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, Investment.com, Driving.ca, 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.)

Memories of Great Recession fading as diamonds fetch record prices

Two reports this week suggest that fears of a prolonged period of global economic austerity following the financial crisis have been overblown. In Hong Kong Christie's experienced its best ever auction with buyers spending $469m on wines, antiques, art and particularly jewellery. At $9,342,219, the pictured pair of Golconda diamond ear pendants – dubbed the Imperial Cushions – set an all time record price per carat. At the other end of the scale prices have also been rising at a rapid rate. Demand for one carat and smaller stones from India and China pushed the International Diamond Exchange's polished diamond index to a new record in May surpassing the previous record level achieved in the pre-recession summer of 2008 and up 12.5% so far this year.

Newcomer Karnalyte sees potential for 6m tons of potash a year

Mining Weekly Online quotes Karnalyte Resources CEO Robin Phinney as saying that its Wynyard project in Saskatchewan has enough resources to eventually produce 6m tons of potash a year and that the company is considering bringing in joint venture partners to do so. Karnalyte initially expects to ramp up production by 500,000 tons per year to reach 2m tons by 2016/2017 at a cost of $1.5bn. The company on Friday was trading at $11, up 42% since it debut on the TSX mid-December last year.

Sabina shares jump on $100m Nunavut deal with Xstrata

Canada's Sabina Gold & Silver Corp said on Thursday it would sell its Hackett River property and certain claims on the Wishbone Greenstone Belt in Nunavut, Canada to Xstrata Zinc Canada for C$50m in cash and a silver production royalty, lifting its shares almost 5% in early Toronto trade. In addition Xstrata has agreed to incur not less than $50m on exploration and other expenditures on the properties over a four year period. The transaction could take up to six months to complete and will position Sabina as purely a precious metal player.

Iamgold ups Merrex stake to 14% as Mali project gears up

Merrex Gold announced on Thursday a private placement worth $1.75m with Iamgold, its earn-in partner on the Siribaya Gold Project in Mali, which is potentially a 5m ounce deposit. Merrex's agreement with Iamgold will see the company take a 50% stake in Siribaya with Iamgold spending $10.5m on exploration over four years. In a note to investors Merrex said that spending on the 800 square km Mali project which kicked off in 2005, is being accelerated.

Laricina to raise up to $400m in private placement, pushing out IPO

Laricina Energy announced on Wednesday it intends to raise between $250m and $400m by selling common shares at $40 to $45 each in a private placement. Laricina was started by executives of Deer Creek Energy after it was sold to French oil giant Total in 2005 for $1.67bn. Canada Pension Plan acquired 17% of the privately-held oil sands developer for $250m last year. This round of fund raising is expected to push back a possible public listing of Laricina to 2012.

Goldcorp named to Nasdaq global sustainability index

Canadian mining giant Goldcorp Inc. has been recognized by Nasdaq as one of the Top 100 companies in the world for its sustainability practices. The Index is an equity-weighed index made up of 100 companies that lead in measuring and reporting their carbon footprint, energy usage, water consumption, hazardous and non-hazardous waste generation, workforce initiatives and community investment.

Analysts see potash prices rising throughout 2011

Two separate Wall Street reports gave fertilizer producers a boost on Tuesday. Investment bank Citigroup upgraded its recommendations for the two top producers Mosaic and Potash Corp. of Saskatchewan to buy citing strong global agricultural fundamentals and reduced Chinese exports. In a separate opinion Barron's magazine over the weekend said Mosaic's stock is worth a look as potash prices are predicted to rise throughout the year thanks to depleted inventories and consolidation among Russian producers.

Rare earths a magnet for investors again

This is what happens when you corner a market the way China has done with rare earth elements: Statistics collected in Hong Kong show exports of rare earth metals have shrunk by half over the past year. Over the same period, the value of these exports jumped 10-fold. It’s hard to argue with these kinds of numbers. After the stocks prices of the few big players pulled back from recent highs investors saw it not as evidence of sobriety returning to the market, but simply as a buying opportunity.

Canadian companies dominate global oil and liquids reserves rankings

Daily Oil Bulletin reports Canada's total proved oil and liquids reserves continued to climb in 2010, rising to just under 22bn barrels, up 6.6% from year end 2009. About 77% of the booked reserves came from Alberta's oil sands. The news comes as Canada’s oil sands are coming under increased scrutiny: the Vancouver Sun reported on Monday that the federal government deliberately excluded data indicating a 20% increase in annual pollution from the oil sands industry in a report to the UN. Last week during Congressional hearings it was revealed that the oils sands are poised to become the number one source of crude for the US.

Copper miners must tap new areas as demand soars Chile study shows

The global copper-mining industry needs to expand to new regions if producers are to bring supply back into line with unprecedented demand, according to a mining- studies group in Chile, the world’s largest producer. So far, the industry’s reaction to record prices has been slow because of declining ore grades, the need for deeper mines and higher costs, Juan Carlos Guajardo, executive director of the Center for Copper & Mining Studies, said. Copper futures in London surged to an all-time high in February.

China National Gold seeks Africa investment, president says

Bloomberg reports that China National Gold Group Corp., the state-owned company that controls the nation’s largest gold deposits, wants to invest in projects in Africa as it expects bullion to trade near record levels for the next three years. Gold jumped to a record $1,577.57 an ounce this month, helping make this year among the busiest for gold deals since 2006. Citic Group, China’s biggest state-owned investment company, and partners agreed this month to buy Gold One International for about $469m to gain assets in South Africa.

Leviev sells Angola diamond mine stake for reported $380m profit

Real estate magnate Lev Leviev has sold his 18% stake in Angola's Catoca diamond mine to China's Sonangol International for $400 million, Russia's "Kommersant" newspaper reports. Leviev acquired the stake in the Angola mine in the 1990s for $20m. Russia's state owned diamond producer Alrosa holds 32.8% of Catoca. Last week Alrosa provided a rare glimpse into its finances and operations ahead of a possible public offering. The state-owned company supplies about a quarter of the world’s diamonds and in 2010 produced more of the precious stones than De Beers, historically the dominant miner and marketer of the gems.

Construction starts on world’s biggest biomass power station as scores of coal-fired plants face shutdown

Engineering work has begun at a coal-fired power station on the banks of the Thames in England, UK that could turn it into the world's largest biomass plant with almost no carbon emissions. The owner of the Tilbury power station, previously scheduled for shut down in 2015 under new EU environmental regulations, says it hopes to produce up to 750 megawatts of green power by winter. Last week it was reported that the approval of new rules for air pollution, water pollution, and waste disposal in the US could result in the retirement of between 35 and 70 gigawatts (GW) of coal-fired power generation throughout that country.

Tata buys into US potash firm amid India's dispute with producers

In a filing to the Bombay Stock Exchange on Friday, Tata Chemicals said that its subsidiary Valley Holdings has bought a 32.9% stake in EPM Mining Ventures, which is the process of developing a potash prospect in Sevier Lake, Utah. According to the Financial Post talks between India and producers at the International Fertilizer Industry Association's annual conference in Montreal broke down on Friday. At some 7m tonnes/year India is the second largest importer of potash in the world and is asking for a 10% discount on the current price of $500/tonne.

The Province: bureaucrats say $5.5bn pipeline to BC coast not needed

According to the report in the newspaper senior bureaucrats have told the federal government that the controversial pipeline that would stretch for 1,170km from Brudenheim in Alberta to a new marine terminal at Kitimat in northern British Columbia, offers export capacity that the industry does not need. Last week Stephen Wuori, Enbridge’s president for Liquids Pipelines, vigorously defended the project saying that given that currently 99% of Canada’s $50bn/year exports went to the US, the industry needs to diversify and supply the energy-hungry economies of the Pacific Rim.

Bad day for platinum: Tsunami to trigger 8-fold jump in surplus, world no. 2 halts expansion

BusinessDay reports on Friday the global platinum surplus may jump eightfold to as much as five tons after Japan’s worst earthquake slashed car production, reducing the country’s demand for the metal used in cars’ emission systems to the lowest level in 28 years. Earlier Mining Weekly reported that world number two platinum producer Impala Platinum has shelved plans to increase production at its underperforming 73%-owned Marula mine leading to lay-offs at the company’s largest development project in South Africa.

Shareholders ask for disclosure on ExxonMobil's oil sands investments

Green Century Capital Management filed a shareholder resolution with ExxonMobil to disclose information about its investments in Canadian oil sands, Triple Pundit reported on Thursday. By the end of last year, ExxonMobil’s total proved reserves in the oil sands were over 2.78bn barrels — just over 11% of the company’s total proved reserves, according to a press release by Green Century. Canada’s oil sands which is expected to become the primary source of crude to the US have attracted intense scrutiny in recent days as the US Congress heard submissions about the extension of the Keystone XL pipeline from Alberta to Texas.

Alrosa’s annual production tops De Beers again, reveals world’s largest diamond reserves

The secretive Russian diamond giant Alrosa on Thursday provided a rare glimpse into its finances and operations ahead of a possible public offering. The state-owned company supplies about a quarter of the world’s diamonds and in 2010 produced more of the precious stones than De Beers, historically the dominant miner and marketer of the gems. Alrosa's president Fyodor Andreyev said an internal audit showed its diamond reserves at 1.28bn carats, making the company the world's biggest holder: “At current extraction rates, the company's reserves will last more than 40 years.”

With slim pickings elsewhere bankers start targeting mines

All the money sloshing around in the financial system has to be poured into something. The latest study of mergers and acquisitions in the resource sector show that two of the four biggest deals of 2011 worth over $3bn are financial companies taking over natural resource companies, not strategic investments by other miners. Lower down the scales – deals worth $50m or more – financial investors are also finding ways in. In 2009 only 3.6% of transaction involved investment houses and corporate takeover artists. By the first quarter of 2011 that figure had jumped to 16.1%.

Resourcehouse’s fourth crack at Hong Kong listing delayed as commodity prices slump

Hot on the heels of a lacklustre listing by Swiss commodities and mining behemoth Glencore, news comes of another multi-billion dollar natural resources IPO going awry. Resourcehouse planned to raise $3.6bn on the Hong Kong market on Thursday but has now postponed the listing to at least the end of the month. The Australian iron ore and coal miner has made three previous attempts to go public in 2009 and 2010.

Standard & Poor's upgrades Potash Corp., sees strong demand for fertilizer

World number one fertilizer company Potash Corp, received a fillip from S&P on Wednesday after the ratings agency upped the company’s rating to stable from negative and reaffirmed its investment grade corporate credit rating of A-. S&P believes Potash Corp. will benefit from strong fundamentals in the potash business and from the fact that its mines are considered low cost and have long reserve lives. Potash Corp, worth some $46bn on the stock market, has attracted renewed interest from investors on the back of rising global food prices, record earnings at the company, and after a hostile takeover bid was scuppered by the Canadian federal government in November last year.

Total CEO: oil sands key factor in global crude price, plans no further Canadian acquisitions

According to The Globe & Mail, Christophe de Margerie, the CEO of French energy giant Total on a tour of Canada’s oil sands with members of the company’s international advisory board this week, believes the resource is playing an increasingly important role in setting the global price of crude. Through a string of deals, kicked off by the $1.67bn acquisition of Deer Creek in 2005 and topped by the $1.7bn partnership with Suncor announced late last year, Total has become one of the largest oil sands players. The company plans to spend $20bn in the oil sands by 2020, but no further acquisition are planned reports the Calgary Herald.

Oil sands poised to become largest source of US crude imports

According to testimony before the US Congress concerning the construction of the $7bn Keystone XL pipeline extension from Alberta to Texas, crude produced by Canada’s oil sands, which represent just over half the country’s total production, has already surpassed the total volume of imports from the US number two supplier Mexico. Since 2000 Canada’s oil sands output has more than doubled: from 600,000 barrels to about 1.5m barrels per day in 2010. Canada supplies 2m barrels per day or 22% of US crude oil imports, up from 15% a decade earlier. The sands’ 175bn barrels of recoverable oil places Canadian oil reserves third in the world behind Saudi Arabia and Venezuela.

Klondike Silver to raise up to $1m in private placement

Klondike Silver Corp. announced on Tuesday it has arranged for a private placement of up to 4,000,000 units for total proceeds of up to $1,000,000. Proceeds from the private placement will be used for exploration expenditures on the Company’s Yukon, British Columbia and Ontario mineral properties as well as for general working capital. Klondike Silver is a member of the Hughes Exploration Group of Companies.

Chile to halt financing of military spending with copper exports

The Santiago Times reported that Sebastián Pinera, president of Chile, signed a bill which if approved by Congress, would eliminate a substantial source of revenue for Chile’s armed forces and at the same time relieve a massive burden on the country’s state mining company. Under current legislation dating back to the Second World War, 10% of revenues from Chile’s National Copper Corporation, Codelco, are directed to the nation’s armed forces. Codelco is the world’s largest copper mining company and accounts for some 11% of global copper production, but the tax has contributed to years of underinvestment and the prospect of falling output at the miner just as copper prices hit record highs.