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Week In Review: A Mining & Exploration Retrospect (Nov 10-16)

|Includes: AUQ, BAJFF, Stornoway Diamond Cp (SWYDD)

Three dead in Mexican mining accidents

Three people died in two accidents at Canadian projects in Mexico this week. On Tuesday two contractors at AuRico Gold's (NYSE:AUQ) El Chanate open pit gold mine in Sonora state lost their lives "when a pressure vessel in one of the three separate ADR [adsorption, desorption and recovery] processing plants ruptured," the company stated.

President/CEO Scott Perry said the accident "is incredibly distressing as the safety of our employees and contractors is the company's highest priority and this incident is a tragic shock to everyone."

On Thursday a construction contractor died at Baja Mining's (OTCPK:BAJFF) Boleo project in Baja California. Baja holds a 49% interest in the project, with a Korean consortium holding the remainder.

Investigations are underway into both accidents.

Quebec's Plan Nord: Who pays how much?

That question was hotly debated in last summer's provincial election. The victorious Parti Quebecois argued that resource companies should pay significantly more for the huge infrastructure program that the previous Liberal government envisioned. But a Thursday announcement by Stornoway Diamond (OTC:SWYDD) suggests Quebec's minority government doesn't intend to stray far from its predecessor's plan-at least not for the time being.

Stornoway's framework agreement and letter of intent with the province sees the government building a 143-kilometre extension from Route 167 in Quebec's James Bay region. The company will use a government loan to build 97 kilometres of road from there to its Renard Diamond Project.

According to a Montreal Gazette article by Robert Gibbens, the deal differs little from a previous arrangement worked out with the previous government.

"Parti Quebecois Finance Minister Nicolas Manseau said the renegotiated road access pact will lead to $124 million of savings for Quebec taxpayers with Stornoway's takeover of the final 97 kilometres," Gibbens reported. "In fact, Stornoway is borrowing $77 million from the province to cover the single-lane road's cost, amortized over 15 years at 3.35% interest. Total cost will be comparable with the old pact when Stornoway would have contributed $44 million."

With its all-season road slated for completion in Q4 2013, the Route 167 extension would make Renard Canada's first road-accessible diamond mine. Mine construction is scheduled to begin next year.

Relative calm, but uncertainty prevails in South Africa.

The country's major mining strikes have ended, Reuters stated on Thursday. "Around 80,000 South African miners or 15% of the workforce had been off the job at one point," the news agency reported.

Doubt continues, however, regarding the viability of some mining operations. Additionally the National Union of Mineworkers, "which has delivered above-inflation wage hikes but contained militancy, has lost control over much of its rank and file, a source of concern to the ruling African National Congress and corporate bosses alike."

Kitco News provided another Friday recap of the major companies affected. Strike-related violence has killed over 50 people so far.

Court case, conflict allegations surround scheme to import Chinese miners.

Union and government lawyers squared off in a Vancouver court this week over an injunction to prevent HD Mining from exclusively using Chinese miners to staff its Murray River coal project in northeastern British Columbia.

Labour groups state that Chinese proponents didn't try to recruit Canadians, offered substandard wages, made Mandarin a job requirement and will overwhelm B.C. safety standards.

Federal lawyers took a truculent stance, appearing to contradict last week's federal government statement that suggested the work permits might be re-evaluated.

On Thursday Vancouver Province legislative correspondent Michael Smyth asked if the provincial government's support was explained by $20,810 donated by Chinese coal mining interests to the BC Liberal party. Referring to reports that HD Mining's Jody Shimkus had worked as an assistant deputy minister in B.C.'s Ministry of Natural Resources less than a year ago, Smyth wrote:

Under conflict-of-interest rules, senior managers face work restrictions for one year after they leave government. Senior managers can't take a job with a company they dealt with in government, and can't lobby or make representations on behalf of a company to the ministry where they formerly worked, the rules say.

"I never dealt with HD in government and I haven't lobbied for them," Shimkus told me Wednesday, though she also said she didn't know about the one-year work restrictions when she signed on as HD's vice-president of environmental and regulatory affairs. "I don't know what 'make representations' means,' she said. "All I've done is help them through the environmental permitting process."

B.C.'s conflict of interest commissioner and the B.C. Public Service Agency have recently faced unrelated controversies.

Federal lawyers argued that unions should have no standing in the case. Friday's Vancouver Province ran a Canadian Press story quoting one of them: "That would be turning the entire judicial review process on its head. Is the court to be used for fishing expeditions that go well beyond individual concerns?"

The judge's response, according to CP: "There's fish in the lake."

The case continues next week.

Lust for power checked by lust for…

Avarice-just pure avarice. That's all that characterizes the money-grubbing quest for gold. Nothing good ever comes of it.

Or does it? Writing in Taki's Magazine on Saturday, Robert Weissberg credits gold diggers of the metaphorical kind with saving the American republic.