Weekly Nugget

‘Revenge of the Miners,’ Friedland Declares Dawn of New Era for Mining

Legendary mining financier, Robert Friedland, speaking at British Columbia's Association for Mineral Exploration conference, outlined that a post Covid-19 economic recovery will begin “the era of the Revenge of the Miner.”

‘Revenge of the Miners,’ Friedland Declares Dawn of New Era for Mining

Legendary mining financier, Robert Friedland, speaking at British Columbia's Association for Mineral Exploration conference, outlined that a post Covid-19 economic recovery will begin “the era of the Revenge of the Miner.”

Friedland has long stated that copper is going to be needed in massive amounts to electrify greener industries, along with minerals such as nickel and cobalt. He further emphasized this point at the conference by stating that the timing could not be better for metals, especially with governments joining in with infrastructure investment aimed at improving the economic equality of their citizens.

He said that when global governments are focusing on infrastructure development, economic stimulus and a green new deal, “you have to call up Canadian miners.” Canadian provincial and federal governments appear to hear the call. 

Canada’s Natural Resources Minister Seamus O’Regan said his government is focusing on stimulus for resource industries with tax relief, a federal wage subsidy, extension of tax breaks for exploration and a $250-million investment in early stage companies.

“You are going to be able to find more (exploration) money in the next few years than you were able to in the past,” Friedland said, “and that’s good for all of us.”

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American Firm Offers Bid to Bring Lithium Refinement to North America

Evolution Metals, a Florida-based company with the backing of the US government and private investors, made a bid for North American Lithium’s “NAL” lithium and refining assets in Québec.

The US Department of Energy, along with the Department of Commerce and the Department of Defense, submitted a letter of interest for Evolution to acquire and enhance NAL’s assets for the purpose of developing a secure supply chain for lithium and rare earth elements in North America.

Currently, the majority of the world’s lithium goes to China for refinement into battery-ready material at state-owned refiners before it goes into the lithium batteries of electric vehicles and other battery technologies. 

Evolution plans to upgrade NAL’s refinery would produce battery-grade lithium in North America, resulting in a shorter supply chain for North American battery manufacturers. Under the terms of a Canada-US Joint Action Plan on Critical Minerals, products from this facility can be sold in the US as a domestic good.

In March 2018, China’s largest battery manufacturer, CATL bought 36.6 million shares of North American Lithium from the Chinese company Jilin Jien Nickel Industry, to make it a controlling shareholder with over 90 percent of the shares. The Quebec government-owned 5% share of the company at the time.

Australia’s Sayona Mining also submitted a bid for NAL’s assets with financial support from Piedmont Lithium.  

Originally discovered in 1942, the NAL’s mine once provided lithium to the US Atomic Agency in the 1950s.

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Miners Outlay 2021 Mexico Investment Budgets

Five companies have announced capex budgets for their Mexican assets recently which amount up to US$584 million, according to numbers compiled by BNamericas.

1. Torex Gold, 2021 Mexico budget: US$195-235 million

For 2021, Torex’s budget outlines US$125-150 million for non-sustaining capital, of which US$90-100 million is for the Media Luna project, including US$60-65 million for developing the Guajes tunnel and the South Portal.

Sustaining capex of US$70-85 million comprises US$40-45 million on capitalized waste, along with developing El Limon-Guajes underground, rebuilding the open pit fleet and efficiency improvements at the processing plant.

2. First Majestic Silver, 2021 Mexico budget: US$168 million

First Majestic’s 2021 budget focuses on expansion projects, totaling US$113 million with the remaining US$55.7mn earmarked for sustaining investments.A major portion of the budget is going to the Ermitaño project, which accounts for US$42.1 million for expansion. The company plans to begin limited mine production in the second half of 2021, followed by additional stope preparation and ramp up activities in early 2022.

The capex budget also includes US$27.6 million in exploration.

3. Pan American Silver, 2021 Mexico budget: US$103-114 million

The main target of Mexican capex spending is the La Colorada skarn project, where Pan American plans to invest US$50-55 million, with US$27.0-29.5 million at the La Colorada mine and US$26-30 million at the Dolores mine.

4. Argonaut Gold, 2021 Mexico budget: US$37-44 million

Argonaut’s 2021 Mexico spending is largely focused on sustaining capex and stripping at its El Castillo complex and La Colorada mines, with a US$3-4mn expansionary budget at the Cerro del Gallo project.

Original 2020 capital guidance included US$29-36mn at the mines, with US$11-14mn for expansion at Magino in Canada and Cerro del Gallo.

5. Fortuna Silver, 2021 Mexico budget: US$23.4 million

The company is planning on spending US$23.4 million at its San Jose Mine, including US$13.4 million for sustaining capital expenditures and US$10.0 million for brownfields exploration programs.

The budget allocates US$6.9 million to mine development, US$1.8 million for dry stack expansion, US$1.8 million equipment and infrastructure and US$0.9 million for infill drilling.

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