Amalgamation, acquisitions bring big news to Canada's uranium play
Friday's announcement from Clermont Capital Inc and NexGen Energy Ltd shows companies joining forces to pool money, projects and expertise in uranium exploration. Clermont announced a letter of intent to acquire NexGen in a three-cornered amalgamation in which a Clermont subsidiary amalgamates with NexGen to create a new Clermont subsidiary. The capital pool company intends the acquisition as a qualifying transaction to become a TSXV Tier-2 issuer.
Currently NexGen's key asset is the Radio uranium project in northern Saskatchewan's Athabasca Basin. NexGen holds an option to acquire an initial 70%, then the remaining 30% subject to a 2% NSR. Exploration has identified drill targets that are interpreted to be on the same structural trend as Rio Tinto's Roughrider deposits and Fission Energy's (FSSIF.PK) J-Zone. Roughrider holds resources of 17.2 million pounds U3O8 indicated and 40.7 million pounds inferred, while the J-Zone holds 7.37 million pounds indicated and 1.51 million pounds inferred. NexGen plans drilling in Q1 2013.
NexGen's wholly-owned Rook 1 property sits directly northeast of the near-surface Patterson Lake South uranium project, a JV of Fission and Alpha Minerals.
On November 15 NexGen announced a definitive agreement to purchase the majority of Mega Uranium's (OTCPK:MGAFF) Canadian projects in the Athabasca Basin and Nunavut's Thelon Basin. As a result, Mega is anticipated to acquire up to a 38% interest in NexGen.
Among the conditions for the Clermont-NexGen acquisition, NexGen would close a private placement of at least $6.6 million. Prior to closing the acquisition, Clermont would consolidate its shares on a 2.35-for-one basis. On closing, NexGen shareholders would receive one post-consolidation Clermont share for each NexGen share.
Speaking to ResourceClips Friday afternoon, Clermont president/CEO/director Arlen Hansen said, "It's a very large land package and uranium exploration takes a lot of time and money, so we're getting the NexGen operational team, which includes some ex-Rio Tinto guys and Leigh Curyer, who raised hundreds of millions of dollars for Southern Cross before it was taken out in the uranium sector as well.
"So there's good money and a good technical team coming behind the deal. And it's happening when the market's clearly hungry for a discovery. It sure looks like Fission and Alpha have something to be excited about. We hope that we can be part of that ride as well."
U3082014 apologizes. Now VMS goes after axeman#, tamerackerdown and nttg2005
VMS Ventures (OTC:VMSTF) greeted Friday by announcing progress in its battle against anonymous posters on the Stockhouse bullboard. Following what the company alleges to have been "false and malicious posts" between November 2, 2010 and May 10, 2012, VMS has now received court orders requiring internet service providers to identify three more commentators. The company had already obtained court orders requiring Stockhouse to divulge their internet protocol addresses. VMS said it "intends to pursue all legal options available against these posters in order to protect its reputation."
The company also announced a settlement with a poster identified as U3082014 regarding statements posted between April 15, 2011 and August 27, 2012. Details are confidential, apart from the apology U3082014 submitted to VMS' lawyers in September and posted on Wednesday.
Richmont closes Francoeur Mine, suspends Wasamac exploration
Francoeur had been struggling but, just the same, the news seemed sudden. Richmont Mines (NYSEMKT:RIC) announced Thursday the immediate shutdown of its 20-year-old gold mine in Quebec's Rouyn-Noranda region. President/CEO Paul Carmel blamed the decision on high costs due to "low realized grades, difficult mining conditions and a tight labour pool for the experienced miners required for the challenging mining conditions at Francoeur." As recently as November 8, however, Carmel sounded fairly optimistic as he spoke of "ramping up the Francoeur Mine to full production levels."
The company's pre-tax write-off will range between $11 million and $13 million. Immediate layoffs hit 115 workers, while another 35 will stay on for four months of decommissioning. Richmont is holding to its 2012 guidance of 65,000 ounces but 2013 is estimated between 65,000 and 70,000 ounces, down from a previous projection of 85,000 to 95,000 ounces. The company also operates the Beaufor Mine near Val d'Or, Quebec and the Island Gold Mine in northern Ontario.
Exploration at Richmont's Wasamac gold project near Rouyn-Noranda has been suspended until next year.
Malartic raid follows community dissension
Monday's Financial Post reported that community relations have hit a bad patch for Osisko Mining's (OSKFF.PK) Malartic gold mine near Val-d'Or, Quebec. The head of a citizens' committee that monitors the project quit, while another member said the rest were ready to leave, the newspaper stated, "to protest the alleged heavy-handedness of the company in their affairs." CEO Sean Roosen told the FP the events caught him completely by surprise.
The FP noted some background: "The company moved an entire section of homes to another part of town to make way for the project and negotiate with holdouts who refused to budge. A fire this year at the site shut down production for 10 days while activity was impacted again in October by a delay in executing a 940,000-tonne dynamite blast that limited access to higher-grade ore. The blast eventually occurred without major incident, but it proved to be a significant flashpoint for tension in the community of 3,600."
According to a 2011 Université du Quebec study, "roughly 60% of local residents have a positive opinion of the mine," the FP stated. "The company says it is confident the social licence is moving in the right direction. It set up the monitoring committee voluntarily and is not required by law to keep it."
But on Wednesday, in what might be a related incident, the mine was raided. Officials from the provincial environment ministry entered the site "to conduct a search. [They] requested and obtained documents relating to drilling, loading and blasting activities for certain dates between April 2011 and October 2012," Osisko stated.
Which way Quebec?
Monday's Financial Post also reported a twist to the controversy over Plan Nord, Quebec's on-again, off-again infrastructure program. During last summer's provincial election campaign the Parti Quebecois challengers criticized the Liberal government's plan, saying it was overly generous towards business. But on November 15, the first significant Plan Nord announcement since the PQ won the election suggested the new government was following the Liberal example, at least for the time being.
Now, according to the FP, the Liberal opposition says the new government is too generous. "This is a gift handed to a miner by eight million Quebecers," the FP quoted Liberal MNA Jean D'Amour. "It's indecent."
At issue is a $77-million government loan to Stornoway Diamond (OTCPK:SWYDF) to build a 97-kilometre road linking its Renard diamond project with the Route 167 Extension. At 3.35% interest amortized over 15 years, "the government is giving a company financing terms that are even better than those it enjoys itself," D'Amour said.
Nevertheless, Quebec companies seem wary. The FP also noted that "Quebec's Chambers of Commerce Federation says several companies have told its officials they are currently suspending new natural resource and mining investments in the province until the Parti Quebecois government finalizes a royalties regime and further clarifies exploration rules."
That could happen within a matter of months.
A battle for hearts, minds and resources
Afghanistan has mineral resources potentially worth an often-cited although somewhat apocryphal $1 trillion. But getting the stuff out of the ground is just a tad dangerous. Hence the country has yet to develop a major mining operation. Rocket attacks forced 170 Chinese workers to flee the country's biggest foreign investment project, the Aynak copper deposit. By Thursday, most had returned, Reuters stated.
With the government very anxious to see successful resource development, additional security was applied to the region, the news agency reported. Aynak's commercial production is scheduled by the end of 2014 and could bring nearly half a billion dollars' income a year.
Limited infrastructure and not-so-limited government corruption also plague industry, but security remains the top concern.
Mining Minister Wahidullah Shahrani told Reuters that mining could offset the Taliban's influence by providing jobs and basic services. "The Taliban have fired rockets at mining projects, planted improvised explosive devices along roads and arrived armed on motorcycles to threaten people," Reuters stated. As the news agency quoted Shahrani, however, "The Taliban are not strong enough to take control of a big mining area. But they will try to disturb the area. It has been happening for a while."
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.