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Archive for November, 2007

NovaGold is under attack from the big financial organizations and this is as you would expect.  I refer to a Mineweb report that reads in part: 

Citigroup this week downgraded NovaGold Resources shares from buy to hold, more than halved the target price from US$23 to $10 share, and advised the Vancouver junior company be put up for sale following what analysts called the “making of a mining disaster.”   Citigroup metals analysts John Hill and Graham Wark declared, “The magnitude of underestimation is shocking to us, even in an industry rife with over-runs, casts a cloud over the equally-challenging yet earlier stage Donlin Creek (AK) gold project.  The basic nature of the shortfalls also embarrasses the engineering history of Teck. We would expect pressure for strategic change.  Management credibility is an issue, in our view. After the fumble at Galore Creek, we believe that a sale of the company is the best possible outcome.”

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A brief update on the Bellavista Heap Leach Pad.  You may recall that is the “failing” heap leach pad in Costa Rica.  I have added a number of new photos of the failing pad to my longer, more technical writings on the pad at this link

These photos show a considerable increase in the movement and slope instability of the conrner that first gave warning of problems via cracking.  Not that there is any legal obligation on the company to tell us what is happening–they have already announced mine abandonment.  But you would have though that the Costa Rican authorities would like to know what is happening?

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This is not a good picture, but it does emphasize the rugged terrain along which new roads are being constructed to the site of the Galore Creek not-soon-to-be project. 

Road Progress

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For those interested in the bigger picture of the politics of mining, here is a link to a new publication that makes fascinating reading.  I refer to a new e-publication by War on Want: Fighting Global Poverty.  Their publication is entitled Fanning the Flames.

The publication is not for the faint of heart.  It is gut-hitting, hard-punching, biased, prejudiced, and one sided.  But it is well-written and presents a picture that demands response by the London-based mining industry that it attacks.  To give you some idea of its tone and approach, here is an abstract:

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The first addition to the Blogroll of this blog was Women In Mining.  When we started I THINK MINING, the only other blog related to mining that I found was Women In Mining.  Then one day the blog Women In Mining went off line.  Now I am delighted to receive and announcement from it orginator that she is back, this time with a full-scale web site:

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In the October 31, 2006 NI 43-101 Independent Technical Report (ITR) for the Galore Creek project, Hatch writes the following about cost and currency risks associated with the project:

Construction material costs:  current prices for steel, mining and processing equipment are on an upward trend driven by supply and demand.  Although the project budget has been updated to reflect the prevailing market conditions, these trends may continue.

Exchange rate fluctuation:  many components for equipment and materials are manufactured in the USA or Europe and consequently the prices of the finished products are affected to some degree by exchange rate fluctuations which could lead to increased costs. 

In the light of what has actually happened, these words are proven true, but proven too timid and wiggly to have prevented a cost estimating disaster. 

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The bad news of the Thanksgiving weekend is the announcement that work is to be suspended on the development of Galore Creek due to rising costs and a soaring Canadian dollar.  This is bad news for investors; but by now they should be used to the vagaries of mining projects and the swings of fortune they entail. 

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