Saskatchewan & Manitoba Mining Pre-Release
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Saskatchewan & Manitoba Mining Pre-Release 2018 PRE-RELEASE EDITION Global Business Reports Global Business Reports www.gbreports.com www.gbreports.com Financier, client, & mine site each on different continents? Table of Contents Saskatchewan’s We’re your 3. Saskatchewan's Mining Industry: Converting Potential into Success common ground. 6. Advencing Exploration: Mining Industry Preparing for an Upturn 9. Building Foundation: Dear Readers, Converting Potential into Success Our global experience gives Manitoba's Mining Renaissance 10. Insights on the Mining Business you expert, integrated solutions on every phase of Global Business Reports is pleased to present the first installment of its research into Sas- Ranked the top destination for mineral ex- produces all of Canada’s uranium, katchewan and Manitoba’s mining industries. Ranked by the Fraser Institute as the top two ploration investment by the Fraser Institute remaining the second-largest producer in your mining project. destinations for mining investment in 2016 according to mineral resource potential and policy in 2016, Saskatchewan has held strong ties to the world, and boasts world-class potash perception, our team has been investigating the attractiveness of these two mining jurisdic- the mining sector for many years. Tradition- reserves. tions and the current state of their industries. ally known as an agricultural province, mining Highly regarded for its resource potential, Saskatchewan takes top place in the Fraser Insti- has played a prominent role in the diversifica- The Athabasca basin hosts the highest- .com tute’s ranking, with its predominantly-mined resources being potash and uranium. However, tion of Saskatchewan’s economy, with over grade uranium deposits in the world. unfavorable market conditions for these two commodities have caused the industry to suffer 30,000 citizens now dependent on the indus- With an average ore grade of 3% across in recent years. Low uranium prices and an oversupplied market have led Saskatchewan’s try in some way for employment. the 30 identified deposits, the two largest premier producer, Cameco, to reduce production at all its sites and put its McArthur River/Key Lake operations on standby in 2018. Meanwhile, uranium juniors continue to drive explora- deposits, Cigar Lake and McArthur River, tion programs forward to position themselves to take advantage of an upturn, but long lead Over the past decade, Saskatchewan has have average ore grades of 15%, reaching times for mine development have led many investors to look to other mining jurisdictions been amongst the top growth provinces in significantly higher in some pockets. with the potential for quicker return on investment dollars. terms of mineral production value, along- Operated by Cameco, the second-largest producer of uranium globally, both the In its neighboring province, Manitoba, a disconnect exists between its apparent attractiveness side Québec, Newfoundland and Labrador and the size of its industry. Manitoba’s mining sector is largely built around its two produc- and British Columbia. In 2016, Saskatchewan McArthur River/Key Lake property and ers, Hudbay and Vale, with the latter encountering challenges due to the sustained downturn also experienced the largest absolute gain in the Cigar Lake operation produce about in nickel prices. While the need for new mining operations in the province is clear, Manitoba production value year-over-year, from C$7.1 18 million lb/year and each represents lacks advanced exploration projects, meaning a lag in new mine development in the foresee- billion to C$8.5 billion. However, despite its about 12% of the world’s production. able future. apparent attractiveness, exploration spend- Formed in 1988, the company’s legacy Both provinces have the resources, stability and infrastructure in place to be top mining ju- ing in the province took a dive in 2017 from predates the formation of Cameco risdictions but still need to convert their potential into success. While Saskatchewan is home C$229 million in 2016 to C$181 million. This to the 1950s. To ensure that Cameco to the more developed industry and must now focus on advancing its exploration projects, follows an already significant decrease from retains a presence in Saskatchewan, the Manitoba has some way to go before its mining sector can thrive. Nevertheless, with contin- the C$257 million spent in 2015. government has kept a “golden share”, Saskatchewan & Manitoba ued focus from each of the local governments, the provinces have the makings for success in stipulating that the head office must be Mining 2018 Pre-Release the longer-term. As such, both Saskatchewan and Manitoba present interesting prospects for potential investment both now and into the future. The gap between Saskatchewan’s resource in Saskatoon. The rest of the company potential and investor confidence can in part shares are publically owned. This Pre-release is a snapshot of the research conducted so far for GBR’s Saskatchewan and be attributed to long lead times for mine de- Manitoba 2018 series. We would like to thank all our interviewees for their insights and we will velopment, causing many investors to look Cameco has gained a strong foothold in continue our research towards publication of the final report in May. to other mining jurisdictions such as South the global market over the years, but has Project Director & Journalist: Catherine Howe Project Coordinators: Sorina Dumitru, Sarah We warmly invite you to explore this valuable resource. America, Africa and Australia, for quicker re- also been subject to unfavorable market Crompton-Donnelly turn on investment dollars. The other primary conditions since the Fukushima disaster Journalist: Alfonso Tejerina Saskatoon Editor: Mungo Smith factor is unfavorable market conditions for in 2011, since when the market has seen +1 306 955 4778 Graphic Designer: Inanc Duman potash and uranium, coupled with a lack of almost continuous decline. Catherine Howe [email protected] Project Director & Journalist significant diversification into other resourc- Cover Image: Courtesy of SSR Mining Inc. Global Business Reports es. In response to market oversupply, Toronto A Global Business Reports Publication Cameco has reduced production at all For updated industry news from our on-the-ground +1 416 601 9046 teams around the world, please visit our website Superstar resources: potash and its sites and will be putting the McArthur [email protected] at gbreports.com, subscribe to our newsletter by uranium River/Key Lake operations on standby in signing up to our VIP list through our website, or follow us on Twitter: @GBReports. 2018. Kazakhstan-based KazAtomProm Vancouver While the province’s resource reserves will also reduce uranium production by +1 604 681 4196 are varied, uranium and potash remain the 20% in 2018 to better align supply with [email protected] www.gbreports.com province’s frontrunners. Saskatchewan demand. These moves by the world’s Global Business Reports | SASKATCHEWAN & MANITOBA MINING 2018 3 Global Business Reports Global Business Reports PRE-RELEASE | ISASKATCHEWAN & MANITOBA MINING 2018 www.gbreports.com www.gbreports.com SASKATCHEWAN & MANITOBA MINING 2018 | PRE-RELEASE uranium giants will cut global annual “In Saskatchewan, we tend to take our cues from industry. We resources mined would be one way to established mining companies highlight the retirement of mine founders and third production from 160 million pounds, have an industry-led approach rather than a government- mitigate the risk associated with focusing a need for the province to diversify its generations joining the industry, uptake of with about 35 to 40 million pounds now down approach… While commodity markets rise and fall, on just two commodities. Exemplifying resource exploitation to better weather automation is increasing so as to be more not coming out of the ground. “We are Saskatchewan’s business environment remains stable and the scope for Saskatchewan’s mining future dips in different commodity globally cost-competitive and gain more optimistic for the future, although we are reliable… During this fiscal year, our sector to successfully pursue resources markets. recovery out of processes,” highlighted not out of the woods yet; there is still a lot government will also be introducing a new, beyond potash and uranium, gold-focused Mike Fedoroff, general manager at Hatch. of inventory in the world, so the market targeted Mineral Development Strategy. SSR Mining achieved record production Increasing competitiveness will take some time to bounce back,” said This will include a mineral exploration in 2016 and then again in 2017. Seabee in Referencing the advancement of artificial Gitzel. “However, the moves that have incentive that will cover a portion of Saskatchewan is the company’s second- Companies across the mining supply chain intelligence (AI) and its application to been made by the major producers send the costs associated with ground-based largest operation after its Marigold gold are as focused as ever on reducing costs mine data to discern trends for better a signal that a US$20 price for uranium is exploration activities.” operation in Nevada, which accounts and increasing efficiencies wherever operation, Fedoroff continued: “The not sustainable. We are definitely headed for 50% of total production and 50% of possible. Aside from low commodity ability to store massive amounts of in the right direction, and we have an - Hon. Steven Bonk, operating value. Seabee comprises