Miners in Burkina Faso Locking Down Operations

Conditions in gold-rich Burkina Faso have continued to deteriorate in 2019, with increased militant activities in areas near mine sites.

Unrest in the gold-rich African nation of Burkina Faso is increasing, with the Islamic State (IS) now claiming responsibility for the death of a Canadian miner while the central government has ordered artisanal mining in the east of the country to halt as it carries out military operations.

A local arm of IS has declared that it is responsible for the death of Canadian miner Kirk Woodman in January, saying in propaganda circulated last week that “the kidnapping and killing of a Canadian crusader” has interested western powers in the terrorist group’s activities in Burkina Faso.

Artisanal mining operations in the Est Region, on the border of Niger, were ordered to shut temporarily on March 27 — something that could cause problems for foreign explorers.

Chris W.J. Roberts, a political science instructor at the University of Calgary and president of African Access Consulting, told the Investing News Network (INN) that he understands that there is “a significant military operation planned for the area” that is likely still underway.

The Est Region and other border areas of Burkina Faso have seen increased violence recently, with Jihadists and government forces clashing, and civilians more often than not getting caught in the conflict.

Woodman, who was vice president of exploration at Vancouver-based Progress Minerals, was found dead on January 16 after he was kidnapped from a mining site in Northeastern Burkina Faso.

Woodman’s company had been working with Australian explorer Predictive Discovery (ASX:PDI), which has projects throughout West Africa.

Because of Woodman’s death and IS’ claim of responsibility, Roberts said, “I would be surprised to hear if any formal exploration projects are continuing in the region.”

Roberts had previously described Canada as “the leading source of mining exploration and production capital” in the African country, which is experiencing deteriorating security conditions. Burkina Faso, a gold hotspot, is also host to multiple other foreign operators throughout the country.

Charles Dumbrille, chief risk officer at Canadian risk consultancy In-D-Tel International, told INN that the mining industry tends to keep its head down. “[Companies] are busy looking at the deposit and not at the risks aboveground,” he said.

This means that, with the increased attention being paid to the dangers present in Burkina Faso, more explorers and operators are looking to lock down their operations.

“I think people are keeping a closer eye on their security procedures [and] implementing, hopefully, the proper security needed for protecting their assets and their employees — most importantly, their employees,” Dumbrille continued.

“Some [operators] I’ve come across, they’ve stopped operations or they’re using different modes of transportation. Rather than driving across a region to get to their site, they’re flying in.”

Security offsite is becoming a more prescient concern for foreign nationals too, with militant and Jihadist activity not confined to the regions but occurring in the capital of Ougadougou as well.

Concerns raised by operators now include where employees and contractors are staying as they pass through cities, said Dumbrille.

“Are they staying in a high profile western hotel that has security? Or are you going another route of trying to be under the radar, and have your own housing for employees, whether it’s a villa or apartment?”

When asked about whether investment could flee Burkina Faso given the situation, Dumbrille said, “It could go either way.” According to him, the situation now depends on how involved the French military becomes in the country, because “[Burkina Faso] can’t manage it themselves.”

One company with exploration assets within the Est Region, Teranga Gold (TSX:TGZ,OTCQX:TGCDF), told INN that it has priorities in Burkina Faso other than its Gourma project, where it said it is “not currently carrying out any activities.”

Teranga’s prioritized projects — the under-construction Wahgnion mine and the Golden Hill development project — are both on the other side of the country.

Predictive Discovery, with which Woodman’s company was working in Burkina Faso, had not yet responded by time of publication, although in late January it reported that activities were yet to recommence at the joint venture site due to the incident that led to Woodman’s death.

While the government order last week specified artisanal miners, producing mines appear to be maintaining operations without disruption.

Canadian miner SEMAFO (TSX:SMF,OTC Pink:SEMFF) told INN that its 204,000 ounce per year Boungou gold mine has not been affected by government operations.

“It is very much business as usual for our Boungou Mine,” said a company spokesman.

SEMAFO is a company that is carrying out what Dumbrille described and flying in workers.

In 2018, the company was forced to increase security at and between its operations because of Jihadist activities near its mines — and in the Est Region — requiring non-local workers to be transported by helicopter between the capital city and its operations. Work was not impacted by the increased security.

Another large miner with mining activities untouched by the unrest, IAMGOLD (TSX:IMG,NYSE:IAG) operates the 405,000 ounce per year Essakane gold mine in the northeast of Burkina Faso, well within the conflict zone of the Sahel Region to the north of the Est Region.

IAMGOLD has not made mention of the unrest, and in its 2018 results said that it planned to carry out further exploration near the Essakane mine over 2019 — plans that it has not indicated will change.

While on the surface, the government order to shut artisanal mines doesn’t directly affect or even target foreign operators, Dumbrille warned that it will have flow-on effects to security.

“With these closures and temporary delays in operations in the eastern part of the country, that brings resentment to the government,” he said, because workers’ livelihoods will be impacted and the temptation to join groups hostile to the government will rise.

“[Explorers are] going out and doing exploration in these areas where they’re finding artisan mining, [and the order is] a threat to their areas.”

Because militant groups are gaining influence in areas of small operations, exploration teams are more exposed to higher risks.

While he said it is too soon to see if Canadian investment in the country will fall in 2019, he believes that more operators are taking time to consider the dangers.

“The mining industry is realizing that they are a target, and that there are security concerns out there. You can’t just go to country X, dig a hole, get to your deposit and then come out. You need to do the proper due diligence, need the proper security procedures, need the proper duty of care.”

Don’t forget to follow us @INN_Resource for real-time updates.

Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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Catch up on some of the biggest news of the week for the cannabis investment world.

Three political parties have formed a coalition in Germany, leading to a new government, and it has promised cannabis reform in the European nation.

Meanwhile, a popular cannabis retailer confirmed consumers will now find its products available for delivery on the Uber Eats mobile application in Ontario.

Keep reading to find out more cannabis highlights from the past five days.


Coalition of parties promises forward-looking cannabis policy

Germany, a country with comprehensive and elaborate medicinal rules for cannabis, is in a time of transition as a new government is set to begin to take over after 16 years of Angela Merkel.

Olaf Scholz, the proposed next chancellor of Germany, leads a three party coalition that will become the country's governing body. As part of its promises, talk of adult-use cannabis regulation has now gained even more momentum. A report from MJBizDaily quotes a German policy document that shows the coalition's stance:

"We are introducing the controlled distribution of cannabis to adults for consumption purposes in licensed shops. This controls the quality, prevents the transfer of contaminated substances and guarantees the protection of minors."

However, despite the promise and excitement, it remains to be seen how these ideas will be applied since no formal regulations have been drafted or approved yet.

Canadian cannabis retailer partners with popular delivery app

Tokyo Smoke, a cannabis retail operator in Canada owned by Canopy Growth (NASDAQ:CGC,TSX:WEED), announced a collaboration agreement with Uber Canada (NYSE:UBER) whereby cannabis consumers will be able to use the Uber Eats app to order products before they visit stores.

While the app won't let consumers get cannabis delivered to them, this new method opens the doors to more dynamic ways of buying cannabis.

"As a market leader in innovation and a platform used by so many Canadians, we believe this is the ideal next offering that can be done safely and conveniently on the Uber Eats app," Mark Hillard, vice president of operations with Tokyo Smoke, said in a press release.

A report from the Canadian Press indicates Ontario is considering allowing dispensaries to have delivery and pickup options made available to consumers permanently. The province allowed some of these purchasing options at the outset of the COVID-19 pandemic, but then removed them.

Lola Kassim, general manager of Uber Eats Canada, said this new end-to-end experience will provide consumers with responsible access to legal cannabis products.

Cannabis company news

  • Organigram Holdings (NASDAQ:OGI,TSX:OGI) issued financial results for its Q4 2021 period. In its report, the company notes a net loss of C$26 million despite a 22 percent uptick in net revenue to C$24.9 million. Beena Goldenberg, the newly appointed CEO of the firm, is encouraged by the market share position earned by the company, which said it became the fourth biggest producer in Canada during the reporting period.
  • Halo Collective (NEO:HALO,OTCQB:HCANF) confirmed the decision for Akanda, its spinoff company focused on international cannabis opportunities, to begin trading on a US exchange. "The number of shares to be offered and the price range for the proposed offering have not yet been determined," the company told investors in a press release.
  • High Tide (NASDAQ:HITI,TSXV:HITI) announced the acquisition of 80 percent of NuLeaf Naturals, a CBD product wellness developer, for an estimated US$31.24 million. The deal includes a three year option clause for High Tide to complete a total acquisition. "As international markets open up and as export regulations evolve, NuLeaf's cGMP-certified facility positions us to take advantage of the global CBD business opportunity," Raj Grover, president and CEO of High Tide, said.
  • Humble & Fume (CSE:HMBL,OTC Pink:HUMBF) released the financial report for its first 2022 fiscal quarter to shareholders and the market. "As the legal cannabis market in North America continues to mature, Humble remains agile and focused on providing a leading solution for brands to scale quickly and retailers to focus on their customers," Joel Toguri, CEO of Humble, said.

Don't forget to follow us @INN_Cannabis for real-time updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Commercially viable scandium deposits are rare, making widespread use of the metal tricky. However, there is indeed opportunity in the space.

Scandium is a critical metal that is as strong as titanium, as light as aluminum and as hard as ceramic.

While it is more abundant than lead, mercury and all the precious metals, there are no pure scandium-producing mines. The rare earth element is often a by-product, produced from refining other metals, including uranium.

Pure scandium metal rarely concentrates at higher grades alongside other metals, making commercially usable scandium deposits very rare. What's more, even when scandium is found at elevated levels, processing it can be difficult, leading to very few stable sources of this critical metal.


Not surprisingly, that means there has been very little adoption of scandium in commercial applications. However, as John Kaiser of Kaiser Research has pointed out several times in the past few years, as well as more recently, that doesn't mean there hasn't been research into how scandium could be used in the future.

"Hundreds of applications (have been) filed, many of them related to alloys with aluminum," he said in an interview with the Investing News Network. "This obscure metal is going to go ballistic in the next few years."

Kaiser made that statement a few years back, and scandium has yet to go ballistic. But he still has hope for the metal, and it could yet have its day in the sun.

Below is an overview of the scandium market. Topics covered include current production, newcomers to the space and the metal's potentially bright future.

Current scandium production

The first known large-scale scandium production was associated with Russian military programs. Details are lost to history, but Russians reportedly alloyed the metal with aluminum to make lightweight MIG fighter parts. Mining at these historic Russian production sites has ceased, but stockpiles of scandium oxide and scandium master alloy remain in Russia. These stockpiles are rumored to be dwindling, but continue to be offered for sale on the market.

Today, most scandium is produced as a by-product during the processing of other ores, such as uranium or rare earths, or recovered from previously processed tailings. As a result, scandium supply can be affected by the supply and demand dynamics of the metals it is produced with. That can make the metal's already tough-to-follow market dynamics even more difficult to understand.

According to the US Geological Survey, scandium-producing countries include China, where it is a by-product of iron ore, rare earths, titanium and zirconium; and the Philippines, where it is a by-product of nickel. Scandium is also produced as a by-product of uranium in Russia, Ukraine and Kazakhstan.

More US production could be on the horizon as well after a push in legislation that encourages the Department of Defense to look into the potential uses of the metal. Environmental and construction permits have been approved for NioCorp's (TSX:NB,OTCQX:NIOBF) polymetallic Elk Creek project with probable reserves estimated to be 36 million tonnes containing 65.7 parts per million scandium.

Scandium resources have been identified in minerals-rich regions across the world, most notably in Australia, where a number of junior mining companies are working to develop scandium deposits in New South Wales. These include Scandium International Mining (TSX:SCY), which controls the Nyngan project; Clean TeQ Holdings (ASX:CLQ,OTCQX:CTEQF), which holds the Sunrise project; and Platina Resources (ASX:PGM,OTC Pink:PTNUF), which is working on the Owendale project.

Scandium price and trading

The US Geological Survey states that the global scandium market is "small relative to most other metals." This is exemplified by global production and consumption, which is only an estimated 15 to 20 metric tons annually.

The US Department of Commerce and the International Trade Commission do not have specific data on trading for the metal. Furthermore, there is no formal buy/sell market today — scandium is not traded on an exchange and there are no terminal or futures markets.

Instead, the metal is traded between private parties, mostly at undisclosed prices and in undisclosed amounts. Therefore, understanding the precise volume of production and cost of scandium is difficult, and independent estimations are more relevant.

Production estimates are based on levels of trader activity and interest, as well as the knowledge that some traders deal in the critical metal from very small operations.

The estimates also include consumers believed to be sourcing their own scandium through small, controlled recovery operations, but don't consider amounts of the metal contained in the master alloy currently being sold from Russian stockpiles.

The scandium opportunity

Analysts expect the global scandium market to grow at a compound annual growth rate of above 11 percent between 2020 and 2025. "The major factors driving the growth of the market studied are the accelerating usage in solid oxide fuel cells, and the rising demand for aluminum-scandium alloys," notes ReportLinker.

Despite the lack of known, stable supply, scientists and engineers have been working hard to develop new products incorporating the metal. Scandium's potential in high-tech applications is well documented. Highlights of the metal's properties include:

  • It can be used in the creation of stronger, corrosion-resistant, heat-tolerant and weldable aluminum alloys for lightweight aircraft and automobiles.
  • Its outstanding electrical properties and heat resistance are valuable for solid oxide fuel cells.
  • It has unique optical properties for high-intensity lamps.

A recent Kaiser Research report on scandium details the wide variety of end uses for scandium now and into the future, as well as where potential supply to meet that demand may originate.

potential scandium oxide supply and demand

Potential scandium oxide supply and demand.

Kaiser Research

As Kaiser has explained, "There's an enormous latent demand for scandium if it ever became available on a primary, scalable basis."

In other words, the only barrier to accessing demand from a new family of high-performance aluminum materials and energy/lighting products is the lack of commercially viable larger-scale scandium production. Interestingly, Kaiser's work highlights two important scandium market events that may "have the potential to launch scandium demand growth over the next decade towards a 1,000 (tonne per annum) market worth US$2 billion."

For one, Rio Tinto (NYSE:RIO,ASX:RIO,LSE:RIO) announced in 2020 that it has developed a route to recovery for scandium at its Sorel-Tracy facility in Quebec, where it produces titanium slag from the Lac Tio iron-titanium deposit. In mid-2021, Rio Tinto began commercial-scale operations at its new scandium oxide production facility.

"The Rio Tinto development is a game changer for the scandium sector," said Kaiser, who believes the increase in scandium production could help boost the sector.

Secondly, Scandium International Mining filed an application in late 2019 for a patent protecting a method for recovering scandium and other metals from the waste streams of copper oxide leaching operations. In mid-2020, the company announced that copper raffinate tests showed its patent-pending process could recover enough scandium to match the supply being added to the market by Rio Tinto.

"Conditions are finally right for scandium to become the ideal lightweighting solution for aluminum," Kaiser said in his note to investors.

This is an updated version of an article originally published by the Investing News Network in 2014.

Don't forget to follow us @INN_Resource for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.

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