Frik Els

Frik has worked as a financial journalist for 15 years covering a variety of industries for several business and consumer publications including British Airways in-flight magazine, Business Insider,,, YCharts and Business in Vancouver. Frik presented at the Global Mining Summit in Las Vegas, the Salt Lake City Mine Lifecycle Management conference and the Resources Investment Conference in Vancouver and has been interviewed on Korean state TV and CBC radio. (DISCLAIMER: Frik Els does not own shares or hold positions in any of the equities he writes about. Nothing written should be viewed as a solicitation to buy or sell any securities.)

Silvercorp 2011 losses hit 40% after stock plunges again

Shares in China-focused miner Silvercorp Metals slumped over 7% on Monday after British Columbia security regulators said they were joining the investigation into an anonymous letter accusing the company of a $1.3 billion fraud. Silvercorp was forced on Friday 2 September to make public the letter and at the same time disclosed that someone had built up a short position of 23 million shares – more than 13% of the number outstanding. The firm with projects in China and Canada plunged after the news broke and Monday's drop brings year to date losses close to 40% despite the firm's ongoing buyback programme.

BHP bypasses unions after 11 deals in 9 months are rejected

The Australian reports BHP Mitsubishi's decision to bypass a thoroughly resistant troika of unions by seeking a direct employee ballot on a new three-year enterprise agreement takes the world's number one miner into deeply uncharted industrial relations waters. The move comes after nine months of fruitless negotiations and 11 different offers – including annual pay rises of 5% and a $15,000 bonus – all of which were rejected by the unions which will now resume strikes. The six mines operated by BHP Mistubishi have a combined output capacity of more than 58 million tonnes per year of mostly metallurgical coal, representing about a fifth of annual global trade.

Gold tumbles as Greece says will run out of cash by October

Gold for December delivery – the most actively traded contract – fell 2.4%  or $45, to $1,815 an ounce on the Comex division of the New York Mercantile Exchange by lunchtime on Monday failing to capitalize on its safe-haven status as investors were forced to raise cash to cover losses on equity markets. The benchmark Dow Jones Industrial Average suffered another day of heavy selling, declining more than 120 points in volatile trade while European and Asian markets were battered after the deputy finance minister of Greece said the debt-laden country has cash to operate only until next month. Germany was readying measure to protect its banks against a Greek default while France's financial institutions were downgraded because of its exposure.

Stornoway adds to sparkle for investors

Stornoway Diamond Corporation involved in the discovery of over 200 kimberlites in seven Canadian diamond districts will join S&P/TSX SmallCap Index at the end of the week, a move which should increase the appeal of the counter among institutional investors. It's a new milestone for Stornoway which flourished under the leadership of Eira Thomas, the renowned diamond explorer whose spectacular success in the 90s transformed Canadian diamond mining. Thomas left in August following the acquisition of Stornoway's lead asset – the 100%-owned Renard Diamond Project – on track to become Quebec's first diamond mine.

Going cheap – Alaska mine worth $300 billion

Alaska's Pebble deposit presents big problems for Northern Dynasty, the junior Canadian miner that wants to cash out of its sole asset. Pebble has an eye-popping recoverable resource of 67 million ounces of gold and 55 billion pounds copper with some molybdenum thrown in for good measure which at today's prices is worth over $300 billion in total. The Vancouver company shares the venture with Anglo-American but the $4.7 billion development costs could be too rich even for the London-listed giant's blood. Apart from the problem of finding a heavyweight buyer for its 50%, Dynasty also faces opposition from a $150 million a year salmon fishery near the site and local environmental protesters who have enlisted the support of Hollywood celebrities like Robert Redford.

World scrambles for rare earths after latest China crackdown

Reuters reports prices of most rare earth elements – used in consumer electronics, defence and green energy industries – have risen since Wednesday after of local government crackdown on mining, with three major producers slated for closure. The news follows an announcement from the EU that it is building a stockpile of a variety of REEs and that a high-level meeting of officials from Europe, the US and Japan will take place in Washington early next month to discuss supply security. The price of some REEs such as samarium oxide used in jet fighter electrical systems has increased 25-fold in just three years.

Antwerp rocked by $1 billion diamond tax scandal

Authorities in Belgium are investigating a case that may turn out to be the country's largest ever fraud. De Tijd this week published some of the names from a list of 170 of Antwerp diamond traders who it claims are being investigated by authorities for spiriting almost $1 billion (€700 million) in unpaid taxes into secret Geneva bank accounts. Approximately 80% of the total world production of rough diamonds is traded by the 185 gem companies operating in Antwerp (pictured) and 50% of the globe's polished diamonds pass through the Flemish town. The Antwerp traders are among a much larger roster of at least 24,000 HSBC Private Bank clients from Canada, India and Germany under investigation by French authorities since 2009.

Australia coal miners caught in vicious carbon tax circle

Amid dire predictions about job losses and the drying up of investment in the sector due to a proposed carbon tax come more bad news for Australia's coal miners. Platts reports New South Wales plans to increase the royalties it receives from coal companies to offset some $400 million in extra costs to the state's coal-fired electricity generators due to the very same federal government carbon levy. Around 95% of NSW's royalty revenue comes from coal mines where rates currently top out at 8.2% of the value of production and is forecast to rise to $2.1 billion in the year ending June 2013 after the hikes come into effect.

Bulls regain footing as gold adds $50

The price of December gold added $52.50 or 2.9% to trade at $1,870.30 an ounce in afternoon dealings on Thursday regaining much of the ground lost since hitting an intraday record of $1,923.10 an ounce on Tuesday. During August the metal added 12% as investors sought a safe haven from the slumping US economy and the continuing debt crisis in Europe. The ECB on Thursday decided to keep interest rates at 1.5% and cut forecasts for growth in the euro area while in the US jobless claims came in worse than expected. Bullion was also boosted by comments from the US Federal Reserve chief Ben Bernanke who all but confirmed a new round of stimulus will be announced at a meeting later this month.

Silvercorp gains 10% turning tables on shorts

A day after reports that the Canadian federal police have joined the investigation into who may be behind an anonymous letter alleging fraud at Silvercorp Metals from an apparent short seller, shares in the company were racing ahead 10% in brisk noon trade on Thursday. Silvercorp was forced last week Friday to make public the letter and at the same time disclosed that someone had built up a short position of 23 million shares – more than 13% of the number outstanding. The firm with projects in China and Canada plunged 10% after the news broke, but is now up a net 8.7%, helped along the way by an influential investment site that in rather dramatic fashion asks whether Silvercorp is the "perfect stock."

Police join hunt for Silvercorp shortseller

Bloomberg reports Silvercorp Metals was contacted by a Canada police unit called the Integrated Market Enforcement Team on Wednesday offering to help find the person behind an anonymous letter alleging a “potential $1.3 billion accounting fraud” at the company. Silvercorp Metals was forced on Friday to make public the letter, also sent to the Ontario Securities Commission, presumably from a shorter of the company's stock as it was also disclosed at the time that someone had built up a short position of some 23 million shares over the preceding two months. The firm with projects in China and Canada plunged 10% after the news broke, but has since regained much of the lost ground.

Indonesia plans tax or quota on ore exports

Reuters reports Indonesia may impose a tax or quota on mineral ore exports ahead of a planned regulation to ban all exports of raw minerals by 2014, the industry ministry said on Wednesday. The planned ban is part of a mining and coal law introduced in 2009 that requires miners to process minerals into higher value products before exporting them. The move would negatively impact copper miners Newmont and Freeport as currently only 30% of output is processed domestically and comes on top of news that workers at Freeport's massive Grasberg mine in the Papua province plan a second strike next week after wages negotiations broke down.

Europe and China want to ape Australia carbon scheme

The Canberra Times reports Australia's proposed emissions trading scheme – which will evolve from the carbon tax being implemented next year – has won praise from Beijing, where it will be the model for one of six Chinese pilot programmes to be introduced in 2013. Earlier this week the EU also endorsed the controversial Australian plans and announced the start of talks for the eventual linkage of carbon trading by 2015. The carbon tax is vociferously opposed by Australia's coal export industry, the world's largest, which will be forced to pay a levy of $25 per metric tonne of carbon pollution next year.

Hot money sinks gold one day after all-time high

The price of December gold – the most actively traded contract – dropped by almost $80 to trade below $1,800 an ounce on Wednesday morning. By midday bullion had regained some of its footing but was still down just over 3% or $56.60, at 1,816/oz in New York as traders banked profits. Gold has declined $120 in less than 24 hours after setting an intraday record of $1,923.10 an ounce on Tuesday. During August the metal added 12% as investors sought a safe haven from the slumping US economy and the continuing debt crisis in Europe. Despite the losses many analysts believe gold will hit $2,000 an ounce soon as talk of another round of monetary stimulus or a direct injection into the economy as part of a jobs programme lead to more cheap money entering the financial markets.

Mining deals drop off a cliff in July and August as China retreats to sidelines

The deal-making frenzy in the global mining sector during the first half of the year was followed by a dramatic drop in activity in July and August, according to a new report by consultants PricewaterhouseCoopers. Figures from the report titled Riders on the Storm show that in July and August the value of global mining deals fell by 49% and deal volumes declined by 25%. The sharp reversal came after a record first half when 1,379 deals worth $71bn were announced even though Chinese entities, firmly focused on value, retreated from iconic western takeovers. Buyers were also willing to pay over the odds for large publicly listed targets – for $500 million+ acquisitions, the average premium was 37%. For sub-$500 million deals, premiums averaged a mere 8%.

New study says solar competitive with coal by 2013 in some countries

Based on a study looking at five major solar markets – Germany, Italy, France, Spain and Britain – the Brussels-based European Photovoltaic Industry Association, the biggest of its kind, said competitiveness with conventional forms of energy such as coal could be reached by 2020, but in certain markets it could take just two or three years. The report notes the output of producers more than doubled in 2010, reaching a world-wide production volume of 23.5 gigawatts of photovoltaic modules. This is a more than 500-fold growth since 1990 and the pace of growth is not expected to slow. Predictions are for investments in PV technology to double from €35-40 billion in 2010 to over €70 billion in 2015. Governments have also been cutting back on subsidies for the industry to ensure a speedier reduction in costs.

Latest weapon for oil sands pipeline backers – Oprah Winfrey, which stated goal is countering inaccurate and unfair criticisms of the oil sands, this week launched their first television ad as debate about the Keystone pipeline intended to carry Canadian crude to refineries on the US Gulf coast intensifies. The treatment of women in Saudi Arabia is the focus of the new ad running exclusively on the Oprah Winfrey Network in Canada and comes on the heels of demonstrations in front of the White House where celebrities had themselves arrested to persuade President Barack Obama, who has the final say, of oil sands' dangers and influential environmental voice Al Gore calling oil sands the "dirtiest fuel on the planet."

Mongolia primes $3 billion Tavan Tolgoi IPO for next year

Bloomberg reports Mongolia is likely to sell a stake in its Erdenes Tavan Tolgoi coal-mining company to the public next year, raising more than $3 billion. The Tavan Tolgoi deposit – mined since the 60s – in the South Gobi desert is the world's largest with a 6 billion tonne resource of high-quality coking coal used in steelmaking. Metallurgical coal has been trading at record levels of $330/tonne this year. Tavan Tolgoi is the second largest mining investment in Mongolia behind the Oyu Tolgoi gold-copper mine being built by Canada's Ivanhoe Mines.

Sea of red for uranium sector as price drops to Fukushima lows

With the spot price for uranium falling below $50 – levels last seen immediately after the nuclear accident at Fukushima – U3O8 producers and explorers dropped across the board on Tuesday. Not even Hathor Exploration, the subject of a hostile takeover by industry bellwether Cameco, managed to get into in positive territory and the sector as a whole has lost more than 40% its value since the 11 March earthquake off the coast of Japan. And the near term outlook for the sector is not rosy either with a new study by Resource Capital Research indicating market price expectations looking out 3 to 6 months points to further downside, with a spot price expectation of $45.95/lb.

Mexico passes Peru for gold medal in silver

MarketWatch reports Mexico has overtaken Peru as the world's top silver producer as output in the Andean nation has seen a sharp decline during the first six months of 2011. In the January-to-June period, Mexico turned out 1.88 million kilograms (60.4 million ounces), compared to 1.63 million kilograms in Peru, according to government figures.

China pours more money into Canada west coast oil sands pipeline

The Globe and Mail reports on Friday that MEG Energy, a small oil sands developer partly owned by China's CNOOC, has ponied up $100 million to join another Chinese state-owned firm Sinopec as financial backers of a planned pipeline from the oil sands to the northern British Columbia coast. Slowing demand in the US is adding pressure for a go-ahead on the Northern Gateway pipeline that will stretch for more than 1,100km at a cost of $5.5 billion affording Canada world prices for its oil, currently priced against heavily discounted US crude. Regulatory hearings are scheduled to start in January.

Big pay day for shortseller as investors jump Silvercorp ship

Silvercorp Metals was forced on Friday to react to an anonymous letter also sent to the Ontario Securities Commission, presumably from a shorter of the company's stock that alleges a “potential $1.3 billion accounting fraud” at the company. The firm with projects in China and Canada closed down just shy of 10% after five times the usual number of shares changed hands. It had lost as much as 14% of its value earlier in the day after the company also said someone had built up a short position of some 23 million shares over the last two months. The Vancouver company has 175 million shares outstanding and is worth $1.3 billion. Silvercorp is the latest in a string of Canadian companies with Chinese backing and operations being accused of fraud.

Gold surges after dismal jobs data – new all time high in sight

Gold for December delivery rose $50.10, or 2.7%, to $1,879.30 an ounce in midday trade in New York — within striking distance of the metal's $1,891.90 settlement record set a week and a half ago. The jump comes after data showed the US added no jobs in August sparking renewed fears that the world's biggest economy is heading back into recession. Gold benefited because the weak numbers could lead to new policy-easing initiatives by the US Federal Reserve – a previous round of stimulus injected $600 billion into markets. Not even talk of gold sales by European central banks to ease their massive debt burden could dampen the enthusiasm for bullion. Between them Portugal, Ireland, Italy, Greece and Spain hold some 3,233 tonnes of gold, worth around €130bn.

Miners pumping $82 billion into Australian economy – 70% more than last year

Beating already rosy expectations new Australian Bureau of Statistics figures show mining companies intend to invest $82.1 billion this financial year on new and expansion projects, representing 55% of total capital expenditure in the country's economy. The spending spree by the resources sector – mostly in Western Australia and Queensland – represents a whopping 70% increase over last year. Mining firms spent 14.4% more last quarter, led by a 22% jump in plant and machinery purchases, and projections show further increases in the future. The positive capex news, accompanied by robust retail spending numbers saw the Australian dollar rise above 107 US cents.

Last-ditch attempt to block start of only US nickel mine

The Columbus Republic reports opponents of a planned nickel and copper mine in Michigan's Upper Peninsula are asking a judge to put a state-issued permit for the project on hold ahead of initial blasting expected later this month. Four organizations have asked a judge to issue a stay while considering an appeal of the Department of Environmental Quality's 2007 decision to grant Kennecott Eagle Minerals, a subsidiary of Rio Tinto, a permit. Kennecott Eagle is targeting an underground ore deposit that would be the only US mine where nickel is the primary mineral generated instead of a byproduct. The mine could yield up to 300 million pounds of nickel and about 200 million pounds of copper.