Weekly Nugget

Mining News Roundup, May 19 2021

In an analyst note sent to investors on Tuesday, May 18, JPMorgan hinted that institutional investors are going back to gold, as the price of Bitcoin has faced some setbacks.


JPMorgan Notes Bitcoin Exodus to Gold

In an analyst note sent to investors on Tuesday, May 18, JPMorgan hinted that institutional investors are going back to gold, as the price of Bitcoin has faced some setbacks.

JPMorgan said that, based on futures contracts, institutional investors could be moving away from bitcoin and to gold.

“The bitcoin flow picture continues to deteriorate and is pointing to continued retrenchment by institutional investors...Over the past month, bitcoin futures markets experienced their steepest and most sustained liquidation since the bitcoin ascent started last October.”

The bank in January predicted that bitcoin could become an alternative to gold, hitting $146,000 in the long term, but noted that this would be a “multi-year process.”

The slide on prices came on the back of a report from CNCB stating that bitcoin mining accounts for about 35.95 million tons of carbon dioxide emissions each year—about the same amount as New Zealand.

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Kyrgyzstan Seizes Canadian-Owned Gold Mine, Old Rivalries Rekindled

The Kyrgyz Republic has taken control of Centerra Gold’s (TSX: CG) Kumtor gold mine for three months effective immediately upon the claim that the company has abdicated "its fundamental duties of care."

The government plans to install its own selection of management at the mine. Centerra confirmed that the company is no longer in control of the mine and has restricted IT access to its global network from the mine site. 

The action comes shortly after the Canadian-listed miner started legal action against the government against a bill that threatened the takeover of the Kumtor mine in the event of the firm breaching environmental standards.

The new bill was viewed as a violation of previous agreements between the country and the company. 

Events continued to escalate, at the beginning of May, the company was fined $3.1B USD by a district court in Kyrgyzstan for allegedly violating the country’s environmental laws. The Kumtor mine supposedly violated environmental laws by storing waste rock on glaciers. The company dismissed the charges as “entirely meritless.” 

The fines and the takeover appear to come from Kyrgyzstan’s new president, Sadyr Japarov who has a long history with the mine.

In 2012, Japarov campaigned for the nationalisation of the gold mine, accusing Centerra of mismanagement, corruption and violations of environmental regulations, garnering the support of the country’s nationalists. That year, in a rally against the mine that turned violent, Japarov was arrested and imprisoned for three months.

In 2013, nationalists protesting against the Kumtor mine kidnapped the governor of the Issyk-Kul region, home to the mine. Japarov was implicated in the kidnapping and fled the country. When he attempted to return in 2017, he was arrested again and sentenced to 11.5 years in prison.

However, his supporters sprung him from the prison during a revolution last October which led to the resignation of former President Sooronbay Jeenbekov. Japarov replaced him, first on an interim basis and, since an election in January, as the country’s sitting president.

Earlier this year, Centerra had unveiled plans to invest $2B USD to extend the life of the mine by five years to 2031.Kumtor accounts for a fifth of the country’s total industrial output, and produced more than 13.2 million ounces of gold between 1997 and 2020.

The Kumtor Gold Mine is Kyrgyzstan’s biggest industrial enterprise, providing employment to approximately 4,000 people.

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Newmont Mining Scores #1 for Materials in ESG Index

Newmont Mining (TSX: NGT, NYSE: NEM) was ranked the number one company in the materials category, sixth overall, for the 3BL Media 100 Best Corporate Citizens ranking that looks at publicly-listed companies part of the Russell 1000 index. 

The 100 Best Corporate Citizens ranking began as a way to assess the largest publicly traded companies in the United States based on fundamental environmental, social and governance (ESG) transparency.

Since its launch in 1999, the ranking has become increasingly competitive as companies strengthen their ESG disclosures and elevate their performance.  The 2021 methodology considers 146 ESG factors across eight pillars: Climate Change; Employees; Environment; ESG Performance; Financial; Governance; Human Rights; Stakeholders and Society.

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RioTinto Stakes a Claim in Canada's Yukon

Rio Tinto (NYSE: RIO, LSE: RIO, ASX: RIO) is investing throughs its Canadian subsidiary $25.6M CDN for 8% of Western Copper and Gold (TSX: WRN, NYSE: WRN), which plans to develop the copper-gold Casino project in Canada’s Yukon.

In the deal, Rio Tinto Canada is acquiring 11.81 million shares at $2.17 CDN per share. If Rio Tinto wants to increase its stake to 12.5%, then it has the right to appoint a member to the board.  

Casino has a measured and indicated resources of 2.17 billion tonnes grading 0.16% copper, 0.18 gram gold per tonne, 0.017% molybdenum and 1.4 grams silver per tonne for 7.4 billion lb. copper, 12.7 million oz. gold, 812 million lb. molybdenum and 100.2 million oz. silver. Inferred resources add 1.43 billion tonnes grading 0.10% copper, 0.14 gram gold, 0.01% molybdenum and 1.2 grams silver for 3.2 billion lb. copper, 6.4 million oz. gold, 323 million lb. molybdenum and 54 million oz. of silver. 

The company plans to complete a feasibility study before the end of the year, and will release a preliminary economic assessment in the next six weeks. 

Western Copper and Gold’s CEO expects the economic studies will estimate a 50-year mine life based on measured and indicated resources and another 25 years from inferred resources. He also expects that capital costs will be ~$2.4B CDN estimated in a 2013 feasibility study.

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