Lion will receive a total of 8.5 million shares in NIC.

Lion has also agreed to accept an aggregate of 500,000 common shares in NIC as compensation for the assignment, and as consideration for agreeing to waive the requirement for either the Company or NIC to incur remaining exploration expenditures on the El Sol property up to $1,500,000.

The Shares are to be converted, on a ratio of not less than 1 to 1, into shares of a company listed on the TSX Venture Exchange. Lion will then distribute the shares to shareholders of Lion Energy.

Both parties have agreed a time frame of up to 31 January 2011 for the shares to be converted.

El Sol is located approximately 75 km northeast of Ear Falls, Ontario in the Red Lake Mining District.

Lion is also involved in oil and gas exploration projects in Kenya, Ethiopia and Somalia. It also holds several strategic investments in Potash, Sulphur Fertilizer and Uranium. The company recently formalised a deal to sell its potash assets to Encanto Potash Corp and in return Lion now owns 14.8% of Encanto.



Des Nogalski

Timminco Signs Five-Year Silicon Metal Supply Deal

Timminco Ltd has secured contracts to supply about 90,000 tonnes of silicon metal over the next five years.

Subsidiary company Becancour Silicon Ltd will supply set base quantities of silicon metal between 2010 and 2014, subject to volume adjustments by the customer. Volume commitments can also be suspended for any year after 2010 if both parties cannot settle on pricing. The contract is with a long-standing customer, though Timminco has not divulged the customer’s name.

Dundee Precious Metals Posts Q4 Profit

Canadian-based gold miner Dundee Precious Metals Inc. has announced a profit for the fourth quarter of C$3.7 million. This compares with a fourth quarter 2008 net loss of C$80.0 million.

For the year ended 31 December 2009, the Company had net earnings of C$5.0 million compared with a net loss of C$79.2 million in 2008.

Commenting on the unaudited results, President and CEO Jonathan Goldman said "A combination of strong metal prices and improved operating performance and efficiencies at Chelopech and Deno Gold contributed to solid earnings for 2009, which, when adjusted for a $6.4 million non-cash, tax-related valuation allowance, was $11.4 million. Construction of the mine/mill expansion at Chelopech is underway and on schedule for completion in the second half of 2011. In addition, underground exploration at the mine has identified two new ore zones and 1.43 million tonnes of Measured and Indicated Resource, more than offsetting the amount of ore mined during 2009."

DPM owns the Chelopech Mine, a gold/copper concentrate producer and the Krumovgrad gold project, a mining development project, both located in Bulgaria, and has a 95% stake in the Kapan Mine, a gold / copper / zinc concentrate producer in southern Armenia. In addition, DPM holds significant exploration and exploitation concessions in some of the larger gold-copper-silver mining regions in Serbia.

Barrick Sues Over El Morro Sale

The world's largest gold miner, Toronto-based Barrick Gold, has filed a lawsuit in Ontario to try to halt Goldcorp's acquisition from New Gold of most of the El Morro copper and gold project in Chile, even though the transaction has now closed.

In October Barrick agreed to buy a 70 percent stake in El Morro from its owner, Anglo-Swiss miner Xstrata, for $465 million; however New Gold – a minority stakeholder in El Morro - claimed that it had first refusal on the stake and then proceeded to sell it on to Goldcorp.

Goldcorp said on Tuesday that it had completed the transaction.

"Fundamentally, we remain of the view that Xstrata were obliged to close with us," said a spokesman for Barrick. "Whether they closed or not, the courts will sort out." No date has been set for the hearing.

El Morro holds reserves of 5.7 billion pounds of copper and 6.7 million ounces of gold.