Kitco MINING

While the electrification push is resulting in a ramp up of critical mineral production, Skarn Associates CEO Mark Fellows warned that to meet the rush, carbon intensity is rising at some mines. 

Skarn is a consultancy that helps miners quantify energy intensity, GHG emissions and water use across supply chains. Fellows spoke to Kitco Mining in early March at PDAC 2024 in Toronto, Canada. 

With electric vehicle demand jumping this decade due to shifting consumer preferences and government incentives, there's been a ‘gold rush’ in the critical mineral space. 

"There are some really substantial increases in production happening," said Fellows, adding that there's an inherent tension between production growth and the resulting higher carbon intensity.

Fellows noted the increased output of nickel in Southeast Asia, which is pushing the carbon intensity curve upwards. 

"In the case of nickel, the production growth over the last couple of years has been very strong in Indonesia, where Chinese companies have financed a whole load of pyrometallurgical ferro-nickel production capacity, all of it powered by coal-fired power stations," said Fellows. “All of that new capacity coming online in Indonesia has effectively pushed the curve upwards.”

Fellows noted that large, diversified miners in Australia are shuttering nickel mines. They are not able to charge a premium for cleaner nickel. 

"I'm sure the major diversified miners would love to establish a premium for green nickel, but
so far the market has not gone along with that," said Fellows. "The nickel market is in
many respects already dysfunctional, and it remains the case that low cost production wins out."

He also noted the long supply chains for hard rock lithium mines in Africa and North America. The material has to be shipped to China to be refined, which adds to lithium's carbon intensity. 

"There's a real danger that we will actually contribute to the problem rather than improve the situation," said Fellows. "It's fine to build an electric vehicle, but if the nickel or the graphite or the cobalt that's going into that battery is sourced from inherently high-carbon operations...it's not really a net gain. Low-cost production wins out."

Coverage is sponsored by UEC (Uranium Energy Corp.), URC (Uranium Royalty Corp.) and GoldMining. 

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Being regionally focused is what differentiates Agnico Eagle Mines (TSX:AEM) from some of its more globally minded peers, says President & CEO Ammar Al-Joundi.

In February Al-Joundi spoke to Kitco Mining at the BMO Global Metals, Mining & Critical Minerals Conference 2024 in Hollywood, Florida. 

He is the recipient of Kitco Mining’s 2023 CEO of the Year in the production category. 

Agnico Eagle ended 2023 with record production, cash flow and reserves. Asked why the company is delivering when others are not, Al-Joundi said: 

“I think one of the reasons Agnico has been consistent in delivery is because of our regional approach. While many of our peers who are very good… they are global miners, and they can go into difficult places and that's a tough business. But if you're Agnico and you've been in the Abitibi [greenstone belt] for example for 60-plus years, you know the ground better, you know the people better, you know the suppliers better, you know the contractors better, and that really allows us to have less volatility and more certainty when we're operating our business.” 

Agnico Eagle owns and operates Canadian Malartic in Quebec — Canada’s second-largest gold mine — as well as other mines in Canada, Australia, Finland and Mexico. Last year Agnico Eagle bought the 50 percent of Malartic owned by Yamana Gold, consolidating the mine into 100 percent ownership. 

Al-Joundi noted the Canadian Malartic Complex is transitioning from a 60,000 tonnes-per-day operation to 20,000 tpd, utilizing higher ore grades. This will free up about 40,000 tonnes per day of milling capacity. 

“It's an example of the potential we have to really leverage that investment,” he said, later explaining that one way to do that is to develop the Wasamac deposit — a small, high-grade project — without above-ground infrastructure. Rather than incurring the capital costs of building a mill and tailings facility, and having to arrange permitting, ore from Wasamac could be sent to Canadian Malartic for milling. 

“Not only is it a better return on capital, it's also better environmentally,” he said, not missing the chance to offer a sector critique: 

“That's one thing this industry needs to do better, is stop talking about more and more [production] and focus more on making money and return on capital.” 

Al-Joundi had an interesting answer to the question, what can gold stocks do to get out of their slump? Generalist fund investors told the CEO they are concerned about a market correction and are thinking about positioning themselves for when it happens. The investors said since 1925 there have been 15 market corrections, and in 13 of those corrections, when the general stock market index dropped 35 percent, gold rose an average 45 percent. 

“Not only in their view will gold go up, but gold equities as well will much outperform the
general index,” he said.

Coverage of the BMO Global Metals, Mining & Critical Minerals Conference sponsored by First Majestic Silver (NYSE:AG). 

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

The Séguéla mine in Côte d’Ivoire and the recently acquired Diamba Sud gold project in Senegal are “the two high-value opportunities,” says Jorge Ganoza, president & CEO of Fortuna Silver Mines (TSX:FVI).

In February Ganoza spoke to Kitco Mining at the 33rd BMO Global Metals, Mining & Critical Minerals Conference in Hollywood, Florida.

The Canadian-listed precious metals company has mines in Côte d’Ivoire, Burkina Faso, Mexico, Argentina and Peru. In 2021 Fortuna expanded from Latin America into West Africa. Production is split about 50-50 between the two regions, but Ganoza said the growth is in West Africa. 2024 guidance is nearly 500,000 gold-equivalent ounces.

Asked why Séguéla is the current flagship, Ganoza replied “meaningful production, low-cost, long life of reserves, and tremendous exploration upside.” He said the mine bettered second-half guidance and analyst expectations, delivering 78,000 ounces of gold.

Fortuna has faced labour unrest at its San Jose silver-gold mine in Mexico, and defended itself in court against the Mexican government over environmental authorizations. After this interview, Fortuna announced it would shut down San Jose six months earlier than expected due to rising costs and depleted reserves; it also booked a $90.6 million charge related to the anticipated closure.

Notwithstanding jurisdictional risks, Ganoza said, “what we have in Fortuna is a team of business executives — mining professionals that have built their careers in these regions, so we're comfortable playing in that field.”

At Diamba Sud in Senegal, Fortuna is budgeting $11 million for a 45,000-metre drill program in 2024. The aim is to push the historical resource past a million ounces, and to deliver a preliminary economic assessment (PEA) by the end of the year.

Ganoza noted that many miners have seen costs go up, but it is not just due to scarce equipment with higher price tags. Qualified people are hard to come by. 

"This industry has a lot of bottlenecks, and talent is certainly one of them," said Ganoza. "We are all under pressure. That's why we see blowouts on capital projects. The shortages are not just on equipment and tires. When the expansion comes, it is the talent."

Coverage of the BMO Global Metals, Mining & Critical Minerals Conference sponsored by First Majestic Silver (NYSE:AG).

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

A recent expansion study puts Blackwater in the top 10 gold projects by size, says Steven Dean, chairman & CEO of Artemis Gold (TSXV:ARTG).

In February Dean spoke to Kitco Mining at the BMO Global Metals, Mining & Critical Minerals Conference 2024 in Hollywood, Florida. 

Artemis acquired Blackwater from New Gold (TSX:NGD) in 2020 for CAD$190 million. The gold-silver project, located in central British Columbia 60 km from Prince George, is in the feasibility stage. It has 8 million ounces in gold reserves and 60Moz of silver reserves. 

The expansion study announced on Feb. 21 has Blackwater producing 500,000 gold-equivalent ounces over the first 10 years, at an all-in-sustaining cost of USD$712 per ounce. It is rare for a mine to produce gold for under $1,000/oz. 

“There are more or less a handful of mines in the world that produce more than half a million ounces a year in safe jurisdictions,” said Dean, adding “The Blackwater mine certainly on phase one is one of the lowest if not the lowest capital-intensity spends in our space right now.” 

Dean also pointed out that many Tier 1 assets held by the senior gold producers are old, meaning they are more difficult and more costly to operate. Open-pit mines that have been operating for a long time require more maintenance and have long haulage distances. Underground mines advanced in age must be dug deeper. 

“The only way to truly achieve a low-cost mine is to build a new one,” he said. 

Dean said Artemis Gold is targeting completion of the mine by the end of the second quarter, with commissioning slated for the summer. 

Coverage of the BMO Global Metals, Mining & Critical Minerals Conference sponsored by First Majestic Silver (NYSE:AG). 

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.