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What's up with the biggest thing happening in mining in NW Ontario?

Ring of Fire News – 28 Jul 12

  • LOADS o’ predictions about how Cliffs Natural Resources stock and finances are doing ….  “Cliffs Natural Resources is set to announce its second quarter earnings on Wednesday. We are expecting the company post a decline in net income on a year-over-year basis. Iron ore prices have significantly declined from levels seen a year ago even as shipments could increase for the company. Also, the slump in U.S. thermal coal demand will likely hit the company’s revenues. We expect that falling prices of heavyweight iron ore will drag the company’s overall margins down. Rising energy, labor and other input costs will also put pressure on margins. Cliffs is the largest producer of iron ore pellets in North America and a major supplier of direct-shipping lump and fines iron ore out of Australia. It is also a significant producer of metallurgical coal. Our price estimate for Cliffs Natural Resources is at $71, which is about 60% ahead of the current price of the company’s stock …. Our primary concern stems from the fact that the North American iron ore and coal divisions’ revenues are highly dependent on a few customers – ArcelorMittal, Algoma and Severstal together make up about 35% of Cliffs’ total revenues. A loss of sales to any of these existing customers could have a substantial adverse impact on the company’s revenues and profitability.”  SourceMore predictionsmoremore
  • …. and the reality?  In the words of one clever headline writer, “CLF Stock Falls Off A Cliff”   “Iron ore and coal producer Cliffs Natural Resources Inc’s quarterly profit fell about 40 percent on lower prices and higher costs. The company’s net profit for the second quarter fell to $258 million, or $1.81 per share, compared with $409 million, or $2.92 per share, a year earlier. Revenue fell 10 percent to $1.6 billion, the Cleveland-based company said on Wednesday. Prices of benchmark iron ore with 62 percent iron content , which have fallen 10 percent in the April-June quarter, closed at $118.60 on Wednesday. Sales margins fell 39 percent in the second quarter due to higher labor, mining, and maintenance costs, Cliffs said in a statement. The company’s U.S. iron ore revenues per ton fell 13 percent to $119.51 in the second quarter on weak prices. Cliffs shares closed at $41.15 on Wednesday on the New York Stock Exchange. The stock fell to a two-year low of $40.66 earlier.”  Sourcemoremore – more – moremore – more – moremoremore – more – more
  • Here’s Cliffs’ official take:  “Cliffs Natural Resources Inc. …. reported second-quarter results for the period ended June 30, 2012. Consolidated revenues decreased 10% for the second quarter to $1.6 billion, from $1.8 billion in the same quarter last year. The decrease was primarily driven by lower year-over-year pricing for the commodity products the Company markets. Lower revenues and increased cost of goods sold driven by higher labor, mining, and maintenance expenses resulted in a 39% decrease in consolidated sales margin to $449 million compared with the second quarter of 2011. Partially offsetting the sales margin decrease were higher global iron ore sales volumes of 13% driven by incremental volume from Eastern Canadian Iron Ore related to the acquisition of Bloom Lake Mine and the completion of Cliffs’ expansion project in Asia Pacific Iron Ore ….”  Source (company news release) – more
  • Another company buying up dibs on bits of the Ring of Fire  “Further to the MacDonald Mines Exploration Ltd. press release dated June 29, 2012, the Company is pleased to announce it has now signed a definitive purchase and sale agreement for the acquisition of all of Noble Mineral Exploration Inc’s (TSX-V: NOB, “Noble”) property interests in the James Bay Lowlands, Ring of Fire region. In order to acquire those interests, which include a minority interest in 6 claims on otherwise 100% owned MacDonald property, the Company has agreed to the following payments: Cash: $150,000, of which $75,000 will be paid within 5 days (refundable in the event the property is not transferred by the deadline noted in the agreement) and $75,000 to be paid within 120 days of the transfer of the property; Common Shares: 3,000,000 common shares of the Company; and Warrants: the issuance of a total of 3,000,000 warrants to acquire common shares of the Company with 1,000,000 warrants exercisable at a price of $0.30 per share; 1,000,000 warrants exercisable at a price of $0.50 per share and 1,000,000 warrants exercisable at a price of $0.70 per share. All warrants expire after two years from the date of issuance. This transaction has been approved by the TSX Venture Exchange ….”  Source (MacDonald Mines news release) – more (letter to shareholders) – more (Noble Mineral Exploration news release) – more
  • Remember the Assembly of First Nations supporting Matawa communities in getting ready to issue eviction notices to companies on their traditional territories?  Here’s part of the wording of the draft AFN resolution, for the record:   “…. be it resolved that the Chiefs-in-Assembly:  1. Support the free, prior and informed consent (FPIC) position taken by the Matawa First Nations on the moratorium and the eviction of mining companies in the area known as the Ring of Fire.  2. Demand that Canada, Ontario and industry engage the Matawa First Nations in a process that is grounded on the rights to provide FPIC prior to any further development in the area known as the Ring of Fire.  3. Direct the AFN Executive Committee to support the Matawa First Nations where requested and to provide a report ….”  Sourcealternate source (Google Docs)
  • I guess the July 18th meeting between Neskantaga First Nation and Northern Development and Mines Minister Rick Bartolucci didn’t go all that well….  “Neskantaga First Nation’s court battle to stop the Ring of Fire is ramping up, following the latest failed meeting between the First Nation and the Ontario government. Neskantaga Chief Peter Moonias and Chief Sonny Gagnon of Aroland First Nation called for a pause of the Ring of Fire during a meeting with Ontario’s mining minister Rick Bartolucci on July 18, but Moonias said the government did not take the suggestion “too seriously.” “The government is just going ahead with (with development) as if we’re nothing,” Moonias said. “It looks as if ‘yes’ has already been given from the First Nations, but we never did (give consent).” Moonias and Gagnon argue that development of the Ring of Fire needs to stop in order for First Nations to establish plans for maximizing economic benefits and mitigating environmental risks. A pause would also give First Nation communities time to get people trained to work in mining, the chiefs argued. According to Moonias, Bartolucci told the chiefs that work in the Ring of Fire has to happen at the same time as negotiations between Ontario and First Nations. “There’s a question of how can we negotiate this process of government to government round table while there’s still things going on in the Ring of Fire?” Moonias said. “There has to be a pause, otherwise mining will already be underway and then we’ll have lost.” Bartolucci invited Moonias and Gagnon to the meeting. Matawa’s Ring of Fire coordinator Raymond Ferris was also in attendance. Both Gagnon and Moonias took issue with the government’s approach to conducting consultation with individual communities in isolation of other First Nations. Gagnon called the current approach “a game to undermine cohesion between communities.” Moonias said the government is adopting a flawed approach when it comes to First Nations consultation. He wants to see First Nations creating their own models for how development and environmental monitoring happens, before meeting with the province to combine the provincial model with the First Nation model. Instead, Moonias said the government is appointing bureaucrats to create the processes, and then consulting First Nations afterwardsv ….” (Moonias) also called on other First Nations in the region and across the province and country to stand together on making Indigenous voices heard. “There has to be a joint effort, including the national assembly and the Chiefs of Ontario,” Moonias said. “It has to happen like that or else we’ll just be talking away while the government picks one or two communities to get them to say yes.”  Source
  • ….. with a view from a Greenpeace rep who claims to have sat in on the meeting:  “…. I recently had the privilege of attending a meeting with the Minister of Northern Development and Mines as an observer with Neskantaga First Nation …. Unfortunately, Greenpeace’s support or even such a unified First Nations voice does not translate into willingness on the part of the Ontario government to get it right in the Ring of Fire. At the meeting I attended, Minister of Northern Development and Mines Rick Bartolucci repeatedly insisted that the project must proceed despite First Nations’ very reasonable request for a pause to develop a process that respects their rights and gives them a real say in their future. At one point, his Deputy Minister even attempted to shut down any talk of First Nations rights, stating that this is a “separate conversation”! No, Deputy Minister, that is the conversation. The Minister seems to think that his government can make unilateral decisions impacting their territories and then undertake some consultations as an afterthought. You don’t consult after a decison has been announced – that’s bad faith …. “   Source (Greenpeace blog post)
  • (Not in the Ring of Fire, but) First Nation Worries about Ontario aerial surveys being the thin edge of the wedge  “Residents of Weenusk First Nation (on Hudson Bay) are fearing for the loss of their traditional lifestyles as Ontario gets set to release geological data on one of the province’s last pristine wildernesses. The Ontario Geologic Survey (OGS) conducted aerial geological surveying over a broad section of untouched wilderness along the shore of Hudson Bay between November 2011 and February 2012. Many people in Weenusk, a community of approximately 300, believe the release of the information will spur mineral exploration on much of the First Nation’s traditional territory, and in the process irrevocably alter a way of life that has been practiced since time immemorial. “We want to keep the land free,” says George Hunter, a community member and former chief of Weenusk. “To us, freedom doesn’t have staked claims. The moment you have staked claims and private property, our true freedom is compromised forever.” The information from the aerial surveying was supposed to be released to the public on June 5, until the First Nation found out about the survey and demanded that the release be postponed. Now the public release is scheduled for later this year, following a meeting and presentation by OGS in the community ….”  Source

More open source information (excerpts from information monitored 1-27 Jul 12 (PDF) here. All information shared here in accordance with the Fair Dealing provisions (§29) of the Copyright Act. The blog is not responsible for the accuracy of the source material, and inclusion of material doesn’t mean endorsement.

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