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From Bear-Market Bootstrapping to High-Potential Nevada Play

Source: James Kwantes for Streetwise Reports   01/25/2021

James Kwantes of Resource Opportunities profiles Ridgeline Minerals, an explorer that is advancing several properties in Nevada.Nevada’s silver-laden history branded it "The Silver…

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This article was originally published by The Gold Report

Source: James Kwantes for Streetwise Reports   01/25/2021

James Kwantes of Resource Opportunities profiles Ridgeline Minerals, an explorer that is advancing several properties in Nevada.

Nevada’s silver-laden history branded it “The Silver State” but the present is paved with gold. The more valuable precious metal is Nevada’s top export, worth US$2.7 billion in 2019 (casino games is a distant second at $550 million).

Since the 1962 discovery of Carlin-type gold by John Livermore and Alan Coope, more gold has been discovered in Nevada than almost anywhere on Earth. Gold ore is blasted and trucked out of giant open-pit deposits like the Goldstrike pit in the Carlin trend. It’s dug out from high-grade operations deep underground in the Carlin and Battle Mountain-Eureka trends and the Cortez camp. Gold also bleeds out of dozens of oxide heap-leach projects that dot the state.

Nevada’s importance came into sharp focus two years ago when Barrick and Newmont—the world’s two largest gold miners—combined their operations in the state to form Nevada Gold Mines (NGM). That deal was struck only after Barrick CEO Mark Bristow launched a hostile bid for Newmont, backing off when Newmont agreed to form the Nevada joint venture. Barrick is the operator and owns 61.5% of Nevada Gold Mines, which produced 2.13 million ounces of gold in 2020. It’s an important profit center for both companies.

FROM PRAIRIES TO PREMIER

Gold is also what brought geologist Chad Peters from Manitoba to Nevada, where he lives with his wife, Carla, and their two young sons. Peters is president and CEO of Ridgeline Minerals Corp. (RDG:TSX.V; RDGMF:OTCQB), which IPO’d last year and drilled two of its four exploration projects in Nevada’s most important gold districts. If junior miners are lottery tickets, Ridgeline is more like a handful of them—each project could be worth multiples of the company’s current enterprise value of $13.8 million.

Ridgeline is planning follow-up drill programs in 2021, with a focus on expanding its high-grade oxide-silver-gold discovery at Selena in the South Carlin trend, and Swift in the Cortez district. The goal at the latter is to identify a high-grade multi-million-ounce gold deposit. But Ridgeline’s most valuable projects could still end up being the two that are under the radar for now: Carlin-East and Bell Creek. Those properties are in the heart of the Carlin trend, near Goldstrike, and Nevada Gold Mines has been hitting world-class intercepts on the doorstep. More on those later.

Ewan Downie’s Premier Gold (PG-T) plays a primary role in the story of how Peters ended up in Nevada. While studying geology at the University of Manitoba, Peters landed a summer job with Premier Gold working in Ontario’s Red Lake gold camp. That gig turned into a 10-year career with the company, much of it in Nevada. Premier Gold made its first foray into the state in 2012 with the purchase of the mothballed Cove mine project in the Battle Mountain-Eureka trend. Peters and his wife, Carla, moved down to Winnemucca, Nevada, the same year.

At 27, Peters was the senior exploration geologist in charge at McCoy-Cove, where he led the discovery of the CSD Gap deposit. Cove now hosts 1.7 million ounces of gold at 10.8 g/t and is one of Nevada’s highest-grade undeveloped gold deposits. It’s also one of the cornerstone assets of i-80 Gold Corp., the Nevada-focused spinout that will emerge from the friendly acquisition of Premier Gold by Equinox Gold (EQX-T), announced December 16. The CSD Gap discovery was based on a new geological interpretation, an MO that Peters is now employing with Ridgeline.

Peters rounded out his time with Premier as the Nevada exploration manager, overseeing all of the exploration projects as well as Premier’s JVs with majors—including the South Arturo mine with Barrick. As the company advanced its portfolio in Ontario, Nevada and Mexico, Premier’s focus shifted from exploration to development and production. Exploration is Peters’ passion and he decided to strike out on his own in 2018, co-founding private exploreco Ridgeline Minerals with good friend Steve Nielsen, who also happened to own a drilling company. That wasn’t a coincidence…

BOOTSTRAPPING IN A BEAR MARKET

“It was the best of times, it was the worst of times.” The Charles Dickens quote from A Tale of Two Cities could also apply to Ridgeline’s early days. Peters left a well-paying job with a solid employer and took the plunge, starting Ridgeline out of an “office” in the garage of his Winnemucca home. Local relationships that he built living in Nevada helped Peters secure the company’s land package through EMX Royalty Corp. (EMX-V)—now one of the largest held by a junior in the state with three of the four projects literally at Nevada Gold Mines’ doorstep.

Next, Peters partnered with Neilsen, a Nevada businessman who owns Envirotech Drilling and had worked with Chad at the Cove discovery. The two struck an equity deal that gives Ridgeline the cheapest drilling costs of any company in Nevada. That means more dollars into the ground, increasing the odds of new discoveries. This partnership is already paying dividends with a shallow-oxide silver discovery announced at Selena months after the IPO.

The launch forced a new skill set on a guy more accustomed to navigating rock types than capital markets: raising money for a private exploreco during the depths of a bear market. It was a rather grueling experience that tested his mettle and made for some interesting dinnertime conversations, Peters recalls: “I told Carla it would take me three to six months to get the company financed, and she ended up supporting the family for 14 months.” Private financing rounds at 12 and 22 cents with Ridgeline’s core shareholders funded early exploration, with the Peters family putting in $150,000 of their savings.

Peters tapped Mike Harp, an exploration geologist with eight years of experience with Gold Standard Ventures in the Carlin trend, as Ridgeline’s VP Exploration. Harp was a senior member of the team that found 5 million ounces for Gold Standard in the Railroad-Pinion district, including leading discovery of the North Dark Star deposit. Duane Lo, a veteran of the mining exploration sector, came on early as CFO and splits his time between Ridgeline and Entree Resources. At the board level, Peters brought in Newmont’s longtime Nevada specialist Lewis Teal, who has decades of discoveries under his belt and has authored multiple publications on the Carlin trend.

Relationships are one of the keys to Peters’ success and it shows in Ridgeline’s share registry. Early shareholders include heavyweights of the junior mining scene, such as David Elliott, Paul Stephens and Andre Gaumond. Peters remains on good terms with Premier boss Ewan Downie, who invested in Ridgeline while the company was still private. He has shareholders on both sides of the recent Premier-Equinox deal—the Equinox management team also put money into Ridgeline’s IPO and Equinox CFO Peter Hardie joined Ridgeline’s board in October 2020. “The Davids” from EMX—CEO David Cole and chief geologist David Johnson—both invested in Ridgeline personally before it was publicly listed.

Three years after that bumpy launch, Ridgeline sports a $17.3-million market capitalization, with $3.5 million in the treasury to drill four high-potential projects in Nevada’s most important gold districts. As it turned out, the early adversity Peters faced running a private exploreco was good preparation for going public.

The Ridgeline chart has been a roller-coaster since the August 2020 IPO at 45 cents that raised $5 million. The stock promptly ran up to 75 cents before a long slow slide—some investors bailed when there were no immediate discoveries—took shares down to lows of 30 cents in December. “Discoveries aren’t made overnight,” Peters remarks. “At Selena it took us three phases of drilling and 21 holes to make a discovery.”

In this emerging gold bull market, Nevada is again a hotbed of gold and silver exploration, with hundreds of juniors searching for economic deposits across the state. Many of those projects are far removed from the main Carlin/Cortez/Battle Mountain-Eureka trends, a gold epicenter that hosts a combined 220 million ounces of past production and current resources. Ridgeline is well-positioned with 125 square kilometers of ground in the middle of all three districts.

ONE IS NOT LIKE THE OTHERS

Having a Canadian CEO who lives in Nevada sets Ridgeline apart in a state crowded with junior miners whose bosses live elsewhere. His northern roots also landed Peters, now 34, an unexpected side gig—he was recruited to coach his son’s hockey team after other parents discovered he was Canadian.

Those “boots on the ground” put Peters at the center of the action, allowing him to hear of new discoveries first or soak up important tidbits of intel. It has even opened doors to acquiring cheap but valuable data, or claims from the prospectors who still control large land positions on Nevada’s still-fractured claims map. Peters lives less than a two-hour drive from Ridgeline’s Swift, Carlin-East and Bell Creek projects and five hours from Selena.

It’s not Ridgeline’s only key edge. That strategic drilling contract has allowed the company to stretch those dollars and drill 1,300 meters at Carlin-East in 2019, a combined 5,636 meters at Selena and Swift last year, and still enter 2021 with a healthy treasury of $3.5 million to drill all four projects. As a 7.8% shareholder, Peters is incentivized to make sure those dollars go as far as possible. Management owns a combined 17% of shares and public companies—EMX, Vior and Ethos Gold—own another 19%. Institutions are at 12%.

HIGH-GRADE SILVER AT SELENA

At Selena, Ridgeline went looking for gold but found silver—wide intervals of oxide high-grade silver, along with lower-grade gold. The company hit paydirt with hole 21, which intersected 36.6 meters grading 67.08 g/t silver and 0.26 g/t gold (90.05 g/t silver-equivalent “AgEq”). The discovery followed two earlier programs that had encountered promising hits, including 3m of 823.5 g/t AgEq and 36.5m of 77.8 g/t AgEq.

Mineralization outcrops at surface and has good continuity, extending for more than a kilometer down-dip and along strike. “We are drilling wide-spaced step-out scout holes and they keep hitting,” Peters says.

On a gram-meter basis, Selena results compare favorably to other high-grade silver explorecos, including in Nevada, that have market capitalizations much higher than Ridgeline’s. Selena’s grades are also multiples of those at Coeur Mining’s Rochester open-pit mine in Pershing County, Nevada—America’s largest silver mine. Rochester’s proven and probable reserves average about 11.3 g/t silver and 0.085 g/t gold. Coeur is in the initial stages of building a major expansion of the mine.

Peters and Harp recently managed to acquire the historical drill-hole database for Selena from the 1980s. That data, combined with the new discovery, will help the team design the next drill program, which could launch in April if the weather cooperates. Early metallurgical testwork shows the silver and gold oxide mineralization is amenable to heap-leaching. It remains early days but Selena is shaping up to be a classic Nevada heap-leachable oxide deposit.

HUNTING A GIANT AT SWIFT

If Selena is a base hit in baseball terms, think of Swift as a home-run swing. It’s a Carlin-type gold project about 7 kilometers northwest of Nevada Gold Mines’ Cortez mine complex, which hosts about 35 million ounces at 3.08 g/t gold. The neighborhood hosts large, high-grade Tier 1 deposits, which is what Ridgeline is looking for. Only five deep drill holes have ever tested the Lower Plate target rocks on the 50-square-kilometer property.

A three-hole, 2,413-meter drill program completed late last year hit widespread skarn alteration within favorable host rocks and produced some sniffs of low-grade gold and high-grade silver mineralization, including 0.2 meters grading 0.22 g/t Au and 860 g/t Ag. It’s an indication that Ridgeline drilled into the guts of the intrusive heat source—the largest Carlin-type gold deposits are associated with buried intrusives, Peters says. “If you’re too close, the gold won’t precipitate out. We now know where we are in the system, and we know where we’re going next.”

Two of the three deep holes intersected the favorable Wenban formation. It sounds like something out of a Star Wars movie, but Wenban is considered the primary host rock for much of the gold in Nevada’s Cortez trend, including 15 million ounces in NGM’s Goldrush deposit. Data from the Phase 1 drilling will help Ridgeline vector in on higher-grade gold mineralization in the Phase 2 program.

CARLIN-EAST/BELL CREEK CATALYSTS: LOCATION, LOCATION, LOCATION

Barrick CEO Mark Bristow has identified Nevada as “one of our main hunting grounds” and Barrick’s moves at the Fourmile discovery show those weren’t idle words. The company has rapidly advanced Fourmile—north of Goldrush—since announcing a maiden Inferred resource of 700,000 ounces of gold grading 18.58 g/t (Fourmile is outside the NGM joint venture).

In resource exploration as in real estate, it’s all about “location, location, location.” And Barrick has been aggressively exploring on the doorstep of both Carlin-East and Bell Creek. Last year NGM intercepted 21.3 meters grading 35.3 g/t gold at its North Leeville target, north of the Leeville underground gold mine. That’s just 3 kilometers away from Ridgeline’s Carlin-East boundary, along the Leeville structural corridor.

Barrick-controlled NGM is also exploring aggressively just to the west of Ridgeline’s Bell Creek project. Assays are pending on a deep hole NGM drilled at its Sinkhole Breccia target just 250 meters to the west of Bell Creek. It’s valuable land—a 2020 Laurentian Bank analyst report onEly Gold Royalties (ELY-V) assigns a US$41-million valuation to Ely’s REN royalties, which lie directly adjacent to Ridgeline’s 100% owned Bell Creek property, on the west.

Peters plans to drill both Carlin-East and Bell Creek but will watch Barrick’s next moves in the neighborhood and proceed accordingly, while Ridgeline builds ounces at Selena and drills for a high-grade gold discovery at Swift.

Ridgeline Minerals (RDG-V, RDGMF-OTC)
Price: 0.36
Shares out: 48.1 million (58.5M fully diluted)
Market cap: $17.3 million

James Kwantes is the editor of Resource Opportunities, a subscriber supported junior mining investment publication. Kwantes has two decades of journalism experience and was the mining reporter at Vancouver Sun, the city’s paper of record.

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Disclosure: James Kwantes was compensated for the writing and distribution of this article. Kwantes owns shares of Ridgeline Minerals, purchased in the 22-cent financing round, the 45-cent IPO and the public market. This article is for information purposes and should not be considered investment advice. All investors need to perform their own due diligence.

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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of EMX Royalty, Ely Gold Royalties and Equinox Gold, companies mentioned in this article.

Resource Opportunities Disclaimer: Readers are advised that this article is solely for information purposes. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice. The information is based on sources which the publisher believes to be reliable, but is not guaranteed to be accurate, and does not purport to be a complete statement or summary of the available data.

( Companies Mentioned: RDG:TSX.V; RDGMF:OTCQB,
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Economics

Investing Legend Turns Apocalyptic, Expects Stocks To Crater 50% In Largest Wealth Destruction In US History

With stocks again swooning on fears Fed support of gradually fading, it didn’t take long for the 83-year-old Grantham to publish his most apocalyptic note yet…

Investing Legend Turns Apocalyptic, Expects Stocks To Crater 50% In Largest Wealth Destruction In US History

It was several years ago when Jeremy Grantham quietly turned from stock bull to vocal permabear, and while his market notes turned breathlessly alarmist (if only to those who were long his multi-billion fund GMO), such as this from June 2020 “Stock-market legend who called 3 financial bubbles says this one is the ‘Real McCoy,’ this is ‘crazy stuff’”, it wasn’t until early 2021 that Grantham’s warnings of an imminent crash became especially shrill… and spectacularly wrong. Recall, back in January 2021, Grantham wrote that “Bursting Of This “Great, Epic Bubble” Will Be “Most Important Investing Event Of Your Lives“, while was followed by warnings of a “Spectacular” Crash In “The Next Few Months.”

Needless to say, no crash followed as the Fed and other central banks went all in on stabilizing the market, resulting in an epic year for risk assets which closed 2021 at all time highs, while GMO suffered not only steep losses but also substantial redemptions, a humiliating outcome for Grantham who had previously called the bursting of both the dot com and housing bubbles, but failed to account for just how determined the Fed is to avoid another bubble bursting.

But with stocks again swooning on fears Fed support of gradually fading, it didn’t take long for the 83-year-old Grantham to publish his most apocalyptic note yet, “Let The Wild Rumpus Begin” out this morning, in which he revisits the familiar them that we are currently living in a superbubble – only the fourth of the past century – and like the crash of 1929, the dot-com bust of 2000 and the financial crisis of 2008, Grantham is “nearly certain” the bursting of this bubble has begun, sending indexes back to statistical norms and possibly further.

How much lower? The iconic value manager sees the S&P tumbling by nearly 50% to 2,500 from its all time highs of 4,800 just a few weeks ago. The Nasdaq Composite, which closed in a technical correction on Wednesday down 10% from its all time high, may sustain an even bigger correction.

“I wasn’t quite as certain about this bubble a year ago as I had been about the tech bubble of 2000, or as I had been in Japan, or as I had been in the housing bubble of 2007,” Grantham told Bloomberg in a “Front Row” interview. “I felt highly likely, but perhaps not nearly certain. Today, I feel it is just about nearly certain.”

The signs that Grantham has been looking at are hardly a secret: the first indication that the bursting of the superbubble has begun came last February, when dozens of the most speculative stocks began falling. One proxy, Cathie Wood’s ARK Innovation ETF, has since tumbled by 52%. Next, the Russell 2000, an index of mid-cap equities that typically outperforms in a bull market, trailed the S&P 500 in 2021. Indeed, many of the bubble baskets which are a proxy of central bank liquidity, have been sharply lower for the past year with a handful of exceptions.

Grantham also points to the kind of “crazy investor behavior” indicative of a late-stage bubble: meme stocks, a buying frenzy in electric-vehicle names, the rise of nonsensical cryptocurrencies such a dogecoin and multimillion-dollar prices for non-fungible tokens, or NFTs. However, while it has certainly become more subdued, as the following chart of single stock option activity from Goldman shows, retail is still solidly in the market.

“This checklist for a super-bubble running through its phases is now complete and the wild rumpus can begin at any time,” Grantham, writes adding that “when pessimism returns to markets, we face the largest potential markdown of perceived wealth in U.S. history

To be sure, Grantham admits that he may not have timed the top perfectly, but says it’s only a matter of time before the bubble bursts. In the meantime, we are living in the “vampire phase of the bull market” which will survive for a while but eventually it “keels over and dies. The sooner the better for everyone”, to wit:

… we are in what I think of as the vampire phase of the bull market, where you throw everything you have at it: you stab it with Covid, you shoot it with the end of QE and the promise of higher rates, and you poison it with unexpected inflation – which has always killed P/E ratios before, but quite uniquely, not this time yet – and still the creature flies. (Just as it staggered through the second half of 2007 as its mortgage and other financial wounds increased one by one.) Until, just as you’re beginning to think the thing is completely immortal, it finally, and perhaps a little anticlimactically, keels over and dies. The sooner the better for everyone.

Sparing no superlatives to describe what is coming, Grantham said the coming crash could rival the impact of the dual collapse of Japanese stocks and real estate in the late 1980s, with catastrophic consequences.

Not only are equities in a super-bubble, according to Grantham there’s also a bubble in bonds, “the broadest and most extreme” bubble ever in global real estate and an “incipient bubble” in commodity prices. Even without a full reversion back to statistical trends, he calculates that losses in the U.S. alone may reach $35 trillion.

While Grantham is one of the iconic (and last remaining) value managers who’s been investing for 50 years and calling bubbles for almost as long, Bloomberg’s Erik Shatzker writes that he knows his predictions are fodder for skeptics. One obvious question: How could the S&P 500 advance 26.9% in 2021 — its seventh-best performance in 50 years — if stocks were poised to plummet, especially when Grantham was warning of an epic crash last January?

Rather than disprove his thesis, Grantham said the strength in blue-chip stocks at a time of weakness in speculative bets only reinforces it: “This has been exactly how the great bubbles have broken,” he said. “In 1929, the flakes were down for the year before the market broke, they were down 30%. The year before they’d been up 85%, they had crushed the market.” In other words, Grantham is pointing to the same lack of market breadth that prompted even Goldman to ring the alarm last month, when the bank pointed out that 51% of all market gains since April are from just 5 stocks..

Having seen the same pattern that played out in every past super-bubble is what gives him so much confidence in predicting this one will implode similarly.

Echoing what we have said since 2009, when the view was largely contrarian and has since become consensus, Grantham puts the blame for bubbles of the past 25 years on bad monetary policy. Ever since Alan Greenspan was Fed chairman, he argues, the central bank has “aided and abetted” the formation of successive bubbles by first making money too cheap and then rushing to bail out markets when corrections followed.

Now, Grantham warns, investors may no longer be able to count on that implied put. He says that with inflation running at the fastest clip in four decades “limits” the Fed’s ability to stimulate the economy by cutting rates or buying assets,..

“They will try, they will have some effect,” he added. “There is some element of the put left. It is just heavily compromised.”

Under these conditions, the traditional 60/40 portfolio of stocks offset by bonds offers so little protection it’s “absolutely useless,” Grantham said. He advises selling U.S. equities in favor of stocks trading at cheaper valuations in Japan and emerging markets, owning resources for inflation protection, holding some gold and silver, and raising cash to deploy when prices are once again attractive.

“Everything has consequences and the consequences this time may or may not include some intractable inflation” Grantham writes. “But it has already definitely included the most dangerous breadth of asset overpricing in financial history.”

Here, we disagree: yes, there will be a crash, one which will send deflationary shockwaves around the world, but it will only prompt an even bigger rescue by the same Fed which no longer has an alternative after it crossed the Rubicon in 2020 and bought corporate bonds and junk bond ETFs to avoid an all out collapse in the post-covid turmoil. In the next crash the Fed, whose only contribution over the past 100 years has been to make the rich richer and create an epic “wealth effect” bubble, will buy stocks and ETFs, transforming into the Bank of Japan, before eventually it loses all credibility. But by then, stocks will be orders of multiple higher, completely disconnected from reality and fundamentals and trading only on the quadrillions in liquidity central banks inject to preserve the western way of life.

Incidentally, the question of what happens after the next crash is one that was posed just yesterday by another market bear, Stifel strategist Barry Bannister, who predicts a market drop to 4,200 in Q1 2022, but wonders what happens post-correction, when he writes that “equities risk the third bubble in 100 years if the Fed loses its nerve and cancels much of the tightening plan. We doubt that occurs anytime soon, because we believe bubbles are exceptionally poor policy, and the prior two equity bubble tops (1929 and 2000) were followed by “lost decades.”

We do not doubt it at all, and are absolutely certain that the Fed – which has no choice but to blow an even bigger bubble after the coming market crash – will do just that.

The only question we have is how much of a crash can the Fed weather before it capitulates, i.e., what is the level of the Fed put. We are confident that another 10-20% lower – which will obliterate Biden’s ratings and Republican avalanche in the miderms, surging inflation notwithstanding – and the market will finally discover what it is looking for.

Grantham’s full note is below (pdf link).

 

 

Tyler Durden Thu, 01/20/2022 – 15:05

Author: Tyler Durden

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Precious Metals

A Greener Trend for Mining

An increasing level of stakeholder pressure has pushed the mining industry to re-think its approaches to environmental, social and governance responsibilities.
Australian…

An increasing level of stakeholder pressure has pushed the mining industry to re-think its approaches to environmental, social and governance responsibilities. Australian Mining speaks with some of the companies and organisations leading the transformation. 

The mining industry is a critical component to a decarbonised world. 

For it to remain essential, companies must adhere to external pressures to cut emissions and go beyond their responsibilities as corporate citizens.

A larger supply of critical minerals for net zero technologies will be needed for electric vehicles (EV), wind farm and solar power technologies if countries are to reach their emissions reduction targets.

Commodities including copper, nickel and rare earth elements will be important to this transformation, but growing stakeholder pressure means mining companies are needing to show a stronger commitment towards environmental, social and governance (ESG) requirements to retain offtake partners and supply chain stability.

ESG standards for mining include energy efficiency, emissions reduction and water efficiency, along with improved worker safety and community relations. 

Stronger ESG standards are also making their mark on other major commodities in Australia, including iron ore and gold, two of the key resources exported from Australia. 

Ernst & Young’s (EY’s) report, Top 10 Business Risks and Opportunities for mining and metals in 2022, reveals environmental and social risks will be the most significant factor for the industry to consider over the next year. 

The report surveyed 200 global mining executives that gave their insights into the risks and opportunities for the industry in the year ahead. 

“Investor and community relations have really changed,” EY global mining and metals leader Paul Mitchell says. “If you went back in time, community relations were down the flagpole and now it’s a factor that boards and CEOs ask questions about, and the importance of that role has increased.”

While the risks are present, there is value to be had by mining companies if they appease ESG demands.

Mining companies including BHP, Fortescue Metals Group and Rio Tinto have also partnered with organisations, including the Cooperative Research Centre for Transformations in Mining Economies (CRC TiME), to drive sustainable change in the industry.

CRC TiME has more than 70 industry partners across the mining and METS (mining equipment, technology and service) sectors, regional development organisations, community and first nations groups, state and federal governments and research partners, all looking to address complex challenges across mine closure and rehabilitation, which are essential aspects to ESG.

The organisation was founded through the Australian Government’s Cooperative Research Centre program in 2020 to improve trust between mining companies, regulators and communities. 

This is being delivered through four research programs that cover regional economic development, risk evaluation and planning, operational solutions and data integration, forecasting and scale. 

CRC TiME associate professor Bryan Maybee is part of the risk, evaluation and planning program, bringing experience in minerals and energy economics from Curtin University. 

Maybee says there is a strong value incentive for mining companies to get their rehabilitation measures completed correctly. 

“Responsible closure is one of the key factors that is used to measure ESG outcomes,” he says. “Instead of looking at a five-year or a 10-year mine life, we actually have to start looking at much longer timeframes, taking into account the life after the mine and think about the future economic use for the land.” 

Without a social licence to operate, mining companies may be at risk of being unable to develop new mining operations across global jurisdictions. 

If a mining company has an effective mine closure plan, government and community groups are more likely to accept a new development.

The risk, evaluation and planning program will aim to gel operational activity with mine closure planning, which requires changes to decision making in response to uncertainty. 

This involves advanced evaluation frameworks for assets, real-time predictive models and planning tools to identify risks. 

In June, CRC TiME initiated a study in collaboration with Fortescue, the University of Western Australia and Curtin University, which focusses on increasing plant nutrients in iron ore waste at Fortescue’s Chichester Hub operation in Western Australia.

The move towards “green” iron ore, which is mined using zero emissions is also a factor that Australia’s largest miners are having to consider.

“People want to know where everything has come from, so it is important to be able to show iron ore is mined in a responsible way,” Maybee says. “Green iron ore for example is becoming an important consideration in retaining customers for your product.

“Being a good corporate citizen being responsible as far as ESG goes, we actually have the opportunity to operate more sustainably.

“An operator that closes their mine responsibly and relinquishes it will build confidence with regulators.”

According to Maybee, stronger environmental outcomes can reduce community unrest related to an operation and therefore boost employee sentiment. 

“By operating in an ESG responsible manner and embedding those factors into the way that we operate you actually can reduce risk, which means smoother, more productive and efficient operations,” Maybee says. 

EY’s top 10 risks and opportunities for 2022. Source: Ernst & Young.

 

Solving the ESG puzzle 

There are several innovative ways that mining companies can boost their ESG compliance outside of progressive mine closures. 

Advancements in Industry 4.0 technologies have delivered real-time and predictive capabilities across the entire mining operation. 

Envirosuite global head, mining and industrial, Matt Scholl says environmental solutions offer more than just compliance for mine sites.

“Any mining company that treats environmental management as a compliance issue only, will be outcompeted by the wave of progressive miners who are already using environmental intelligence to optimise their operations,” Scholl says. 

Envirosuite recognises the importance of environmental management to ESG requirements for mine sites and has developed its environmental intelligence platform, which can optimise plans for weather risks and maintain compliance while reaching specific production goals. 

Environmental intelligence uses data, artificial intelligence and other digital technologies alongside environmental and sustainability research to prevent any environmental impacts. 

For example, the threat of changing weather patterns on an open pit mine could cause an unexpected shutdown. Envirosuite’s platform allows mine sites to develop an awareness of these risks before they occur. 

“ESG performance covers a range of areas, however, a key pillar of ESG centres on environmental management,” Scholl says. 

“ESG ratings are high-level indicators of whether companies have good measures in place to manage these risks. 

“Envirosuite provides real-time and predictive capabilities to help mining companies manage environmental risks while enabling them to optimise production.”

SRK Consulting offers specialised services for the mining industry, including environment, community and mine closure services and water management.

The company was founded in 1974 and has grown to work on more than 20,000 projects worldwide.

SRK also uses data analysis to determine strategies for mining companies to comply with regulations and address environmental and social challenges for a more effective mining operation. 

According to SRK principal consultant (geochemistry) Claire Linklater, stakeholder expectations for ESG requirements are growing. 

“I think those topics are much higher on the social and political agenda and the regulators are starting to become much more informed in these areas,” Linklater says. 

“The people that are financing mining projects pay much more attention to the ESG implications of what’s going on. 

“Poor ESG management can cause mining companies reputational damage on the global stage and might actually impact finance for another project elsewhere. 

“This is especially true of companies operating across multiple jurisdictions and continents.”

SRK can assess environmental risks in the early stages of a mining development to mitigate risks of poor environmental outcomes. 

For example, identification of problematic waste rock volumes during exploration opens up the opportunity to either avoid mining those volumes, or develop waste rock dump designs to control the potential for impacts on water quality once a mine site is up and running. 

By mitigating environmental risks before they occur, mine sites can save costly retrograde solutions down the line and prevent poor ESG ratings from stakeholder groups. 

Stakeholders are painting a clear picture of where mining company ESG requirements need to be to receive support for new developments. 

Through collaboration and the adoption of innovative ESG services, the mining industry will be able to move forward to deliver positive outcomes that are well-received by these groups.  

Australian Mining.


Author: Emily Murphy

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Precious Metals

Oil Prices Ease, Gold May Have Room to Run

How long until oil bulls jump back in? Oil prices are slipping more than 1% at the end of the week, pulling back a little further from the highs just short…

How long until oil bulls jump back in?

Oil prices are slipping more than 1% at the end of the week, pulling back a little further from the highs just short of $90. The decline came shortly after the EIA inventory data on Thursday, which showed a surprising rise against expectations of a 2.1 million barrel decline. The White House also looking to apply further pressure in response to higher prices may be contributing to the pullback, although as we’ve seen before, their power appears quite limited.

Obviously, that’s no game-changer but it came at a good time when crude was running into resistance at USD 90 and losing momentum. It’s a big psychological barrier as once that goes, people are just counting down the days until we have triple-figure oil. It’s a big deal, but one we’ll have to wait a little longer for. The question is how long until traders jump back in. Given the fundamentals, I don’t think we’ll be waiting too long.

Can gold propel higher after the breakout?

Gold is marginally lower on Friday but finding support around USD 1,830 where it experienced significant resistance in recent weeks. The break above this level was big for the yellow metal and could propel it higher in the coming weeks. That starts though with holding above USD 1,830, as confirmation of the breakout will be a big confidence boost for gold bulls.

The move suggests gold is once again playing the role of the inflation hedge and a safe haven in these unstable markets. A lot of tightening is priced into the markets but inflation is running hot and there doesn’t appear to be much confidence that it will be enough. It’s no wonder there’s so much anxiety out there.

gold
inflation
markets

Author: Craig Erlam

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