On Thursday, an investor group led by Harry Lundin (Bromma Asset Management) and Rick Rule signed a binding agreement with the company for a $50 million debenture financing. The debentures will bear annual interest equal to the secured overnight financing rate (currently 5.3%) plus 4%, and are convertible into Lifezone’s common shares.

The nickel developer went public last July following a business combination between special purpose acquisition company – GoGreen Investments – and Lifezone Holdings Ltd. At the time, the combined entity was valued at $1 billion by the SPAC.

The New York-listed Lifezone pairs one of the world’s largest and highest-grade undeveloped nickel sulphide deposits in Kabanga with a proprietary processing technology, known as Hydromet, to produce cleaner metals in support of growing demand for batteries.

The company acquired the rights to the Kabanga project in early 2021, and in the same year, was awarded a mining licence by the Tanzanian government, a key partner on the project alongside BHP, which has committed financial backings of $100 million.

Kabanga’s previously owners include Barrick Gold and Glencore, which had spent $293 million on exploration prior to having their retention licence revoked in 2018.

Since taking over, Lifezone continued with drilling at Kabanga, leading to high-grade discoveries and a significant mineral resource update in late 2023. The deposit is now estimated to contain 881,000 tonnes of nickel metal within 43.6 million tonnes of measured and indicated resource grading 2.02% nickel. Another 391,000 tonnes (17.5 million tonnes at 2.23% nickel) are in the inferred resource category.

The company also made advancements in the metallurgical refining testwork using its Hydromet technology, which is said to have lower carbon footprint than the conventional pyrometallurgical smelting method. Test results showed nickel recoveries of over 98.5%.

Refinery licence

On the same day of the $50 million financing, Lifezone announced it has received a multi-metals processing licence from the government for its facility at Kahama, located approximately 340 km southwest of Kabanga.

The site, situated within a newly established special economic zone, stands to benefit from the legacy infrastructure of Barrick’s former Buzwagi gold mine nearby.

With the licence, the company will be able to produce finished metals in-country, potentially reducing capital and operating costs, as well as reducing costs associated with transport of concentrate or other intermediate products.

“With the receipt of our Kabanga special mining licence, and now the Kahama refinery licence, we have a clear path to delivering a direct-to-metal solution and enabling the production of nickel, copper and cobalt in Tanzania,” Lifezone CEO Chris Showalter said in a news release.

Shares of Lifezone Metals gained 3.2% to $8.19 by 10:00 a.m. Friday in New York, giving the company a market capitalization of $639.3 million.

The mining sector’s recent shift towards adopting technology to tackle rising costs is turning digital intellectual property into a valuable commodity in its own right, says global law firm White & Case.

“Technology is increasingly becoming a core component of mining and metals sector business strategies,” a partner with the firm, Daniel Turgel, told The Northern Miner in an interview Wednesday.

This trend is driven by rising operational costs and a need for the supply of minerals essential for the energy transition, according to the law firm’s March 5 report entitled Technology – The hottest commodity in the mining & metals sector.

IP is becoming crucial, transforming into a valuable asset exchanged among industry players to boost efficiency and reshape business models, Turgel explained.

A prime example is the partnership between Ivanhoe Electric (TSX: IE; NYSE AM: IE) and Saudi state-owned miner Ma’aden, leveraging Ivanhoe’s Typhoon technology to explore large areas in Saudi Arabia. Ivanhoe’s Typhoon technology, used for large-scale geological surveying, was essentially the ‘payment’ or value offered to Ma’aden for access to explore vast mineral-rich areas in Saudi Arabia.

“Technology actually becomes the currency,” Turgel said, highlighting the evolving nature of transactions in the sector and technology’s rising role in making new strategic cross-industry alliances.

“It’s becoming much more prevalent that for example, you might contribute your technology in return for an equity stake or some kind of debt instrument,” he said.

Rebecca Campbell, group head of global mining & metals, says this type of innovation is new for a generally conservative sector. “One of the fascinating things for us, as we’re starting to see a little bit of a shift.”

This trend underlines the growing importance of securing and managing IP rights amid the potential for new legal challenges. While hardware traditionally dominated the spotlight, the rise of software and AI has the potential to revolutionize mining operations. The report highlights the cost savings and efficiency gains achievable through these technologies.

Machine learning and AI have already provided considerable improvements in efficiency, accuracy, and safety mine planning and processing, White & Case associate Nick Crawford says.

“Generative AI, in particular, has opened new possibilities in exploring and processing vast amounts of geological data, significantly accelerating the project development process,” he said. “Companies like BHP and Vale are leveraging these technologies to improve safety, maintenance, and operational efficiency.”

Meanwhile, White & Case found that despite the urgent need to innovate, the sector’s spending on research and development (R&D) remains relatively low. Miners historically spend less than 3% of their EBITDA on R&D, as opposed to 8% for materials producers, 30% for industrials, and 40% for automakers and relevant original equipment manufacturers.

Nickel geology overview

Nickel deposits come in two forms: hard rock sulphide deposits, which consist of nickel-bearing minerals known as pentlandite and nickel laterite deposits.

Sulphide deposits are scattered worldwide, from northern Europe, South Africa, Canada and Western Australia.

We then have the laterites, which typically form in high-rainfall equatorial regions. As rain dissolves and removes minerals and elements from the soil it leaves behind immobile elements like nickel, iron and aluminium. That leads to a natural concentration of nickel in these regions.

There are outliers. Shifts in the global climate over geological history have enabled places like arid inland Australia to form laterite deposits. This region was once bathed in tropical rainfall and lush jungle.

But of the two sources of nickel, sulphides are far easier to process and refine into high-purity products, the ideal choice when it comes to EV battery material. For this reason, sulphide miners have retained a competitive edge.

However, that started to shift in 2018 when the world’s largest nickel producer, China’s Tsingshan Holding Group, announced a $700-million plan to produce battery-grade nickel from nickel laterites. Processing laterite ore into high-purity nickel uses a system known as High-Pressure Acid Leaching (HPAL). The innovation unlocked a swathe of new supply and Indonesia’s nickel output exploded after integrating HPAL technology in 2018.

Cloudy data in nickel outlook

In early March, the Macquarie Group’s nickel expert, Jim Lennon, claimed supply gluts could be overblown.

That assessment was based on a recent visit to China where Lennon claimed the demand for stainless steel and other nickel alloys is far higher than the official numbers report. According to Lennon, nickel inventories are also far lower than the stated figures. In other words, he believes the consensus forecast of a nickel oversupply is wrong.

It’s an interesting perspective. Chinese officials are known for under- or over-reporting figures to suit political motives.

But are Lennon’s observations, alone, enough for investors to move into this beleaguered market? Perhaps.

Resource stocks coming off a low base can result in large ‘recovery gains’ as sentiment creeps back into the market. It’s also worth noting that U.S. officials recently excluded Indonesian nickel from lucrative tax credits as part of its Inflation Reduction Act (IRA). That’s thanks to a tight interlink between Indonesian operators and Chinese investors.

So, where does that leave investors?

Everything is not what it seems in the nickel market and that’s where contrarian opportunities are born. Given that China plays a major role in supply and demand, this suggests there could be a lot more to this story. The data remains cloudy, meaning there could be more surprises in the months ahead.

A prime value opportunity may emerge with several nickel producers and explorers trading at multi-year lows.

I’ll explore that with my Diggers and Drillers readers over the coming months.

James Cooper runs the commodities investment service Diggers and Drillers. You can also follow him on X @JCooperGeo.

The London-based company, which has a 6.54% stake in South African platinum group miner Sedibelo Resources, said that plummeting prices for platinum group metals (PGMs) has affected its bottom line.

Since the beginning of 2023, prices for palladium and rhodium, used mainly in the catalytic converters that clean exhaust fumes in vehicles, have dropped by 44% and 63% respectively. This collapse is attributed to inventory reductions and a sluggish global economy. 

While the decrease in platinum has been less significant, the overall decline in PGMs has had a severe impact on producers’ profits.

Gemfields said it had reduced the value of its Sedibelo investment, which will result in a write-down ranging between $4 million and $28 million. This would translate in a loss of $0.8 US cents per share for 2023, a significant change from 4.8 US cents in earnings per share of achieved in 2022. 

Headline loss per share, which includes Sedibelo Resources’ fair value loss, is likely to be 0.9 cents compared with the prior year’s headline earnings per share of 4.8 US cents.

When it comes to its core business, Gemfields saw revenue from its 75%-owned Kagem emerald mine in Zambia drop 40% to $89.9 million in 2023, from $148.6 million the previous year. Top-line revenue at its Montepuez ruby mine in Mozambique decreased by 9.2% to $151.4 million from $166.7 million in 2022.

“Production of premium rough gemstones has been weaker at both Kagem and Montepuez Rompared to 2022, and resulted in November 2023’s planned higher quality emerald auction being withdrawn from our schedule,” chief executive Sean Gilbertson said.

“We look forward to completing our first auction of the year later on today, with a commercial-quality emerald auction taking place in Jaipur, and our next higher-quality emerald and mixed-quality ruby auctions to take place in Q2,” Gilbertson added.

Gemfields’ luxury brand Fabergé also disappointed, recording revenue of $15.7 million, which is 11% lower than the $17.6 million it had in 2022, mainly due to softer demand for precious stones.

But are customers willing to pay more for low-carbon nickel? Some analysts say yes — under certain conditions.

“If the market sees a benefit in paying a premium for certain supplies then it will,” Jim Lennon, managing director of commodities at Macquarie Group, told The Northern Miner in an interview. “A buyer would be willing to pay a premium if they can see an economic benefit in using that product, such as receiving a government subsidy or securing a sale of a ‘greener’ electric vehicle.”

The price of nickel has been on a downtrend since late 2022 when it was $33,575 per tonne ($15.23 per pound). The price on Tuesday was $17,678 per tonne ($8.02 per lb.) and in February dipped as low as $15,850 per tonne ($7.19 per pound).

The price doldrums have prompted Wyloo Metals and BHP (ASX: BHP) to suspend operations in Australia, with BHP announcing it would take a $2.5 billion impairment on its assets.

Given the devastation to its nickel sector, Australia has been the most vocal in creating new variable price brackets for low-carbon emissions nickel.

The idea for premium ESG pricing isn’t new. In fact, some experts argue that there’s already a premium.

Canada Nickel (TSX: CNC) CEO Mark Selby says people might be surprised to learn that price premia have already been paid for various North American products perceived as cleaner on Asian markets.

Selby notes that domestic premiums for certain materials have been sustained over several years, which might not be directly attributable to lower carbon footprints or ESG factors alone but could be influenced by a combination of factors, including local supply.

But this type of premium isn’t helping Australian nickel miners. And deliberately imposing an ESG premium would be a different story.

“The main challenge is defining what ‘ESG-compliant’ actually means,” Macquarie’s Lennon said.

It’s an obstacle that the London Metal Exchange (LME) is facing as it investigates and prepares for the potential emergence of premium pricing for low-carbon products on separate trading contracts.

Georgina Hallett, LME’s chief sustainability officer, says that there’s increasing interest from producers, consumers, and investors in establishing a price premium for metals produced with lower carbon footprints. However, defining what constitutes ‘low carbon’ or ‘green’ metals isn’t easy due to the lack of a standardized, universally accepted framework for measuring and verifying the environmental impact of metal production processes.

“The aim is to build a robust framework that supports the gradual introduction of sustainability-linked pricing mechanisms while ensuring broad market participation and avoiding undue disruption,” Hallett told The Northern Miner. “By taking a step-by-step approach, the LME hopes to align the interests of various stakeholders and drive meaningful progress toward the integration of sustainability into the global metals market.”

Free market forces

Lennon suggests that establishing a special low-carbon contract for metals on the LME is unnecessary. This is because the prices for different products are already determined by normal market activities, such as supply and demand. Just like prices for different metal shapes and origins adjust based on market conditions, the prices for products with various ESG qualities would naturally adjust in the same way.

“Exchanges don’t need necessarily to get involved since they can focus on ‘objective criteria for delivery (shapes, metal purity, etcetera) and leave the market to decide on ‘subjective’ factors such as value-in-use of different products/shapes and ESG,” Lennon said.

From an exchange perspective, like the LME, there is also a risk of damaging liquidity if they were to introduce multiple contracts. Compared with large commodity derivative markets, nickel is not particularly liquid and dividing this liquidity could reduce the usability of the market for some participants.

Lennon says markets will ultimately determine the outcome. Currently, nickel prices vary significantly between products depending on supply and demand.

Today’s primary nickel products that are LME deliverable include metal rounds, pellets, cut cathode, and full plate cathode. When delivered to LME warehouses, each product is assigned a associated warrant. When buyers want to take delivery from the LME, they are often willing to pay LME brokers a premium for warrants of a particular material shape or origin.

Similarly, other non-LME deliverable products, including intermediates (concentrates, mattes, MHP, MSP, etc.) or finished products (ferronickel, nickel pig iron, nickel sulphates, nickel chlorides, etc.) also sell at varying discounts or premiums to LME base prices. Lennon said these premiums/discounts can shift dramatically due to changes in supply and demand.

For example, nickel pig iron was selling at a premium to the LME price at the start of 2022 and then had fallen to a discount of 40% to the LME by the first half of last year.

“Product type, ESG, and country of origin are all important properties and presumably were factors that led major automakers to agree to term supply contracts with BHP and Vale in recent years. ESG was no doubt a factor in these negotiations,” Lennon said.

Canada Nickel’s Selby emphasized the importance of provenance tracing rather than setting up a formal two-tiered pricing system.

He points out that imposing a pricing mechanism before the market is ready can lead to inefficiencies, such as a benchmark that does not accurately reflect market conditions. He suggests letting the market sort it out.

“We will continue to observe the distinction between Western-supplied, clean, green nickel and the high-carbon, less ESG-compliant nickel from China and Indonesia,” he said. “As for the necessity of a formal pricing mechanism, it’s typically better if such mechanisms emerge naturally in the marketplace before establishing a formal platform for trading them.”

Aussie nickel rout

An increase in supply from Indonesia has cratered nickel prices, as the southeast Asian nation boosted production of refined and semi-refined nickel, mainly on the back of an export ban on raw ore, which led to massive investment from China in new processing plants, according to Lennon.

Indonesia has become the dominant nickel producer, accounting for 55% of global supply, up from 7% in 2015, according to Bank of America data. But it relies on coal-fired power.

Higher-cost Australian supply can’t compete. Australia’s federal resources minister Madeline King responded to the raft of nickel suspensions by adding nickel to the country’s critical minerals list, enabling industry access to part of the A$4 billion ($2.6 billion) federal funding earmarked for critical energy transition minerals exploration and development.

“Prices paid for Australian minerals need to recognize the high ESG standards the Australian industry adheres to and the fact that Australian workers enjoy good working conditions and the highest safety standards.”

At PDAC, she noted that Canada and Australia have agreed to jointly advocate for robust ESG credentials to be built into global, transparent and traceable critical minerals supply chains.

Laying foundations

The LME has been considering introducing a premium for green or sustainable metals since it released a 2020 white paper on the topic, Hallett noted.

In 2021, the LME collaborated with Metalshub, a digital metals procurement platform which facilitates buyers’ access to the physical metal that meets specific attributes including carbon intensity and other ESG criteria. The LME said that low-carbon nickel, classified as producing 20 tonnes of carbon dioxide or less per tonne of nickel, could already be traded on Metalshub’s system.

The platform aims to allow market participants to specify and search for metals that meet specific sustainability standards, thereby fostering the emergence of a market-driven definition of ‘green’ metals.

Hallett says the critical missing component to formalizing a new price bracket is doing the less sexy but foundational work around how one measures emissions the same way across the industry. The point is to create an equal playing field for products in the value chain included in that new contract.

The LME has initiated several measures to promote sustainability within the metals market. One of the key initiatives is the development of metal-specific measurement methodologies, in collaboration with metal industry associations, to standardize measuring carbon emissions across different metals.

However, the LME’s taking a deliberate approach to implementing a low-carbon pricing mechanism for nickel and other metals, given the still-evolving market for low-carbon metals.

“Our approach remains one of cautious optimism and pragmatic progression,” Hallett says. “We are committed to leading the industry towards a more sustainable future, understanding that real change is achieved not by rushing but by thoughtful, collective action.”

Spot gold set a new record of $2,222.39 during the early hours of trading, before retreating to $2,206.10 by 9:05 a.m. EDT for a 1.0% gain. US gold futures soared 2.4% to $2,208.20.

[Click here for an interactive chart of gold prices]

Gold’s latest rally, which started mid-February, is underpinned by longstanding tailwinds including heightened geopolitical risks and increased central bank buying. This month alone, the safe-haven metal hit new highs on five occasions.

Its rapid ascent, according to Bloomberg columnists, has surprised many seasoned market observers, as there hasn’t been a clear catalyst. What has been partially driving bullion are expectations for looser monetary policy in the US, and that has now been reaffirmed by the Fed.

On Wednesday, Fed chair Jerome Powell continued to highlight officials would like to see more evidence that prices are coming down, but “it’s still likely in most people’s view that we will achieve that confidence and there will be rate cuts,” he said.

“What we saw last night was the green light really for gold traders to come back in,” said Chris Weston, head of research for Pepperstone Group.

“The Fed have said that right now they’re tolerant of the inflation that we’ve seen, they’re tolerant that the labor market strength is not going to be the impediment,” Weston told Bloomberg.

Speculation around the timing of the Fed’s long-anticipated pivot may have provided the trigger for recent gains, with data showing that traders boosted their net long positions on gold in the week through March 5 by the most since 2019.

The metal stands to benefit even more when US interest rates actually do come down, as bullion-backed exchange traded funds look likely to increase their holdings, according to UBS Group.

On the geopolitical front, there are a number of risks boosting gold’s allure as a haven asset: Russia appears to be gaining the upper hand in its war in Ukraine, the Israel-Hamas conflict continues unabated and has led to a re-routing of global shipping, while the US presidential election at later this year could prove massively consequential for markets.

Chinese buying has also underpinned prices. As well as the central bank, people have been stocking up on coins, gold bars and jewelry to safeguard their wealth from a years long property downturn and losses in the country’s stock market.

(With files from Bloomberg)

The new per-share offer price of A$0.575 represents a 4.5% increase over its previous bid of A$0.55, which was turned down by OreCorp earlier in the year. However, the Perth, Australia-based gold miner has maintained its confidence in completing a deal, and earlier this month, it extended its previous offer to April 19.

Perseus currently holds 22.01% of OreCorp’s share capital, having increased its stake by another 2.11% immediately prior to the new offer. It is now the largest shareholder of OreCorp, just ahead of Silvercorp (21.11%).

In a news release confirming Perseus’ latest offer, OreCorp said it has notified Silvercorp of what is determined to be a “superior proposal” in accordance with the matching rights process set out in the bid implementation deed signed between the companies in December 2023.

Silvercorp, which initiated its takeover proposal in August 2023, now has a five business days to make a better offer.

Should Silvercorp fail to provide such an offer within the five-day period, the OreCorp board intends on recommending that shareholders accept the amended proposal in the absence of a superior proposal, the Australian gold developer said.

OreCorp also said it had received statements of intent from major shareholders, who in aggregate hold approximately 15.6% of its shares, indicating that they intended to accept the new proposal from Perseus.

At the heart of this takeover battle is the Nyanzaga project in Tanzania, located near Barrick Gold’s (TSX: ABX; NYSE: GOLD) Bulyanhulu mine and AngloGold Ashanti’s (JSE: ANG) (NYSE:AU) Geita mine.

A 2022 definitive feasibility study gave the project an after-tax net present value of $618 million at a 5% discount rate and an internal rate of return of 25%.

Geographically, Perseus is the closer suitor with three operating mines in West Africa producing gold at a rate of more than 535,000 ounces per year.

Silvercorp has two producing mines in China but has been looking to diversify its portfolio.

The discovery in the emerging Sore area returned significant intercepts such as 26.45 grams gold per tonne over 2.5 metres, including a higher-grade segment of 108.5 grams gold per tonne over 0.5 metre, including 1.05 grams gold over 40.7 metres and 1.33 grams over 17.9 metres. This area has not seen any previous diamond drilling within 1 km, the company said in a release.

“A new discovery, greenfield and on a blind target, further highlights the prospectivity of the Aurion-B2Gold 290 sq. km JV property and the quality of B2Gold’s exploration team,” Aurion CEO Matti Talikka said.

Company shares reached an intra-day high of C$0.62 apiece before settling at C$0.59. Aurion has a market capitalization of C$79.5 million.

Results are pending for about 4,000 metres of diamond drilling completed this year.

However, the drilling program was halted after Rupert Resources (TSX: RUP) entered discussions on March 11 to buy B2Gold‘s 70% interest in the JV. Aurion says it is considering its options regarding its right of first refusal. It will have until May 9 to decide whether to exercise the right, granted under a 2019 shareholders agreement between the partners.

The discovery is located 1.7 km northwest of the Kettukuusikko prospect and 38 km northwest of the Helmi discovery.

Rupert is also focused on the Central Lapland belt. Its Rupert Lapland project contains the multi-million-ounce Ikkari discovery, located 50 km southeast of Agnico Eagle Mines’ (TSX: AEM; NYSE: AEM) Kittila gold mine and the Pahtavaara mine and mill.

The JV between and B2Gold covers about 290 sq. km along the Sirkka Shear Zone, which is a significant structural feature in the region known for hosting various gold occurrences. The area has yielded numerous discoveries, showcasing the high prospectivity and potential for further discoveries within the belt.

By Tuesday afternoon, stock in the Toronto-based company had fallen 29% since Friday to C$2.21 apiece, valuing Global Atomic at C$462.7 million. It was as low as C$2.03 on Tuesday and has traded in a 52-week range of C$1.28 to C$3.91.

Global Atomic plans to start Dasa’s $424.6 million construction after June and commission the mine by the end of next year, according an updated feasibility study this month. The military coup in July led the US to suspend government funding for Dasa, but the company raised C$15 million in January by selling stock and says it will pursue more financing in a 60% borrowing, 40% equity-raising model.

“With the situation in Niger being fluid, in addition to current advanced discussions with project lenders, the company is also pursuing other financing strategies to meet its project funding requirements,” president and CEO Stephen G. Roman said in a release on Monday. “Given strong third-party interest in Global Atomic’s high-grade uranium project and our plans for near-term production, there are many groups interested in funding the Dasa project.”

The spot price of uranium oxide, also called yellowcake, was $91 per lb. on Tuesday, down from $107 per lb. last month, but still at its highest level since 2007. The metal is at nearly double its year-ago price on rising demand for electricity production without the air pollution of fossil fuels, and a forecast supply deficit. China alone plans to build about 150 reactors over the next decade.

Shares in other uranium producers, such as Canada’s Cameco (TSX: CCO; NYSE: CCJ) and Kazakhstan’s Kazatomprom (LSE: KAP), the world’s largest, gained 2% on the Niger developments, but declined on Tuesday to near Friday’s close.

US bases

American troops have been in Niger to fight regional Islamic insurgents since a 2012 agreement. The West African country supplies about 5% of global uranium demand making it the seventh-largest producer, including about 20% of the European Union’s needs. Numerous junior and large companies are exploring in Niger. French-state owned Orano said last month it was restarting production that was suspended after the coup.

David Talbot, a uranium market expert and managing director of Toronto-based Red Cloud Securities, said that despite the uncertainty in Niger, the country has been a steady uranium producer for more than 50 years and the government has respected operations by foreign companies.

“Even with the recent removal of French troops from the country, Niger has respected Orano’s business and we would expect it to do the same with Global Atomic and others,” Talbot said in a note on Tuesday. “For now, the key catalyst for Global Atomic remains the closing of its project debt financing.”

The main shareholders in Global Atomic are Toronto-based Sprott Asset Management with nearly 8% through exchange-traded funds, and New York’s Global X ETFs and investment firm VanEck. The January stock fundraising included $5 million from Bermuda-based Regent Mercantile Holdings led by Stephen Dattels, who also has an interest in Pasofino Gold (TSXV: VEIN) and its Dugbe gold project in Liberia.

Global Atomic raised Dasa’s probable reserve by 50% to 73 million lb. uranium oxide in 8 million tonnes grading 4,113 parts per million uranium oxide, according to the new feasibility study. The company has signed offtake agreements for 1.3 million lb. of uranium a year from a plant expected to produce about 3 million lb. annually over a proposed 23-year mine life.

Sahel region

Western nations such as France, which has long stationed troops in its former colonies, have been trying to help countries in West Africa’s Sahel region south of the Sahara Desert stem the growth of Islamic insurgents over the past few decades. The US began its Africa Command in 2007. But recent coups, including in neighbouring Mali and Burkina Faso, have hardened the resolve of some countries to lessen ties with the West and turn to Russia and its mercenary outfit Wagner Group for support.

In an alarming development for the US, Niger is considering a yellowcake supply deal with Iran, The Wall St. Journal reported on Sunday. The West has been trying to block Iran’s access for decades to nuclear material that could help it build an A-bomb.

The pivot prompted a US delegation including Assistant Secretary of State for Africa Molly Phee to visit Niger last week and press the regime under General Abdourahamane Tiani to organize elections, address security concerns and kill the Iran deal. But the Americans didn’t meet with Tiani. He issued a statement criticizing the condescending attitude of the visitors for not following protocol, denied there was a deal with Iran and cancelled the security arrangement with the US.

The US operates two bases there including one for drones built in 2021 for an estimated $100 million, according to Reuters. It remains unclear if all the 1,300 US soldiers in the country will have to leave.

Nuclear fuel

Besides countering Islamic insurgents, the West also wants to increase its uranium fuel processing. The US, Canada, Britain, France and Japan committed a total of $4.2 billion in December to build new plants since Russia’s Rosatom controls more than half the world’s capacity. Some Western nations are considering whether to sanction Rosatom and yellowcake exports to Russia.

For uranium investors, the price crash in battery metals nickel, lithium and cobalt may be a cautionary tale about the energy transition’s demand at this stage. Nuclear power has held out promise for decades but safety concerns, accidents and construction cost overruns have limited its appeal. The cure for high metal prices is high metal prices, The Economist noted last month.

But the Toronto-based Sprott Physical Uranium Trust (TSX: U.U for USD; U.UN for CAD), the largest investment fund in the physical metal, with $5.5 billion under management, remains boosterish while noting constraints in Niger.

“The situation in Niger is still developing, and Orano continues to face logistical challenges with both accessing the required reagents and exporting uranium,” Sprott exchange-traded fund project manager Jacob White said in blog-post on Monday. “Uranium’s recent pullback from the triple digits may be an attractive entry point in the overall uranium bull market.”

The company said the volume of diamonds with a viable chance of economic extraction at Lulo increased to 228,000 carats as of December 31, up from 153,870 carats the previous year. The newly identified resources, it said, could add an extra eight years to the deposit’s production.

Lucapa noted the updated figures are the result of an independent asset evaluation conducted by South Africa’s Z Star Mineral Resource Consultants.

The study assessed the resources at $1,897 per carat, a 5% decrease from $2,000 in December 2022, which partly reflects the decline of diamond prices last year. Diamond grades also decreased, but slightly — to 4.55 carats per 10 cubic meters. 

Lucapa recovered 181,900 precious stones in 2023, a 45% increase from the previous year, with an average rough size of 1.26 carats per stone compared to 1.23 carats in 2022.

This increase represents the sixth consecutive year of resources growth at Lulo, the company said. Total production from Lulo to date has reached 200,000 carats, generating $426 million at an average price of $2,122 per carat.

The Lulo mine, in operations since 2015,  is considered the world’s highest dollar-per-carat alluvial diamonds operation.

Lucapa has a 40% interest and the rest is held by Angola’s national diamond company (Endiama) and Rosas & Petalas, a private entity.

Angola is the world’s fifth diamond producer by value and sixth by volume. Its industry, which began a century ago under Portuguese colonial rule, is successfully lessening government regulations and restrictions in favour of a greater participation by private entities.

Lucapa’s shares closed at A$0.12 on Monday in Sydney, leaving the diamond miner with a market capitalization of A$33.25 million (about $22 million).

Graphjet’s warrants will also be delisted from the Nasdaq and begin trading on the OTC as GTIWW. The transaction, the company says, creates the only pure-play publicly traded direct biomass-to-graphite company, establishing Graphjet as the leading source of graphite and graphene for the US market.

Graphjet raised $5.8 million through the transaction, and it anticipates that additional fundraising will be necessary to accelerate its growth strategy and expand its manufacturing capacity.

Graphjet’s technology uses eco-sensitive methods in a circular solution using waste and its processes eliminate emissions and pollutions, it said. The company has a $30 million offtake agreement with Toyoda Gosei and has accelerated the timeline for its planned manufacturing plant in Malaysia.

“We are thrilled to list Graphjet on the Nasdaq, particularly at this crucial moment of critical material demand and limited availability for the US market,” CEO Aiden Lee said in a press release.

“With China dominating more than 97% of all graphite production, we look forward to becoming the leading supplier to the US market to support its burgeoning battery storage and EV industries,” Lee said.

“Our patented technologies are capable of producing graphite and graphene directly from agricultural waste, which fills a critical supply need for these highly strategic materials, as demand is expected to continue to accelerate over the next several years.”

Graphjet said its commercial and patented vertically integrated technologies and process cuts the carbon footprint by 83% while reducing costs by 80%.

Graphjet’s stock advanced on the Nasdaq on Friday during a generally down day in the US market, affording the company a $1.76 billion market capitalization.

Tumbling metal prices account for more than half all of impairment charges, declared when fixed assets fall below market values, the study of 105 TSX-listed mining companies found. They incurred $68 billion in charges from 2002 to 2015. Using unfamiliar technology and locating in developing countries also contributed, data show.

Metal price drops accounted for 143 of 268 cases and $25.2 billion in impairment charges, according to the study published last month in Resources Policy, an international journal on mineral rules and economics with editors in the United States, Australia and China. The research appears appropriate at a time when nickel and lithium prices have crashed from 2022 highs as gold has set new records.

“While impairments have been shown to be a common occurrence across mining companies, they also are a major contributor to the industry’s low average returns,” said the authors led by Andrew Gillis of Edmonton-based Aurora Hydrogen.

“The degree of impairments is higher at mines in developing countries and at mines where the geographic location and mining processes are new to the company operating the mine,” said the authors, which included John Steen and W. Scott Dunbar of the Department of Mining Engineering at the University of British Columbia in Vancouver, and Andrew von Nordenflycht of the Beedie School of Business at Simon Fraser University in Burnaby, BC.

Get lucky

Forecasting by its nature is uncertain. But some firms get lucky and only face a few impairments, while others get unlucky and suffer many or large impairments, the authors said. Their targeted years of research coincided with the rise of the commodity super-cycle 20 years ago followed by the financial crisis and declining metals prices from 2012.

The group recommended mining companies should improve their forecasting of mineral reserves, capital costs, production costs and commodity prices, which all impact future cash flows. It noted how C-suites might blame falling metal prices for impairments because other slips in capital or operating costs could be directly attributed to their own forecasting. The flip side is that rising metal prices can hide some other forecasting errors. And forecasting in foreign lands is simply more difficult, the authors said.

“Higher impairments in developing countries stem from lower information availability about market conditions and/or more volatile local market prices and conditions,” the authors said. “The sources of uncertainty are just greater, making forecasts harder and forecast errors easier, even for experienced forecasters.”

In the end, the researchers recommended more studies on forecasting. They could try to pinpoint the root causes of forecasting errors through personal interviews with project participants, detailed comparisons of feasibility studies and actual outcomes as well as assessing their methods of error prevention.

“Asset impairments have been identified as a primary determinant of long-term shareholder returns across Canadian mining firms,” the authors said. “Our findings suggest looking more closely into price forecasting procedures at mining companies to see if certain techniques or circumstances lead to more or fewer price-driven impairments.”

“We are excited to partner with Kinross on our PWC project. Their global proven track record speaks for itself as well as specific regional expertise that includes ownership and operations of two gold mines in Nevada (Round Mountain and Bald Mountain),” Riley Gold CEO Todd Hilditch said in a news release.

Under a venture option agreement signed Thursday, Kinross will assume operatorship of the PWC project and can earn an initial 60% interest in PWC by incurring a minimum of $10 million in qualifying work expenditures.

The Canadian gold major can earn an additional 15% interest (for a total 75% interest) by incurring at least another $10 million in qualifying work expenditures within two years of exercising the initial earn-in option.

Upon exercise of the initial earn-in option, a Nevada-registered joint venture company will be established for Kinross and Riley to hold their respective interests in PWC. Upon exercise or termination of the second earn-in option, the parties will fund ongoing operations of the JV based on their proportionate interests.

There is a dilution provision stating that should Riley’s interest in the JV company be reduced to 10% or less, the company’s interest will then be converted to a 2% net smelter return royalty.

In addition to the earn-in, Kinross will also take a 9.9% equity interest (on a partially diluted basis) in Riley through a private placement. In total, the placement consists of 8 million units priced at C$0.15 each for total proceeds of C$1.2 million.

Shares of Riley Gold surged 30% to C$0.20 on the TSX Venture Exchange by 11:20 a.m. ET, within the upper range of its 52-week range of C$0.09-C$0.24. The gold junior has a market capitalization of C$6.3 million.

PWC project

Located in Lander county, Nevada, PWC consists of approximately 24.7 km² in the heart of the gold-producing Cortez District, also known as the Battle Mountain-Eureka trend. The property adjoins Nevada Gold Mines complex, a joint venture between Barrick Gold and Newmont.

Drilling on the PWC project was first conducted in 1992, but since 1994, other operators such as Agnico-Eagle and Barrick Gold (Placer Dome) generally focused on offsetting early drilling that intersected gold mineralization in the lower plate of the Roberts Mountain thrust. 

Results from the historical drilling include 4.6 metres grading 2.594 grams gold per tonne at 324 metres, including a high value of 3.84 g/t gold at 283 metres.

The Responsible Use of Seafloor Resources Act calls for federal resources to be allocated towards refining polymetallic nodule materials and advises several analyses across benefit sharing, technology development, trade, and environmental and human health.

The Act calls for the government to coordinate and expedite the development of infrastructure to process and refine seafloor nodules within the United States.

It also asks the Office of Science and Technology Policy to annually submit to the President and Congress a report including quantitative and qualitative analysis of the benefits to the US of importing seafloor nodules and processing and refining nodules domestically.

“The strength of US national security and energy independence will be determined by how we choose to respond amid increasing reliance on China. This legislation is common sense and encourages the needed strategic decoupling from China that is long overdue,” said Congresswoman Miller.

China controls roughly 60% of the global critical mineral production and over 85% of the world’s refining capacity.

“Over the last two decades, the Chinese Communist Party has strategically invested in putting a stranglehold on global critical mineral supply chains. It’s vital to our security and economic interests that the CCP controlled monopoly on these materials is broken,” said Congressman Joyce.

Following the introduction of the Bill, shares of the deep-sea mining pioneer rose as much as 15%. The Metals Company has a $588 million market capitalization.

“With commercial deep-sea nodule operations expected to begin soon, Congressional action to lay the foundation for processing and refining this remarkable resource is a game-changer,” CEO Gerard Barron said in a news release.

Minerals and metals such as cobalt, nickel, copper, and manganese can be found in potato-sized nodules on the ocean floor. Reserves are estimated to be worth anywhere from $8 trillion to more than $16 trillion, and they are in areas where companies, including The Metals Company, plan to target.

Many NGOs and environmental groups, however, argue that mining the seafloor could have a devastating impact on the planet.

A recent report by the non-profit Planet Tracker says mining the seafloor for key minerals and metals could negatively impact the mining industry, resulting in $500 billion of lost value and causing damages to the world’s biodiversity estimated to be up to 25 times greater than land-based mining.

Benchmark three-month copper on the London Metal Exchange (LME) touched $8,799 a metric ton, the highest since Aug. 1, 2023. It last traded 1.6% up at $8,790 as at 1055 GMT.

Copper for delivery in May rose on the Comex market in New York, touching $4.06 per pound ($8,932 per tonne), up 3.3% compared to Tuesday’s closing.

[Click here for an interactive chart of copper prices]

The rise started on the Shanghai Futures Exchange (SHFE), where copper reached a two-year high of 70,460 yuan ($9,796) per ton.

China’s biggest copper smelters met in Beijing on Wednesday, agreeing on a symbolic cut in loss-making production, without specifying volumes and timing.

“It’s a knee-jerk response to rush in. Interest spiked on SHFE right after the announcement of China’s production cut,” a trader said. “Who will admit they are the first to turn unprofitable?”

Shortages have led to intensifying competition for mined copper concentrates, causing a sharp fall in income for smelters to decade-low levels.

“But it’s important to note that there are around 1.7 million tons per year new ex-China smelter projects that are expected to come online in the second half, which will put more pressure on global concentrate supply,” said Brian Peng, a copper analyst of consultancy CRU.

More global copper smelters were not operating in the first two months of the year than in the same period last year, mainly because of Chinese inactivity, data from satellite surveillance of metal processing plants showed.

However, higher copper prices could further dampen demand in top consumer China, as can be seen in inventories.

Copper inventory in warehouses monitored by SHFE rose steeply to 239,245 tonnes as at March 8 from 30,905 tonnes in the beginning of the year.

Clarity on demand prospects could be provided by China’s loan data due this week, including total social financing numbers, a gauge of future metals consumption.

(With files from Reuters)

The Penco module covers a 6 sq. km. area hosting an ionic clay deposit rich in heavy rare earths, with measured and indicated resources totalling 27.5 million tonnes grading 2,292 parts per million total rare earth oxides (TREO), for 62,900 tonnes of contained TREO.

Under the investment agreement, CAP will make a strategic investment in REE Uno, Aclara’s Chilean subsidiary which owns the Penco module as well as all its mining concessions in the country, in exchange for a 20% equity participation in the REE unit.

This initial capital, according to Aclara’s calculations, gives REE Uno a pre-money valuation of $116.5 million. It will be paid in three tranches: $9.7 million upon closing, $12.5 million in January 2024 and the remaining $6.9 million in January 2026.

The initial capital injection from CAP will support the ongoing development of the Penco module throughout its permitting, community relations and feasibility study phases. It will also allow the company to reallocate its current cash reserves towards advancing its other project: the Carina module in Brazil.

Drawing upon CAP’s experience in environmental permitting from multiple mining projects in Chile, Aclara anticipates strengthened support for the forthcoming Penco environmental impact assessment (EIA) permit application.

CAP’s involvement includes a thorough review and constructive contributions to the application preparation, as well as accompanying Aclara throughout the review and approval process by Chilean environmental agencies, the TSX-listed miner said.

CAP also has an option to invest an additional $50 million in REE Uno for an additional 20% equity interest once the requisite environmental permit is secured for the Penco module. This second investment represents a pre-money valuation of REE Uno of $150 million.

The option for additional investment post-receipt of the environmental permit is intended to cover a significant part of the equity portion associated with the construction of the Penco module. This provision mitigates financing risks linked to the module’s construction, Aclara said.

The Chilean group can also invest up to 19.9% in Aclara itself by participating in any private placement or public offerings that Aclara may make over the next threes years. This includes a residual top-up right to maintain its pro rata voting right in the REE miner.

The companies will also form of a 50/50 joint venture to develop metals and alloys for the rare earths permanent magnet industry. CAP will invest $3 million in exchange for its 50% of the shares of the newly established joint venture company.

The establishment of a metals and alloys company represents the initial phase of Aclara’s strategic vision to vertically integrate its rare earths concentrate production towards the manufacturing of permanent magnets.

This move aims to offer a geopolitically independent alternative supply of permanent magnets to the market, Aclara said, adding that the new company will harness CAP’s expertise in metal refining and ferro-alloyed special steels, synergizing with its thorough understanding of the rare earths and permanent magnet industry.

The transaction reflects the valuation of Aclara at the time of the company’s initial public offering in late 2021 after it spun off from Hochschild Mining, and is indicative of the belief both parties have in establishing Aclara as a leading producer of clean rare earths.

The pre-money valuation of the initial investment plus the 50% interest in the new JV company represent a total value of $119.5 million, which reflects Aclara’s pre-money valuation at the IPO.

“We are thrilled to partner with CAP to develop our Penco module and strategy in Chile, as well as joining efforts to start developing Aclara’s capabilities in the vertical integration of the rare earths and permanent magnets industry,” Aclara chairman Eduardo Hochschild said in a news release.

“This alliance with Aclara represents a historic milestone for Grupo CAP, marking the first step in our strategy to become leaders in the production of essential materials for decarbonization and energy transition,” Juan Enrique Rassmuss, chairman of CAP, added.

Shares of Aclara Resources surged 30.1% to C$0.51 as of 11:30 a.m. ET, for a market capitalization of C$83.8 million ($62.2 million). The stock traded between C$0.36 and C$0.60 over the past 52 weeks.

The planned listing, although the exact exchange wasn’t named, would start in this year’s third quarter to join more than 40% of the world’s public mining companies on the Canadian stock market, Southern Cross said on Tuesday. The company holds the Sunday Creek project and the Redcastle and Whroo joint ventures in Victoria and the Mt. Isa project in Queensland.

“A dual listing in both Australia and Canada will provide direct exposure to a diverse class of global investors,” managing director Michael Hudson said in a release. “It includes those North American investors who have over the last seven years directly benefited from the huge capital growth that has come from the Victorian goldfields.”

With about 70% of Southern Cross’ shareholders located outside of Australia, the company is betting the dual listing will more efficiently allow Australian and North American investors in on the company’s growth and high-grade gold story. The Sunday Creek project posted hole SDDSC107 which cut 0.7 metre at 3,511 grams gold per tonne from 684.3 metres depth. The hole’s first 30 cm graded 7,330 grams gold.

Southern Cross closed 20% higher on Tuesday in Sydney at A$2.05 apiece, valuing the company at A$184.1 million. Sweden-focused Mawson Gold (TSXV: MAW), which owns 51% of Southern Cross, gained 12% to close at C$0.65 in Toronto for a market capitalization of C$197.5 million.

Mawson Gold

Mawson Gold says it intends to distribute its shares in Southern Cross to Mawson shareholders this year. Mawson holds the Skellefteå North gold discovery and a portfolio of historical uranium resources in Sweden.

The Sunday Creek project, about 60 km north of Melbourne, lies within 194 sq. km of exploration tenements. It used four rigs to drill 19,000 metres on the Apollo, Rising Sun, Golden Dyke and Christina targets from September. Ten holes are being processed or in progress, the company said. The host rocks are intensely-altered in a steeply dipping zone where gold and antimony form in a relay of vein sets.

“When observed from above, the host resembles the side rails of a ladder where the sub-vertical mineralised vein sets are the rungs that extend from surface to depth,” the company said. “At Apollo and Rising Sun these individual ‘rungs’ have been defined over 600 metres depth extent from surface to 1,000 metres below surface, are 2 metres to 30 metres wide, and are 20 metres to 100 metres in strike.”

The company’s drill program has discovered 45 ‘rungs’ defined by high-grade intercepts to more than 7,000 grams gold. Step-out drilling is aiming to uncover the potential extent of this mineralized system.

The project is in the Melbourne structural zone in the Lachlan fold belt where the Sunday Creek mineralization is an interbedded turbidite sequence of siltstones and minor sandstones, the company said. They metamorphosed to sub-greenschist facies and folded into a set of open north-west trending folds.

Glencore last year said it planned to develop a recycling hub in Europe with Li-Cycle to produce materials including lithium carbonate in response to a global shortage of key raw materials for the fast-growing electric vehicle (EV) market.

This not the first investment Glencore made in Li-Cycle. In June 2022, it invested $200 million in the Canadian-based battery recycling firm. Li-Cycle’s CEO Ajay Kochhar said at the time that the agreement would “further secure and diversify” the company’s lithium-ion battery supply and feedstock sources and help improve its position in North America and Europe.

The demand for lithium-ion batteries used in EVs has been on the rise as the world looks to meet its goal of transitioning away from fossil fuels by 2050. The recycling of lithium-ion batteries, however, is not expected to take off before 2030 due to obstacles such as the lack of recyclable feedstock and the long life of EVs, according to Wood Mackenzie.

“This financing enhances Li-Cycle and Glencore’s existing long-term, strategic partnership and represents an interim step in our funding strategy to support Li-Cycle’s future plans,” Kochhar said in a news release. “We also continue to work closely with the US Department of Energy on the conditional commitment for a loan of up to $375 million.”

Li-Cycle said it is continuing to review its global recycling network and its go-forward strategy for the paused Rochester Hub in the US, including analyzing potential end-product mix options and construction strategy.

“Glencore is committed to bringing scalable and sustainable circularity into the supply chain of battery materials,” Kunal Sinha, Glencore’s global head of recycling and non-executive director of Li-Cycle’s board, said in the statement.

“Our original investment in Li-Cycle, alongside key commercial agreements, formed part of this strategy. Today, we are pleased to further support Li-Cycle through this additional $75 million investment so both Li-Cycle and Glencore can continue to build the battery circularity platform of choice for our customers.”

Li-Cycle’s stock surged over 38% in Tuesday’s afternoon trading in New York. By 2 p.m. EDT, the shares had traded at a volume of 51.6 million, compared to an average daily volume of 3.3 million. The company has a $97.8 million market capitalization.

On the London Metal Exchange (LME), three-month aluminum touched $2,270 per metric ton, marking its highest level since February 1st.

According to Tom Price, head of commodities strategy at Liberum, there are concerns about demand stemming from increasing inventory levels in China. However, he suggests that this may be attributed to a seasonal trend in anticipation of heightened consumption in the second quarter of this year.

Inventory data reveals that aluminum stocks have surged by 85% this year to 184,358 metric tons in warehouses monitored by the Shanghai Futures Exchange. Meanwhile, stocks in LME’s registered warehouses have seen a 2% increase since the start of 2024, climbing to 577,675 tons.

China’s record aluminum production in 2023 has tempered the upside potential for prices of the metal, primarily used in auto parts and power cables manufacturing.

The ongoing property crisis in China has cast a shadow on the demand for industrial metals. Moody’s recent downgrade of China’s second-largest property developer, Vanke, to a “junk” rating further underscores the severity of the situation.

Tom Price suggests that demand for base metals linked to China’s distressed property sector is more likely to gradually decline over the next two to three years, rather than experiencing a sudden collapse.

(With files from Reuters)

Read More: Alcoa to buy Australian partner Alumina in $2.2bn all-stock deal

The offer was made by Rupert Resources (TSX: RUP), which is also exploring the Central Lapland belt. Its primary focus is the 100%-owned Rupert Lapland project, which contains the the multi-million-ounce Ikkari discovery, located 50 km southeast of Agnico’s Kittila gold mine, and the Pahtavaara mine and mill.

The offer states that Rupert will issue approximately 28.6 million shares to B2Gold, for an implied total value of C$102.8 million ($76 million) based upon the market price of its shares as of March 8, 2024.

The stock was down 1.1% to C$3.55 by 11:30 a.m. ET on Monday, for a market capitalization of C$723.8 million ($536 million).

In a separate release Monday, the Toronto-based Rupert confirmed that preliminary discussions are underway with B2Gold to acquire its 70% interest in the JV company.

The acquisition would bolster Rupert’s portfolio, adding several exploration targets covering 293 sq. km. of the Sirkka shear zone. This includes the Helmi discovery located 1.5 km west of Ikkari and the Kutuvuoma prospect discovered in 1990 by state-backed miner Outokumpu.

Under a 2019 shareholders agreement between the JV partners, Aurion holds a right of first refusal with respect to the proposed sale by B2Gold of its interest in the JV. It will have until May 9, 2024, to decide whether to exercise this right.

The transaction is also conditional upon execution of a definitive agreement and investor rights agreement, completion of mutual due diligence, as well as applicable regulatory approvals.

Shares of Aurion surged as much as 11.5% to C$0.58 apiece on Monday, capitalizing the company at C$76.8 million ($57 million). The stock traded between C$0.39 and C$0.82 over the past 52 weeks.

Spot gold climbed as much as 1.3% to $2,187.30 per ounce by 12:15 p.m. ET, rising for an eighth straight day. US gold futures gained 1.5%, trading at $2,196.80 per ounce in New York.

[Click here for an interactive chart of gold prices]

Bullion’s momentum grew on Friday after data showed US employment surpassed expectations in February while wage gains moderated, adding to signs of healthy economic growth and softer inflation.

Meanwhile, the central bank’s long-anticipated pivot to looser monetary policy is widely expected to boost gold’s appeal compared with yield-bearing assets like bonds. Persistent geopolitical tensions in the Middle East and Ukraine have also bolstered the precious metal’s role as a safe haven asset.

The frenzied nature of this month’s gains has led some analysts to conclude that major new buyers are stepping into the market, such as investment funds making bold bets on the global macroeconomic outlook.

The broad question is what might fuel the next leg of the rally.

“We expect gold prices to trade higher this year as safe-haven demand continues to be supportive amid geopolitical uncertainty with the ongoing wars and the upcoming US election,” ING Groep commodities strategist Ewa Manthey said in a note to Bloomberg.

“Gold tends to become more attractive in times of instability when investors pile into safe-haven assets as a hedge against the economic climate, geopolitical tensions or inflation,” Manthey added.

“We still believe the same underlying premise remains, which is the combination of the expectation that the Fed is still going to cut rates later this year and dollar weakness,” David Meger, director of metals trading at High Ridge Futures, told Reuters.

(With files from Bloomberg and Reuters)

In its Q4 and full-year results release on Thursday, the company said it is moving forward with construction of the commercial production facility, with initial site preparations underway.

Construction of the SX/EW plant and other surface infrastructure will begin in the following quarter, the British Columbia-based copper miner said.

“Taseko is in a very unique position heading into 2024 with a fully permitted, low-cost project that will provide 80% growth to our North American copper production profile in the coming years,” Taseko CEO Stuart McDonald said in a news release.

In November 2023, the US Environmental Protection Agency issued the final permit required to begin construction at Florence, which, when fully operational, will have an annual capacity of 85 million lb. of LME Grade A copper and a mine life of 22 years.

Shortly after, Taseko secured additional fundings totalling $100 million for the proposed copper mine, supplementing the previous financings from its partner Mitsui as well as Bank of America.

Record revenue

Last year also saw Taseko post its highest ever revenue of $525 million, which the Gibraltar mine located near McLeese Lake, BC, played a big part of. The revenue represented a 34% increase compared to 2022.

In 2023, the Gibraltar mine produced a total of 122.6 million lb. of copper, with an average copper recovery rate of 82.6% and head grade of 0.25%. This production was higher than the company’s original guidance and also 26% higher than in 2022.

Approximately 120.7 million lb. of copper was sold at an average realized price of $3.84/lb., leading to cash flows from operations of $151.1 million and net income of $82.7 million, both significantly higher than the prior year.

The strong financial performance was also a result of Taseko boosting its stake in Gibraltar from 75% to 87.5% with the acquisition of a 50% interest in Cariboo Copper last March.

“The Gibraltar mine finished a successful year with another strong production quarter. The lower benches of the Gibraltar pit continued to deliver the quality ore we expected, with copper grades averaging 0.27% for the period. This resulted in strong earnings and $63 million of operating cash flow in the fourth quarter,” McDonald said.

Looking ahead, the Gibraltar pit will continue to be the main source of mill feed for the first half of 2024 before mining of ore transitions into the Connector pit in the second half. Stripping activity will continue to be focused in the Connector pit, and further oxide ore from this pit is expected to be added to the leach pads in 2024. Restart of the SX/EW facility at the Gibraltar mine is expected in 2026.

“Factoring in the additional down time in 2024, we expect Gibraltar to produce approximately 115 million lb. of copper for the year, with quarterly production less variable than in recent years,” McDonald said.

After announcing its year-end results, Taseko Mines’ stock jumped 5.1% to a near 52-week high of C$2.29 by 11:40 a.m. ET Friday. The company has a market capitalization of C$658.4 million ($489m).

This licence has been renewed for a further two years until February 2026, it said in a press release Thursday. In September 2022, Forsys has also made an application with Namibia’s the Ministry of Mines and Energy to convert the licence into a full 25-year mining licence (ML); this submission is pending.

“EPL-3638 covers a strategic land position with significant exploration upside,” commented Pine Van Wyk, Forsys’ in-country director. “We greatly appreciate the Ministry’s continued support as we accelerate development of the Norasa project and continue to work closely with the Ministry in obtaining the ML.”

Last June, the company obtained the renewal of its environmental clearance certificate (ECC) from the Ministry, allowing it to further advance the development plan for Norasa for three more years.

The wholly owned Norasa project consists of two uranium deposits: Valencia, for which a 25-year ML has already been obtained, and the aforementioned Namibplaas located 4.5 km to the northeast. Both deposits have NI 43-101-compliant uranium resources and reserves.

In 2015, Forsys completed a definitive feasibility study on the project, outlining a long-life operation producing a total of 77.8 million lb. of uranium oxide (U₃O₈), including 25.8 million lb. during the first five years. The project is anchored by total mineral reserves of 206 million tonnes grading 200 parts per million U₃O₈, for roughly 90 million lb. of U₃O₈.

The pre-tax net present value of the Norasa project is estimated at US$622.6 million, using a discount rate of 8%. Its internal rate of return is 32%, and the payback period is 4.4 years from production.

Forsys Metals’s stock traded 6.1% higher at C$1.05 by 3:30 p.m. in Toronto, near its 52-week high of C$1.15. The company has a market capitalization of C$204.9 million ($152m).

Canadian-based Karora currently has the integrated Beta Hunt gold mine and Higginsville gold operations in Western Australia.

Ramelius also operates in Western Australia. The company’s Wattle Dam mine, located approximately 70 km south of Kalgoorlie, operated from 2006 to 2013. At one stage it was the highest-grade gold mine in Australia.

Additionally, Ramelius owns and operates two production and processing hubs at Mt Magnet and Edna May, both in Western Australia.

On Thursday, it announced that the company’s securities would be placed in a trading halt, pending the release of an announcement.

“Discussions remain confidential and incomplete. No definitive agreement has been reached,” the miner said in a press release. “Unless ASX decides otherwise, the securities will remain in a trading halt until the earlier of the commencement of normal trading on Monday, March 11, 2024, or when the announcement is released to the market.”

Shares in Karora rose 4.25% on Thursday for a market capitalization of $649 million. Ramelius’ stock declined 2.83%, capitalizing the company at $1.2 billion.

This award is given by the Prospectors & Developers Association of Canada (PDAC) for “demonstrating an exceptional commitment to sustainable development in the mining industry”.

It highlights the efforts and achievements of companies that go beyond legal requirements to integrate sustainable development practices into their operations, thereby contributing to the improvement of local communities’ lives, the protection of the environment, and the advancement of the industry.

The O3 Mining team, led by chief executive José Vizquerra, received the award at PDAC’s annual conference held in Toronto this week.

“We continuously strive to follow sustainable development as a core value at O3 Mining and firmly believe that the next generation of mining development will have a key focus on sustainability, mutually beneficial partnerships, and leveraging existing facilities to eliminate the unnecessary construction of new infrastructure,” Vizquerra said.

As the recipient of the PDAC 2024 award, the corporation is committed to sharing its knowledge, practices, and innovations with the rest of the industry to encourage a broader adoption of sustainable development principles, O3 stated.

The company currently has a portfolio of gold exploration assets totalling 750 square kilometres, headlined by the flagship Marban Alliance property located in the western part of Quebec province.

NewOrigin divestment

Meanwhile, O3 announced earlier that it has sold all of its shareholdings in junior explorer NewOrigin Gold (TSXV: NEWO), which has various gold projects in the Canadian Shield.

In total, 6.6 million shares of NewOrigin were sold, representing approximately 11.6% of those outstanding, for total proceeds of C$74,910.

NewOrigin’s stock traded 33.3% higher at C$0.02 each by market close Wednesday, capitalizing the company at C$860,000.

O3 Mining was flat at C$1.36 apiece, for a market capitalization of C$118.7 million.

Global investment in clean energy is rising, and so is demand for minerals essential to battery production. Major mining companies are using M&A to acquire assets in the green metals space to stay competitive and accelerate beyond the traditional process and timeline.

Last year showed a 40% increase in deals across lithium, cobalt, and nickel – four times higher than 2019, according to international law firm Sidley, and one of the few bright spots in M&A in 2023.

Sidley M&A partner Joseph Michaels advises metals and mining clients, providing guidance on corporate governance, SEC disclosure, fiduciary duties for M&A, private equity, venture capital, and corporate finance transactions.

Michaels advised Allkem Limited in its merger of equals with Livent Corporation, a transaction valued at $10.6 billion, and which created the world’s third largest lithium miner and co-authored “Key Considerations for Cross-Border M&A in the Mining and Metals Industry,” Chambers and Partners, in 2023.

Chicago-based Michaels shares his industry insights exclusively with MINING.COM.

MDC: With M&A activity in the sector increasing significantly over the past year as mining companies are consolidating operations to create cost efficiencies and synergies, what opportunities for deals does this create amidst increased competition?

Michaels: Recent years have been eventful in the mining and metals industry. We continue to see mining and metals companies explore and pursue M&A at the highest levels in years.  Some dealmakers in other industries have adopted a wait and see approach until various conditions improve, but that has not been the case in the mining and metals industry.

The rise of M&A has been notwithstanding volatile markets, and in many cases actually because of the dynamics underlying them.  Dealmaking has been fueled by the green energy transition, rising costs to develop new projects, new government incentives, potential for risk-sharing, and continuing desires to build scale, enhance value chains and diversify. 

We expect M&A activity in the industry to remain strong.  We remain optimistic that the robust levels of M&A activity in the industry are sustainable and compelling opportunities will continue to arise.

MDC: Transactions in metals and mining sectors are highly influenced by commodity prices. What should companies anticipate when changes in the prices of metals can significantly impact the valuation and prospects of a potential deal?

Michaels: Changes in the prices of metals can significantly impact the valuation and prospects of a potential deal.  At the end of the day, deal discipline is required of buyers, sellers and partners. 

On one hand, current market realities need to be recognized and accounted for since they will impact valuation exercises, financing, integration efforts, and market messaging.  At the same time, it is important to give due consideration to longer-term views as well, particularly in light of energy transition dynamics and reserve levels. Quality assets are always going to sell, even in difficult markets, so long as agreement on valuation can be reached. Sometimes, that requires creative pricing structures.

MDC: Majors are looking to acquire mid-tiers and beleaguered juniors in a cash starved environment to enter the green energy metals space.  What growth opportunities do you see in this scenario?

Michaels: In this market, there are opportunities for many types and sizes of companies to benefit.  We are seeing a wide range of transaction types being proposed and discussed, including buyouts, investment opportunities, and partnership arrangements. 

Dealmaking is an important tool in any management team’s strategic option toolkit.  Depending on the nature of the parties and transaction, deal drivers may include opportunities presented by the green energy transition, rising costs to develop and operate new projects, new government incentives, the potential for risk-sharing, and the continuing desires to build scale, enhance value chains and diversify.

MDC: Given the nature of the sector, what due diligence is vital in transactions to understand the value of assets, liabilities, potential risks?

Michaels: A transaction in the mining and metals industry is a unique endeavor.  A thoughtful, well-advised and agile approach is critical to achieve the potential rewards of dealmaking, especially in a fluid market.  Mining and metals companies have particular due diligence needs, the breadth and depth of which is not necessarily seen in all other industries. 

In terms of valuation drivers, in addition to cash flow, resource and reserve, and operations due diligence, buyers and investors should have a sense of relevant synergies, government incentives, trade policies, tax considerations, and cash management practices.  When assessing risk, it is important to be mindful of a target company’s government relations, compliance programs, labor practices, land and water usage, pollution sources, supply chain, ESG profile, and local community relations.  An effective and calibrated due diligence process is often part of what makes a deal successful.

MDC: What regulatory hurdles should be anticipated? 

Michaels: There is little doubt that the regulatory environment is challenging in certain areas of the world right now.  Regulators have become quite active, in some cases discouraging or delaying certain dealmaking.  In a few instances, the heightened regulatory focus has been specifically targeted at the mining and metals industry, given its economic and geopolitical significance. There are obviously ways to get deals done when they are compelling.

While deals implicate various regulatory areas, obtaining antitrust and foreign screening clearance typically need to be top of mind for dealmakers.  These are often the biggest hurdles to executing a transaction, given that antitrust regulators and foreign investment screening regimes in many jurisdictions have increasingly scrutinized deals. 

This is emphasized in the mining and metals industry, given that the nature of the industry and the location of critical minerals has led to significant M&A activity occurring on a cross-border basis.  There is a premium on being well-prepared and developing an effective strategy to communicate why a deal is compelling and address any concerns.

MDC: What are the key requirements for legal expertise in the space for successful execution of an M&A deal?

Michaels: All M&A requires coordination among a broad range of constituencies and advisors.  In the mining and metals industry, interdependencies among stakeholders are magnified by the globe-spanning business and the exposure to government scrutiny.  It is critical to be well-prepared and well-advised from the outset. 

An early understanding of deal structure and approval requirements and insight into local conventions permits dealmakers to effectively manage the process, avoid pitfalls and seize opportunities. We continue to see in-house legal teams in the industry consist of elite level practitioners.  Experience in the industry is key for both in-house and outside counsel supporting M&A efforts, given the complexity and specialized considerations. 

While industry factors are important in any M&A transaction, they are emphasized in the mining and metals industry where due consideration needs to be given to unique government approval, public disclosure, community relations, ESG, and labor relations, among other matters.

The DOC calculated countervailing duties from each country in the following ranges: imports from China at rates of 15.41% to 169.66%, imports from Indonesia at rates of 6.69% to 43.56%, imports from Mexico at rates of 1.68% to 77.80%, and imports from Turkey at rates of 1.45% to 147.53%.

The US Aluminum Extruders Coalition and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union were petitioners in the case.

Following the publication of a preliminary determination in the Federal Register in approximately one week, the DOC will instruct US Customs and Border Protection to begin suspending liquidation and collecting preliminary duties (in the form of cash deposits) on entries of aluminum extrusions from China, Indonesia, Mexico and Turkey.

In October 2023, the DOC initiated antidumping duty (AD) and countervailing duty (CVD) investigations of aluminum extrusions from the four countries, as well as AD investigations from Colombia, the Dominican Republic, Ecuador, India, Italy, the Republic of Korea, Malaysia, Taiwan, Thailand, United Arab Emirates and Vietnam.

The preliminary determinations are just the beginning of a broader investigation into the subsidy practices of these countries, it said.

The DOC said it is yet to investigate all potential subsidies thoroughly, including new allegations of subsidy and creditworthiness. The final determination, expected later this year, may adjust these rates, potentially increasing the financial burden on importers of aluminum extrusions from these countries.

“We are encouraged that the Commerce Department has taken preliminary action to remedy the unfair and illegal subsidization of aluminum extrusions from China, Indonesia, Mexico and Turkey,” said Robert E. DeFrancesco, trade counsel to the petitioners and a partner in the International Trade Practice at Wiley Rein LLP.

“The widespread subsidization confirms that foreign governments are willing to provide meaningful and unfair support to boost aluminum extrusion exports, and it is, therefore, critical that Commerce continue to rigorously counter these harms to the US aluminum extrusion industry,” he added.

The January proposal by a Canadian regulator would apply to “hard-to-borrow” stocks like junior miners. Before shorting such securities, traders would be required to confirm there is stock available to borrow or the short sale would be prohibited.

“They’re basically going to hold the brokerage firms accountable,” Kerry Knoll, chairman of Generation Mining (TSX: GENM) said of the proposed amendments by Canadian Investment Regulatory Organization (CIRO).

“People can’t just call up and short and then go looking for the stock,” he said on Monday at PDAC, which runs from March 3-6 in Toronto.

“With juniors, you frequently can’t find the stock to borrow. I have never shorted one, but I’ve tried many times. And when I have tried, I call around and see if anybody can borrow the stock and it’s always ‘no.’”

Shorting is when traders borrow a security to sell into the market, hoping to buy it back at a lower price and pocket the profit before returning the stock to its owner. It’s basically a bet that a stock’s price will go down. Junior mining stocks have been targeted by short-sellers because the market as a whole has been trending downward. However, because of low trading volumes in the sector, shorting can easily devastate a junior’s stock price, leading to calls for different treatment of low-liquidity equities.

Knoll says Generation’s stock price was cut in half over a period of weeks by shorting activity during a time of low trading activity in shares. The company holds the development stage Marathon palladium-copper project in Ontario.

“Suddenly every day with one second to go, somebody sold some amount of stock, maybe 300 shares, 500 shares and closed it down a penny or two,” he said. “This went on for weeks and weeks.” 

Short-sellers want to trade the stock down at the end of the day so they’ll be under less pressure to buy back the stock and cover their position, he said.

Chuck Fipke, who discovered Canada’s first diamond mine Ekati with Stu Blusson, says he’s also noticed unusual trading in his current venture, Cantex Mineral Development (TSXV: CD), and late-day low-ball bids meant to drive down the company’s share price.

Cantex’s Rackla North project in the Yukon hosts North America’s highest-grade silver-lead-zinc deposit. The company discovered early last year it also hosts very high grades of critical mineral germanium, used in solar panels, chips, and military applications, and production of which is dominated by China.

The stock rose, Fipke says, before “short-sellers knocked it down.”

But he admits he can’t prove what he describes as an “epidemic of short-selling” that’s plaguing juniors.

“I’m a geologist, hey, my job is I look for mineral deposits,” he said by phone ahead of PDAC, adding it’s up to the regulators to investigate the issue. “I can’t do everything,” he said, adding he manages drilling of every hole at the project, which has seen 60,000 metres of drilling since 2016. “It’s easy to drill, but it’s hard to drill in the right place.”

Junior market investors say the problem has emerged since Canadian regulators removed the uptick rule in 2012 that prohibited short sales at a lower price than the previous trade.

Save Canadian Mining, started in 2019 by Power Nickel (TSXV: PNPN; US-OTC: PNPNF) CEO Terry Lynch backed by Eric Sprott, Rob McEwen and others, has been trying to uncover proof pointing to illegal or uncovered short-selling.

At a presentation at the Investment Leaders Forum, Lynch noted that only 40% of trading in Power Nickel stock is on the TSX Venture, with 60% taking place on less transparent “dark exchanges” on which institutional investors can trade out of the public eye.

Knoll says the outsized effects legal short-selling has on juniors could easily be remedied by bringing back the tick test. (He also says it’s one main reason Australia, which does have an uptick rule, has a stronger junior mining market than Canada’s; the other reason being the country’s requirement for pension funds to invest in Australian companies.)  But that would be counter to the interests of banks, which make money off every trade – including short sales — on their platforms and have more freedom to trade as they please without it.

CIRO proposal

Amended rules proposed by CIRO would require traders to demonstrate if the stock they want to short is hard to borrow, they’d have to actually show there’s stock available to borrow, or go as far as “preborrowing” the stock. If there is no ‘reasonable expectation” they will be able to settle the trade by the settlement date (within 2 days – on May 27 this changes to within 1 day), they can’t short the stock. As part of this requirement, CIRO sees dealers compiling lists of “easy to borrow” securities.

The proposal is open for comment until April 12.

In addition to the proposal, CIRO and CSA have established a working group looking at concerns raised by commenters through previous consultation, a CIRO spokesperson told The Northern Miner by email.

“This work will assess whether any potential rule amendments would be appropriate in the Canadian context. Any proposed rule changes that results from the working group’s recommendations would be published for public comment in the normal course.”

Elsewhere at PDAC, traffic in the Investors Exchange at the mineral exploration-focused show, which opened on Sunday has been pretty good – even at nickel and lithium juniors’ booths. Both metals sharply declined last year – lithium in the neighbourhood of 80% and nickel 40%.

One nickel junior attributed the steady stream of booth visitors to “bargain hunting,” while a lithium junior expressed hope that the lithium price, which has been rising recently, has bottomed.

Spot gold rose another 1.0% to a fresh high of $2,149.25 an ounce, surpassing Tuesday’s intraday high of $2,141.60 an ounce. US gold futures went as high as $2,157.50 an ounce in New York.

[Click here for an interactive chart of gold prices]

The uptick follows Fed chair Jerome Powell’s prepared testimony to a House panel, in which he told lawmakers that it will likely be appropriate to begin lower borrowing costs “at some point this year.”

“Powell’s neutral to slightly dovish tilt has given gold and especially silver added momentum into the US session,” said Ole Hansen, a commodity strategist at Saxo Bank A/S.

Gold’s has climbed 5% over the last five sessions, a swift ascent that has taken some in the market by surprise, particularly since there hasn’t been any major change in expectations for when the US central bank will lower borrowing costs.

Swaps markets show a 65% chance of a cut in June, compared with 58% at the end of February, according to Bloomberg data.

“Powell did confirm that cuts are happening later this year,” said Aakash Doshi, an analyst at Citigroup. “There’s less hawkish risk.”

Meanwhile, the bank has raised its gold forecast for the next three months to $2,200 an ounce, and upgraded the projection to $2,300 for the next six to twelve months. It cited recession risks in the second quarter which can favor gold, “especially given the recent equity and credit market rallies.”

Beyond rates, other factors have contributed to gold’s strength. Macro funds, which haven’t been active in the market until recently, were a new force of buying.

Bullion’s role as a haven asset is also being aided by elevated Middle East tensions and disruptions to global shipping, China’s persistent economic woes and the US presidential election at the end of the year.

The risk of a US stock market correction — flagged by weak manufacturing data on Friday — may have persuaded some investors to move out of equities and into gold, Saxo’s Hansen said.

(With files from Bloomberg)

The deal is the largest mining investment in Ecuador’s history, according to the miner, and it is separate from an already committed $311 million for the project, included in the current Investment Protection Agreement (IPA) for Cascabel.

“[This deal] not only reinforces the protections for our key investment in Ecuador but also symbolizes a deepening of our relationship with the Ecuadorian State,” chief executive Scot Caldwell said.

SolGold released in February a new pre-feasibility study (PFS) for Cascabel in which it managed to slash upfront costs. Pre-production capital used for initial mine development, first process plant module and infrastructure is now estimated at $1.55 billion, compared to $2.75 billion from the PFS issued in April 2022.

According to SolGold, the size of the entire resource indicates the mine’s potential to be a multi-generational asset, potentially one of the 20 largest copper-gold mines in South America. Mine construction is set to start in 2025.

Investors have been skeptical of SolGold management’s ability to deliver the project to its potential. The company’s share price has halved over the past year, while the miner has had to cut spending to stay afloat, prompting a strategic review of its assets.

SolGold’s shares were trading 23.07% higher in London mid-afternoon to 8.13p. Year-to-date, however, the stock is down more than 18%. The company’s current market capitalization is £243 million (about $310m).

On Tuesday, spot gold rose as much as 1.3% to hit a new record of $2,141.60 per ounce, before paring its gains to 0.6%. US gold futures had a similar run, peaking at $2,150.50 per ounce then falling to $2,134.80.

[Click here for an interactive chart of gold prices]

Gold has added about $100 in the past five sessions, fueled by a combination of expectations for monetary easing, geopolitical tensions and the risk of a pullback in equity markets.

According to Bloomberg, the scale of the recent move has surprised some market watchers, who said it may be partially driven by momentum,

The rising risk of a stock market correction — flagged by weak US manufacturing data on Friday — may have persuaded some investors to move out of equities and into gold, said Ole Hansen, commodity strategist at Saxo Bank A/S.

While the timing of the Fed’s pivot remains uncertain, signs that it’s getting closer have supported gold since mid-February. Swaps markets show an almost 60% chance of a rate cut in June, a higher probability than early last month.

The recently rally has also highlighted an increasing disconnect between spot prices and outflows from bullion-backed exchange traded funds. Holdings in SPDR Gold Shares, the world’s largest such ETF, fell by 0.3% on Monday, taking the total to the lowest level since July 2019, according to data compiled by Bloomberg.

Those outflows have partly been offset by persistent central bank demand for the precious metal, which helped keep prices elevated even as real interest rates spiked last year. Bullion was also supported over the Lunar New Year, as Chinese consumers sought a hedge against turmoil the country’s stock market and property sector.

In the first months of this year, gold’s role as a haven asset is being underlined by elevated geopolitical risks, with attacks on shipping in the Red Sea showing escalating Middle East tensions. China’s economic woes and the US presidential election at the end of the year make it a potentially volatile mix.

“Speculation over a Fed rates pivot and continued geopolitical tensions keep gold shining,” said Ewa Manthey, commodities strategist at ING Groep. “We expect gold prices to trade higher this year as safe-haven demand continues to be supportive amid geopolitical uncertainty with ongoing wars and the upcoming US election.”

Still, bullion has further to go to reach its inflation-adjusted peaks set more than a decade ago. It has risen more than 600% since the turn of the millennium, though adjusted for inflation it remains below the high of $850 touched in January 1980, which would be equivalent to more than $3,000 in today’s dollars.

(With files from Bloomberg)

Spot gold rose 1.5% to $2,115.43 per ounce by 2:35 p.m. EDT, just $20 off its record high of $2,135 set in December 2023. US gold futures also traded 1.4% higher at $2,124.70 per ounce.

[Click here for an interactive chart of gold prices]

“We still think it could go higher as well,” said Ryan McKay, senior commodity strategist at TD Securities.

“That’s because some discretionary macro traders are underinvested in the metal “relative to historical norms heading into a Fed cutting cycle,” he told Bloomberg in an interview.

Gold could easily push above the record highs, echoed Phillip Streible, chief market strategist at Blue Line Futures in Chicago, in a Reuters note.

The surge in gold prices comes amid a burgeoning consensus that the first US interest rate cut since early 2020 is just around the corner. Nearly three in five investors bet the Federal Reserve will trim rates in June following a slew of weaker-than-expected US data reports, swaps markets data show.

A polarizing, upcoming US presidential election and ongoing wars in Ukraine and Gaza are also giving bullion longer-term support.

“Heightened geopolitical tensions around the world have reduced the short-selling appetite, basically all strengthening gold’s current buy-on-dips credentials,” wrote Ole Hansen, Saxo Bank’s head of commodity strategy.

Robust buying by investors has been reflected in gold exchange-traded funds, with holdings of SPDR Gold Shares

seeing their first daily inflow in nine trading sessions last Friday, Bloomberg data showed.

Earlier, London’s gold price benchmark hit an all-time high of $2,098.05 an ounce at an afternoon auction, surpassing the previous record of $2,078.40 set on Dec. 28.

(With files from Bloomberg and Reuters)

The work includes driving a development drift from the existing Cow portal into the Lowhee zone, from which a bulk sample of 10,000 tonnes will be taken.

“We are very pleased to secure funding that will enable us to commence the development of a 1.2 km underground drift at Cariboo and advance important design and engineering work ahead of the anticipated receipt of permits in Q2 2024,” said Osisko Development chair and CEO Sean Roosen.

“Completing this work is a significant step in further de-risking the project ahead of a construction decision by accessing the orebody and demonstrating the performance of the roadheader and ore sorter technologies, while we continue to progress toward sourcing a fully-funded solution for the project,” he added.

“Importantly, this facility is non-dilutive with no early repayment penalties and provides us with financial flexibility to refinance the facility prior to maturity.”

The Cariboo feasibility study was produced in 2023. It foresees underground mining for 12 years, during which time about 1.8 million oz. of gold will be produced. The project was given an after-tax net present value with a 5% discount of C$502 million and an internal rates of return of 20.7% at a gold price of $1,700 per ounce.

Osisko received environmental approval for Cariboo last year, and it anticipates receiving others by the middle of this year.

Measured and indicated resources at Cariboo are 27.1 million tonnes grading 4.0 g/t gold for almost 3.5 million oz. of contained gold. There is also an inferred resource of 14.4 million tonnes at 3.5 g/t gold for 1.6 million contained ounces.

Despite releasing relatively encouraging exploration results from the Fazenda do Posto (FDP) and Butiá deposits in Rio Grande do Sul state, Lavras shares fell 24% to a session low of C$0.24 on Thursday morning. Lavras, which has a market capitalization of C$40.5 million is still up 93% over the past year.

“People buy on the rumour and sell on the news now in this market – I think it’s just a factor of the market,” Naomi Nemeth, vice-president for investor relations, told The Northern Miner by telephone.

Lavras announced on Thursday that hole 23FP011 at FDP returned an average grade of 1 gram gold per tonne over 173 metres, starting from a depth of 69 metres. This section included 1.4 grams gold over 94.8 metres. Similarly, hole 23FP008 showed 1.1 grams gold over 123 metres, indicating the presence of a large, near-surface, bulk-tonnage gold system, the company said in a release.

The FDP discovery has now been traced over a 200 metres strike and lies 150 metres west of the Butiá deposit, which already hosts a measured and indicated resource of 12.9 million tonnes at 0.97 gram gold per tonne for 376,751 oz. of metal.

The company says the proximity of these two sites raises the potential for a combined open-pit development project.

Retail bail

One explanation for the share price drop is that retail investors might have been seeking more bonanza-grade intercepts, as in the announcement of Aug. 2 last year. Hole 23BT004 returned a 4-metre section from 31 metres depth, where each respective metre assayed returned 52.3 grams gold per tonne, 9.28 grams, 110.5 grams and the last had 2.28 grams gold. The hole essentially started the six-bagger rally through early October.

“What we’re building there at the FDP and Butiá project is several football fields in each direction of mineralization, and the corporates get it. It’s more the retail shareholders who want to see super high grade at that volume,” she said, suggesting it’s the retail investors leaving in droves.

“It’s also possible we’ve got a big seller, but how do we know in Canada? We never know who’s selling our stock; unless they tell us.”

Nemeth suggests the selloff was part of normal market fluctuations and cycles, with no material reason to blame for the negative movement, other than noting that a particularly sharp selloff like today’s, was in her experience, rare.

Nemeth said that as of December 2023, the company had about C$10 million in cash in the bank to see the current exploration through, and follow-up work will be budgeted as needed.

The company enjoys the financial backing of industry notables, including Eric Sprott at 15%, a 30% institutional follow, 20% by insiders and management, and 5% by Kinross Gold (TSX: K; NYSE: KGC). Other notable owners include Lawrence Lepard, with insiders buying a big chunk of shares in the last few months. Eric Sprott, Rob McEwen, and Kinross bought shares at C$1.35.

2024 exploration

Lavras says the exploration results from FDP confirm the presence of extensive gold mineralization but also suggest a high-grade core of mineralization that could significantly impact the project’s economics.

Gold is mainly found in hydrothermally altered granitoid rocks, which show characteristics of a disseminated, bulk-tonnage gold system.

Lavras plans to continue its exploration with an additional 10,000 metres of drilling budgeted for the FDP and Butiá sites.

Spot gold gained by more than 1.4% to $2,075.03 per ounce by 11:30 a.m. ET, about $60 off the record high set in December 2023. US gold futures were also up by 1.4% to $2,083.70 per ounce.

[Click here for an interactive chart of gold prices]

A measure of US factory activity shrank at a faster pace in February as orders, production and employment contracted, suggesting manufacturing is struggling for momentum, new data showed.

Separate data Friday showed US consumer sentiment fell in February for the first time in three months as current and expected views of the economy deteriorated.

Signs of a softening economy solidified expectations that the Federal Reserve will need to lower borrowing costs to help shore up the economy.

Treasury yields tumbled as a result, sending bullion on its way to the biggest intraday increase since mid-January.

Remarks from a slew of Fed officials also weighed on bond yields, which in turn boosted gold.

Federal Reserve Governor Christopher Waller said he would like the central bank to boost its share of short-term Treasuries. Also speaking Friday, Fed Bank of Chicago President Austan Goolsbee told CNBC he believes the Fed funds rate is quite restrictive.

Separately, his Richmond counterpart Thomas Barkin said markets are pricing in fewer rate reductions in response to economic data. Dallas Fed chief counterpart Lorie Logan reiterated it’ll likely be appropriate to start slowing the pace at which it shrinks its balance sheet.

Analysts from JP Morgan said earlier this week that expectations of a US rate cut, along with a weaker US dollar, will continue to drive gold higher, taking the metal to new highs by 2025.

“Across all metals, we have the highest conviction on a bullish medium-term forecast for gold,” said Gregory Shearer, the bank’s head of base and precious metals strategy.

(With files from Bloomberg)

Three-month nickel on the London Metal Exchange rose 0.4% to $17,675 a metric ton by 1100 GMT after touching $17,830, its highest since Nov. 10, 2023.

LME nickel has rallied 8.6% this month, and is on track for its first monthly gain since July.

The most-traded May nickel contract on the Shanghai Futures Exchange climbed 1.7% to 137,710 yuan ($19,140) a ton. The contract is up 7.1% so far this month.

[Click here for an interactive chart of nickel prices]

“People are asking, is the cost floor high enough now, have we reached a floor in nickel? It does feel like the super bearish narrative is being challenged,” Dan Smith, head of research at Amalgamated Metal Trading said in a note.

Nickel experienced the most significant decline among all LME base metals last year, dropping by 45% due to weakening demand and a consistent increase in Indonesian production.

“The most recent LME positioning data showed prices were being lifted on a combination of bearish speculators closing positions and a smattering of bullish inventors buying new ones,” Smith added.

Meanwhile, the Indonesian government said on Thursday that EV producers shouldn’t anticipate any significant recovery in prices.

Septian Hario Seto, the government official overseeing Indonesia’s nickel processing boom, said that prices are unlikely to exceed $18,000 a ton on the London Metal Exchange. The Southeast Asian nation intends to ensure the market remains adequately supplied to maintain lower costs for electric vehicle manufacturers, Seto said.

“This concept must be well understood by all nickel producers elsewhere,” Seto, a deputy at the Coordinating Ministry for Maritime Affairs and Investment, said in an interview on Wednesday.

“The government’s objective is to establish an equilibrium to ensure that nickel demand, particularly for EVs, is met adequately.”

(With files from Reuters and Bloomberg)