Russian gold miner Polyus on Thursday provided an update on its Sukhoi Log project, one of the world's largest untapped gold deposits. Polyus is the 7th largest gold producer and this news continues to raise eyebrows as Russia continues to be a fervent purchaser of gold, and expressing interest in gold projects. Russia has increased their reserves dramatically along with China, as many see the two working together for an alternate system to what many see as a failing fiat system.
It is expected that 1.6 million ounces per year will be extracted at an extraction cost of $460 per ounce. As in most mining this is not a new discovery necessarily as it was discovered in 1961 by the Bodaybo expedition and extensively explored by Soviet geologists in the 1970 to the 1990's. Placer Dome, now Barrick had drilled extensively their in the late 1990's: about 320,000 meters. This data, coupled with current verification and amassed data suggest 2.0g/t over 58m.
What is of particular interest to me is reminding people that we face a similar scenario back home in Canada. The Golden Triangle has a rich history and enormous data with companies currently exploring, verifying and gathering data. I cover a number of companies you need to consider and research. Talk to your broker, or take some time to see if you want to shift into a sector that is primed to move forward ahead of the curve.
Brazilian mining giant Vale has confirmed that it will be making a major announcement regarding the Newfoundland/Labrador nickel/cobalt mine. It is thought that due to increased demand and price for cobalt the plan to expand the mine will move forward. Cobalt is extracted as a by product of nickel or copper mining and is essential in electric vehicles, mobile phones and other battery technology. What is interesting is that Vale has suspended the sale of another of its mines in New Caledonia in the South Pacific. It is not known if the two are correlated, or what this will mean for certain in regard to the mine; although, some expect that the expansion would mean the mine would extend until 2035.
Fortescue Metals Group CEO Elizabeth Gaines stated that this major iron ore producer would be looking for new mines, and new metals. This is an interesting indicator for me as she lists gold, copper, and lithium as new targets. This shift is not lack of focus, quite the opposite it merely illustrates the demand for metals required for the future. For those that may not know copper and lithium is notably used in the electric vehicle market and in batteries for energy storage. Gold is still arguably the foundation of economy but also used in electronics. This diversification does not show any weakness in the iron market, quite the opposite I believe it shows that Gaines acknowledges the need and demand for copper and lithium. She has further added that the company will focus on South America, namely Ecuador and Argentina. Where is the demand: China.
If you want to feel uneasy, look at that fact. Apple is one of the companies that takes part in aggressive stock buyback programs. These programs are good tools to use but are a double edge sword. Money ultimately should be piled into your business to create product and growth, to invest in new technology not in financial engineering. I am not interested right now in why Apple does this because I would not buy the service they provide, nor the phone and for that reason i would not want the stock. The fact that it has such an effect in the S&P should also be worrying anyone that believes we have free and open markets. There are deep and disturbing questions we have to start asking about how those who run our markets are moving them. Make no mistake it is not you or I. We do not move these markets in any way. In fact, most retail investors, almost 90% are in passively invested funds. We have given up responsibility for our financial future to global hedge funds and market funds. Now this is not an Apple bashing piece. I prefer other companies but quite frankly I will keep my phone for years - i am not a good consumer and do not buy into the silly upgrades that nearly no one uses to an advantage. I am not even that upset about there manufactured/planned obsolescence program that derails battery power over time. I have always suspected that most products are carefully engineered to fail; to have a specific, short lifespan. This was once thought as cynical conspiracy theory, but we see it as fact, with Apple admitting this program. It would not take much effort to see this in a long list of other companies. What it does show is an overwhelming sense of cynicism in the whole system. We see it socially and politically. The people being ignored in so many countries. People need to look at what they own as a portfolio. They need to start asking some questions and maybe if you are a person in charge of your own destiny start reading some reports on new markets that have are ahead of the curve. Green technology, battery power, energy storage, materials that make stronger alloys all of these can be found in mining. There is a surge happening in this sector and not enough people are telling you about it. It is fascinating what is being accomplished and it takes little to start to push these companies into the spotlight that are helping to craft an incredible future.
Now typically not a lot of people get excited about an iron ore project, even if it is an astounding $1.3 billion project. What is important is that this reflects the current demand in China for high quality ore for construction. As I talked about before there is a spike in vanadium demand, which works as an alloy to make rebar and other materials incredibly strong. This demand by China is creating a demand for resources that are not being met. Gold, copper, lithium, cobalt and iron are all needed for the One Belt One Road Initiative in China, as well as the faltering infrastructure in the US.
The other interesting part of this story is the implementation of technology with mining. Fortescue Metals will be using autonomous driving trucks at the site.
The Lucky Strike 156sqkm Property lies 30 kilometres northwest of Goldcorp’s Coffee Creek deposit and 15 kilometres east of White Gold Corp.’s Golden Saddle deposit. The recent permit obtained from the Yukon government will kick off the most extensive diamond drilling by GSR. The data from last year has provided the key targets for the drilling while further trenching and IP (Induced Polarization) will continue along the Monte Carlo Zone. This is going to be a big summer for GSR as it has previously announced it will spin-out this Luckstrike property with this linked drilling strategy. The other major property called Plateau is being drilled with strategic partner Newmont Mining.
There are many minerals that people will not recognise on this list but some that are getting more traction in the news. Many of us forget how critical mining is for the future. Almost everything we use is because of mining from the infrastructure we need to the computers, gadgets and transportation we rely on. Some of the obvious ones are lithium and cobalt while others like vanadium, which I just wrote about and will have more on quite soon is a mystery to many. In all, there are many minerals on the list which the US has little control over. It highlights why Apple is able to buy cobalt directly from a mine; or why Softbank is investing in mines with the right to purchase 20% of its production or how vanadium is mainly under Chinese control. My message has always been that now is the time to take back control of our destiny. Buy commodities, resources that are required for the future. Buy the companies mining for these necessary materials or producing them and help feed the engineers, and scientists that are creating marvels.
Japanese hedge fund Soft Bank has entered the lithium market buying up to 9.9% of Canada's Nemaska Lithium and investing up to $78m through a private placement as part of the agreement. What is interesting is that in the agreement Softbank will be permitted to purchase up to 20% of the lithium from Nemaska. If you recall a few months ago Apple was bypassing markets and buying cobalt directly from mines. This looks like another similar strategy. To me this is a clear signal that smart money is purchasing resources, commodities and envisioning a future of stored energy in batteries. This is remarkable news for the industry and should stir people to consider what there money is invested in, and what they are exposed to.
In an enormous $4.07 billion deal, China’s Tianqi Lithium is buying a 24% stake in Chilean producer SQM from Canada’s Nutrien. This expands the Asian nation’s increasing hold over the market for the key component needed in the making of batteries that power electric vehicles. Do you think it is time to start investing in your own country? Canada is largely a resource based country, with mining being one of the strongest sector. This sector has been in a slump for years playing out is cycle. That tide is turning and money is coming home. Are you investing in green technology, future energy and infrastructure growth?
As talked about in some reports there is a desire to focus money back in North America in exploration because of the issues arising from dealing with third world countries. Bloomberg cites this new political change in approach is one of negating contracts, and simply having government 'renegotiate' different terms. Holding up permits, 'revising mining codes' and other strategies apparently allow these jurisdictions to stop previous agreed upon terms in favor of a better deal. Of course, this can happen but it sends a loud and clear message. You can explore here but if you find something we will renegotiate.