The Sabbatical is Over

3 09 2012

I had to put this blog on hold last year to prevent perceptions of conflict of interest with a job that I took on in August. Such concerns are no longer relevant now that I have returned to my alma mater. I will resume posting in the next few days. I am definitely looking forward to writing more and I think it will be interesting to write in the current context. Stay tuned.

Just Digging is Taking a Summer Break.

25 07 2010

I will resume posting entries on Just Digging after my vacation break. Very lovely summer weather has made it very hard to find time for writing. Unless there is anything major happening, new entries should make their way to the blog by September.

Thank you for reading.


Credits for the picture:Robert Bruce Murray III


11 01 2010

Tomorrow, I will be posting an entry on junior companies’ rush to become compliant with NI 43-101 in a high-risk, (potentially) high reward venture in Canada’s Ring of Fire. As this involves a bit of jargon and an understanding of the meaning of compliance with this standard, I decided give you a crash course on the matter.

Compliance with NI 43-101 indicates that the estimation made of a mineralization is consistent with the Standards of Disclosure for Mineral Projects in Canada. It essentially provides a mineral resource classification system to assess the economic viability of specific deposits on more solid and reliable foundations. NI 43-101 came in the wake of the Bre-X scandal and is also a way of protecting investors. Compliance with NI 43-101 involves the use of technical jargon such as:

Mineral Resource is sub-divided into Inferred (geological evidence but limited sampling), Indicated (confidence is sufficient to begin assessing economic viability and feasibility of the project) and Measured (tonnage and grade are estimated to close limits and a variation from the estimate would not affect the economic viability of the project).These indicates varying levels of geological confidence which that the quantity, grade, and form of a resource imply reasonable prospects for economic extraction.

Mineral Reserve is subdivided into Probable Reserves and Proven Reserves. In short a reserve is the economically mineable part of a measured or indicated resource as demonstrated by a preliminary feasibility study. A probable reserve can be established from both measured and indicated resource whereas a proven reserve is the economically mineable part of the measured resource only.

Essentially compliance is an indicator of economic viability. What a nice job I have made of vulgarizing the basics. Should you wish to learn more, refer to the Canadian Institute of Mining, Metallurgy and Petroleum’s Definition Standards.

2010 will be all about [insert name here]

2 01 2010

Ladies and gentlemen, after more than a week off the blog for such obvious reasons as the holidays hijacking all of my free time (there is no such thing as meeting up with your family in a place so remote that broadband does not exist*); I am almost officially back on (I have yet to get a new laptop). This entry has for purpose of making you aware of what will be coming up on my blog in 2010. [Drum roll].

Among other things, I hope to write more entries about uranium (market trends as well as stock picks), new deposits, environmental affairs and more about downstream processing (yes that means more smelters). I also hope to write at least two entries a week although news of the Canadian Federal budget being introduced in March may disrupt the flow of entries. During that period I’ll be busy revising typos and sub par Babelfish translation for the good of Canadians and Canadian businesses from coast to coast to coast. I will be thinking of you all the time, I promise.

Of mention, this blog is now accessible at the following URL This is one of my Christmas presents (thanks Patrick)

*Remember Canada is one of the developed countries with the lowest penetration of broadband.

Ernst & Young’s ‘Lessons from Change: Restoring Growth in the Mining and Metals Industry”.

13 12 2009

An Ernst& Young report was recently released to give insights to the metals and mining industry sectors on how to best navigate an economic downturn as well as commodities boom and bust cycles. To have a greater value this report should have been published in Q1-2009, although I will give it the credit of conforming to economists’ beliefs in the best explanations being made after the fact.

The report is built on the postulate that market unpredictability is the most prominent challenge facing the metals and mining industry. E&Y finds mining’s general priorities “have morphed from boom-related production constraints to back-to-basic efficiency gains, made in part through better capital and cash flow management, and heightened risk awareness.” Basically this is what companies, with the exception of gold producers, have implemented in the past year.

In very blunt terms here are some elements of E&Y’s recipe for success.

• Reduce debt and design capital structure flexibility
• Create sustainable cost reduction
• Create sustained access to capital
• Divest while buyers are active
• Manage their cash and working capital at all parts of the cycle
• Add value through diversification
• Stress-test risk management
• Increase company flexibility to reduce pressures on stakeholders
• Build in flexibility of core and maintenance
• Retain hard-to-hire skills

This is a good dose of common sense. Sometimes one wonders what good are consultants…