Local authorities in the Pakistani province of Baluchistan refused to meet a Canadian-Chilean mining consortium for talks before rejecting a bid for one of the world’s richest deposits of gold and copper, the company says.

The consortium, Tethyan Copper Co. Pakistan Ltd., (TCC) expressed its disappointment on Friday after the provincial government shot down an application for a mining licence at a remote site in the dry hills near the Afghan-Pakistan border, known as Reko Diq. Trouble with the application erupted earlier this year, when Chinese competitors pushed an alternate plan for what could become the biggest mine in Pakistan.

The latest statement from the consortium, which represents Toronto-based Barrick Gold Corp. and its Chilean partner Antofagasta, suggests that the problems ran deeper than previously understood. Communication apparently broke down between the mining group and the provincial authorities – not a good sign, because Pakistan’sSupreme Court made clear this year that “this matter falls exclusively within the domain of the government of Baluchistan.”

No matter how much influence themining companies may exert in the capital, in other words, responsibility for the licence falls into the domain of a border province that is notorious for its poverty and lawlessness.

“The GOB [government of Baluchistan] has not responded to requests for meetings to resolve the issue, and the rejection notice compromises TCC’s preferred route of resolution by negotiation,” the company statement says.

If the rejection proves final, Chinese companies will become the front-runners to replace TCC. Metallurgical Corp. of China is already leading development of a smaller mine nearby at Saindak, and provincial authorities have previously said the Chinese are offering something they eagerly want: a processing facility that would handle some of the raw material inside Baluchistan.

Some local officials have long pushed for China’s involvement for the promise of broad investment in infrastructure in the province, such as ore processing and exporting of finished copper products, which would provide a major boost to the area’s economy.

The Canadian-Chilean group claims that the rejection of the mining licence application is a breach of Pakistani laws and a 1993 joint-venture agreement with the provincial government. TCC says it remains open to talking about the deal, however, and continued touting the potential benefits of the mine: “TCC strongly believes that the Reko Diq project can contribute significantly to the development of a modern, transparent mining industry in Baluchistan,” the statement said.

The exploration licence for Reko Diq expired in February and the consortium had been waiting anxiously for a mining licence since submitting a feasibility study – reportedly prepared by SNC-Lavalin Group Inc., of Montreal, at a cost of $220-million.

Estimated annual production in the first five years from Reko Diq could have amounted to 100,000 ounces of gold and 150 million pounds to 160 million pounds of copper. None of the assets were counted among Barrick’s proven reserves.

Source:

Qatar Holding, the investment arm of the Qatar Investment Authority which also owns Harrods, will provide a $600m loan facility that will allow European Goldfields to push ahead with production at its three key mines.

In July, Greece granted European Goldfields a long-awaited permit that allows it to mine for gold in the north of the country, a move set to turn the London-based firm into the European Union’s largest primary gold producer.

The deal was announced after Qatar’s Emir Sheikh Hamad bin Khalifa al-Thani met Prime Minister George Papandreou in Athens this weekend.

“Qatar’s investments show trust in the Greek economy,” Papandreou told a news conference after the meeting.

The first gold is expected next year and the project will bring more than 1,500 jobs in the north-east of the country.

Under the agreement, European Goldfields’ shareholders will also be offered a further $150m of loan notes, with the rights for Qatar to eventually take up 20 per cent in the company if the loans are taken up and other options exercised.

Qatar Holding has also bought a 9.9 per cent stake in European Goldfields from an existing shareholder, the Greek building firm Ellaktor.

The deal marks the second major investment in Greece by Qatar Holding in two months after the Gulf state struck a deal in August to provide funding for a merger of two of the recession-hit country’s largest banks.

Ahmad Mohamed Al-Sayed, chief executive of Qatar Holding, said: “Our latest investment helps to further diversify our investment portfolio in the commodities sector, with a specific position in gold resources and another long-term partner secured for the future.”

MEET THE ADVISERS

MICHAEL RAWLINSON
LIBERUM
Liberum Capital was appointed nominated adviser to European Goldfields when the gold miner listed on the alternative investment market (Aim) in 2004, with Michael Rawlinson leading the team.

Rawlinson, a well-known name in mining circles, began his career with the now-defunct merchant bank Flemings, before joining Cazenove after its merger with JP Morgan, where he rose through the ranks and was made partner.

He worked on the initial public offerings of a number of natural resources companies including Billiton, Xstrata, Vedanta and Anglo American.

Rawlinson also advised Anglo-Swiss miner Xstrata on its $18bn acquisition and $12bn financing of their acquisition of Falconbridge, the Toronto-based nickel and copper company in 2006.

More recently Rawlinson’s expertise in the sector ensured that Liberum was granted a role in advising Glencore on its giant IPO. Rawlinson sits on the board of Liberum and heads the boutique investment bank’s mining, resources and energy division.

Lazard & Co.’s metals and mining team was appointed as financial advisers to European Goldfields on its deal with Qatari Holding.

Source: cityam.com

So far the area is about 1.8 kilometres long and 800 metres wide, Empire Mining says, with copper values in soil samples hitting over 3,000 parts per million in several clusters within a roughly one kilometre square area.

The anomaly is notable as it is much the same size and shows similar copper-gold grades as one that Empire Mining outlined in the Main zone, less than kilometre away to the northeast, which it subsequently drilled returning strong copper-gold intercepts this year.

In fact deposit-wise Empire Mining theorizes that the Main zone and the new Southwest zone are one and the same.

Through drilling, Empire Mining says it hit a fault at the bottom of copper-gold mineralization in the Main zone, which has returned as much as 2.02 percent copper, 0.96 g/t gold and 21.64 g/t silver over 47 metres.

That fault in the Main zone tipped-off Empire Mining to the possibility copper-gold mineralization might keep running deeper in a deposit the base which had subsequently shifted.

The question for Empire Mining was, where did it go?

Empire Mining now believes the answer lies in the Southwest zone. Supporting Empire Mining’s view that it could represent the continuation of mineralization in the main zone is the apparent higher temperature at which the Southwest area was formed.

That higher temperature suggests formation at greater depths.

The copper-gold anomaly is intriguing enough for Empire Mining to warrant drilling, which it says will begin this fall.

In July Empire Mining signed an agreement with Alacer Gold to acquire a 100-percent stake in the Bursa property, updating what had been an option for a 65-percent interest.

Source: mineweb.com

The operation is set to produce 280 000 oz next year, with the $354-million growth project set to reach completion by the third quarter of 2014.

Exploration since the mine started producing in 2006 had doubled proven and probable reserve ounces to 10.2-million ounces, which is what prompted Eldorado to look into boosting Kisladag’s production.

According to the study, the mine will produce 6.2-million ounces from next year to 2026.

Life of mine cash costs are pegged at $430-$450/oz, with total cash costs some $450-$470/oz, Eldorado said.

The expansion’s $354-million price tag included new mining equipment, crushing, screening and an ADR plant, expanded infrastructure, and a $35-million contingency.

“Kisladag, with an average expanded production rate of approximately 475 000 ounces annually, will contribute significantly to the continued growth of Eldorado’s high quality production base,” Eldorad CEO Paul Wright said in a release.

The expansion will require the approval of a supplementary environmental impact assessment.

Eldorado is targeting production of 1,5-million ounces a year within the next five years from its current assets, which include three mines in China, one in Turkey, and development projects in China, Turkey and Greece, Wright said earlier this year.

The company plans to produce 700 000 to 725 000 oz this year, at a at $390 to $410/oz cash operating cost.

Shares in Eldorado rose nearly 2% on the TSX to trade at C$19.25 apiece by 14:12.

The company on July 28 announced profit for the three month ended June 30 had climbed by 36% to $81,7-million, on increased production and higher metal prices.

Source: (miningweekly.com)

The commodity boom that has been driven by the demand for natural resources to drive growth in emerging economies, including China and India, resulted in a record net profit increase of 156 percent year on year last year, as the top 40 companies raked in $110 billion (R740bn), up from $43bn in 2009, the report said.

Total operating costs of the top 40 companies increased 12 percent last year, with employee costs the main driver, despite a decrease in direct employment.

“Foreign currency fluctuations continue to create volatility in the results and played a role in the cost increase,” the report noted.

Also weighing on the mining industry was the fact that the building of new mines and expansion was not getting any easier.

“Cost inflation, lead times and skill shortages are increasing challenges to all industry players and no one is immune,” the report said.

Presenting the report, Hein Boegman, the head of PwC’s Gauteng audit practice, said that the shortage of mining engineers was a concern.

He said the outlook expressed by industry leaders was increasingly positive, with companies taking definitive action on capital projects and mergers and acquisitions.

There were suggestions that in future, chief executives of mining companies should be politicians because mining was high on the political agenda, with signs of nationalisation in Zimbabwe, Australia and Papua New Guinea, and talk of the same in South Africa.

“The outlook of the mining industry is different. The job of a chief executive is changing,” Boegman said.

The top 40 companies had announced more than $300bn in capital programmes, with over $120bn this year, more than double the total that was spent last year.

Cash flow among the top 40 companies had improved and for every $1 revenue, $0.18 was invested back into the business compared with $0.40 in 2007. In the next nine years, the investment would increase to $0.26.

PwC analysed 40 of the largest listed companies by market capitalisation in all parts of the world whose primary business was mining.

South African companies that were included in the Top 40 were Impala Platinum and AngloGold Ashanti.

Other Top 40 companies included BHP Billiton of Australia, Vale of Brazil, Rio Tinto, China Shenhua Energy Company of Hong Kong, Xstrata, Anglo American of the UK and Potash Corporation of Saskatchewan of Canada.

Source: Business Report/capetimes.co.za

“This is an outstanding deposit, and also technically fairly straightforward. It just happens to be located in a very challenging country,” Regent said in a presentation in New York that was broadcast over the Internet.

Barrick, the world’s biggest gold miner, and Chile’s Antofagasta Minerals each own half of the Tethyan Copper Company (TCC), which in turn holds 75% of the Reko Diq project.

The balance is held by the province of Balochistan, where the project is located.

The partners completed a feasibility study and environmental and social impact assessment on the project last year and have now applied for a mining licence.

The licence application is being reviewed by various authorities, and there are also court proceedings under way after the local government’s authority to grant the mining licence was challenged, Regent said.

Pakistan authorities may be under increasing pressure to award the project to a Chinese group, rather than to the Western-linked TCC joint venture, the Globe and Mail reported on May 17.

Resource-hungry China has been actively acquiring mineral deposits around the world, and the Pakistan government could be more susceptible to overtures in the wake of the US Navy Seal attack on a Pakistan compound, in which al-Qaeda leader Osama bin Laden was shot and killed.

Based on the TCC feasibility numbers, Reko Diq would cost about $3,3-billion on a 100% basis, for a 120 000 t/d processing plant.

Barrick’s share of annual production in the first five years was estimated at around 100 000 oz of gold and 150-million to 160-million pounds of copper and the project has total measured and indicated resources of more than 25-million ounces of gold and 31-billion pounds of copper, according to the company’s website.

“It’s a massive orebody,” Regent commented, noting that the size and grade of the resource makes the project comparable with Chile’s Escondida operation, which is the biggest copper mine in the world.

“For us, this is a great deposit. But it’s one where we are going to be very cautious in terms of how we move forward,” Regent said.

“We’ll take it one step at a time and make sure that we are fully satisfied from a risk-management perspective that this project is in fact doable.

“But I’d say the prize is worth it in terms of the quality of the deposit.”

Reko Diq is not included in Barrick’s plan to boost production from up to eight-million ounces this year to nine-million ounces a year of gold in five years’ time.

That growth will come from big new mines being built in South America, as well as additional production from the company’s Cortez Hills operation in Nevada.

Barrick will start commissioning its new Pueblo Viejo mine in the Dominican Republic late this year, followed by first production at the Pascua Lama project, on the border of Chile and Argentina, scheduled for 2013.

Beyond that, projects like Cerro Casale in Chile, Donline Creek in Alaska, Reko Diq and a potential expansion at the Turqoise Ridge mine in Nevada, fall into the “year five to ten” category, Regent said.

Barrick also announced last month it would pay C$7,3-billion for Equinox Minerals, a copper producer, to gain the smaller firm’s assets in Zambia and Saudi Arabia.

Regent repeated earlier statements that the acquisition does not represent a shift away from gold, but said the company is bullish on the outlook for copper, as constrained mine supply will not be able to meet growing demand for the industrial metal.

NOTES

Barrick said late on Tuesday that it had priced $4-billion in debt securities, including $700-million of 1,75% notes due 2014 and $1,1 billion of 2,90% notes due 2016 of Barrick, as well as $1,35-billion of 4,40% notes due 2021 and $850-million of 5,70% notes due 2041 of subsidiary Barrick North America Finance.

The offering will close on or about June 1, and the company will use the proceeds to fund part of the Equinox acquisition, including for fees and expenses, as well as for general corporate purposes.

Shares in Toronto-based Barrick rose 1,07% on Wednesday, to C$46,12 apiece by 16:00 in Toronto.

Source: miningweekly.com

South Africa, with more than $2.5 trillion in mineral reserves, is the world’s richest nation by “commodity wealth”, a Citigroup report shows.

According to recent data from the Gold Miners Association (AMD), there are five gold mining companies operating in Turkey that have extracted 17 tons of gold with a value of $800 million. A total of 8.6 out of 17 tons of gold have been extracted from the Kışladağ gold mine in the Aegean province of Uşak.

Furthermore, the AMD data show that 4.2 tons and 3.7 tons of gold were extracted from the Mastra mine in Gümüşhane and Bergama Ovacık in İzmir, respectively. The remaining half ton of gold was extracted from both the İliç gold mine in Erzincan and the Salihli-Sart mine in the province of Manisa. The production of gold in Turkey started in 2001, with the amount extracted increasing yearly. The total amount of gold mined 10 years ago was only 1.4 tons, while it rose to eight tons in 2006, 11 tons in 2008, 14.5 tons in 2009 and 17 in 2010, bringing the total amount extracted since 2001 close to 82 tons.

Speaking to the Anatolia news agency, AMD’s General Coordinator Muhterem Köse said the total gold extracted in Turkey is only 10 percent of the total deposit. Köse noted that the gold mining sector has been in the spotlight in the last few years.

Experts say Turkey’s total underground gold resources are estimated at 6,500 tons.

http://www.allvoices.com/s/event-7917358/aHR0cDovL3d3dy50b2RheXN6YW1hbi5jb20vbmV3c0RldGFpbF9nZXROZXdzQnlJZC5hY3Rpb24/bG9hZD1kZXRheSZhbXA7bmV3c0lkPTIzMjc3MyZhbXA7bGluaz0yMzI3NzM=

Afghan Krystal Natural Resources will invest up to $50 million in Qara Zaghan mine in northern Baghlan province and plans to begin production by 2013, said the company’s president and prominent Afghan entrepreneur, Sadat Mansoor Naderi.