Infographic: The Story of Voisey's Bay: The Auction (2 of 3)
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The Story of Voisey’s Bay: The Auction (Part 2 of 3)

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Part 1: The DiscoveryPart 2: The AuctionPart 3: Voisey's Today

The Story of Voisey's Bay: The Auction (Part 2 of 3)

Part 1: The DiscoveryPart 2: The AuctionPart 3: Voisey's Today

The Story of Voisey’s Bay: The Auction (Part 2 of 3)

Presented by: Equitas Resources, “Nickel exploration in Labrador”

Preface

The hit at diamond drill hole #2 of 33m of massive sulphides turned Voisey’s Bay from caribou pasture to one of the most exciting stories in the mining world. For a full recap of the events leading to this point, check out Part 1 of the Voisey’s Bay story.

In Part 2 of this series, we look at the ensuing bidding war that occurred once it was clear that Voisey’s Bay had all of the action. Again, we have turned to Jacquie McNish’s fabulous book The Big Score, which documents the history of the discovery, biographical elements of Robert Friedland’s life, and the ensuing bidding war between Inco and Falconbridge that led to one of the most spectacular takeovers in mining history. If you like these infographics, then look into buying Jacquie’s book. It was gripping and full of information.

Setting the Stage

The discovery of massive sulphides with Hole #2 brought increased attention to the former diamond play. However, the stock price didn’t really explode until the assays came in: 2.23% nickel, 1.47% copper, and 0.123% cobalt. Diamond Fields now traded in December 1994 at $13.50 per share, up from $4.65 just a month prior.

The company doubled down on drilling, and up until January 1995 they had hit nothing after Hole #2. The price dribbled down to $11.00.

However, it was in February 1995 that the results for Holes #7 and #8 were released, and they were some of the most significant holes for the entire project. The holes were in the Ovoid, which would soon be a famed and ultra-high rich section of the Voisey’s Bay discovery.

Hole #7 was 104m long and had 3.9% nickel, 2.8% copper, and 0.14% cobalt. Hole #8 was 111m long and had 3.7% nickel, 2.78% copper, and 0.13% cobalt. This propelled the stock price to $20.00 in February 1995.

Continued exploration of the Ovoid revealed a bowl-shaped orebody lying just below surface. This deposit had surface dimensions of some 800m by 350m, and extended to depths of about 125m. More nickel from Ovoid came in every month, and the stock price continued to rise.

At this point, Diamond Fields could no longer fly under the radar. Major mining couldn’t stand to watch as one of the world’s greatest base metal deposits blossomed outside of their influence.

The Suitors

Three major mining companies vied to get in on the action. Here’s some history on each of them:

Teck

At this time, the Canadian diversified mining company Teck had nine mines in operation and had a reputation as a swift deal maker.

  • In 1947, Teck’s founder Norman Keevil Sr. was one of the first to use magnetic survey technology that was first employed by the US Military to find submarines. With this technology, he found one of the richest copper deposits in Canada.
  • He once impressed a plane load of investors by flying them over a 150-foot copper vein that was exposed to the air. It shone like a newly minted penny as they passed over, stunning even the most skeptical investors. (He had previously parachuted a crew in to polish the ore in the bush.)

Inco

The International Nickel Company was founded in 1902 and for most of the 20th century it remained the dominant player in nickel exploration, production, and marketing.

The company virtually invented the nickel market:

  • In 1890, global output of nickel was 3,000 tonnes
  • Nickel was mainly used for military purposes but sales dried up at the end of WWI
  • The company discovered nickel alloys that were marketed for use in automobiles, pipes, industry, coins, and even kitchen sinks
  • By 1951, the world consumed 130,000 tonnes of nickel a year with 90% of it supplied by Inco

By 1995, Inco was still the market leader in nickel, producing 26% of the world’s nickel with $2.3 billion in sales each year.

Falconbridge

In 1901, American inventor Thomas Edison found a nickel-copper ore body in the area northeast of Sudbury, Ontario.

However, it wasn’t until 1928 that Thayer Lindsley, the founder of Falconbridge, bought these claims and began to turn it into its first mine.

At the time, Inco had the only technology in North America to refine nickel, so Falconbridge sent its production to Norway where it purchased an operating refinery.

The company was smaller than Inco, but seen as more aggressive and nimble. The company produced 11% of the world’s nickel in 1995.

The Bidding Begins

While Inco, Falconbridge and up to a dozen other global miners spent resources on calculating the value of Voisey’s Bay, Teck was the first to approach with a different strategy.

In less than a day, and despite seeing any core, Teck was able to do a simple deal less than four pages long: $108 million for 10% of the company, or the equivalent of $36 per share. Teck also surrendered their voting rights to Friedland to prevent future hostile takeovers.

That got the market talking. Days later, the stock would trade at over $40 per share with a market capitalization of more than $1 billion.

In May 1995, after much posturing between Inco and Diamond Fields executives, another deal was struck. This time, Inco bought a 25% stake of Voisey’s Bay for US$386.7 million in preferred shares and cash, as well as 8% of Diamond Fields from company co-founder Jean-Raymond Boulle and early investor Robertson Stephens.

By the time the deal closed in June 1995, Diamond Fields’ stock price doubled again to $80.00.

After months of drilling misses outside of the Ovoid, finally in August there were signs of light: 1m of massive sulphides were hit on Hole #166.

In November, drill hole #202 retrieved 40m of massive sulfides, the largest section of sulfides found outside the Ovoid. It was now clear that there was a series of deposits at Voisey’s Bay. The hole assayed 3.36% nickel and became a part of what is known as the Eastern Deeps.

The Showdown

In December, Inco and Falconbridge both began to aggressively pursue Diamond Fields.

First, Inco presented a deal in principle for $3.5 billion, or $31 per share. Then, Falconbridge intercepted with an official offer for $4.0 billion, or $36 per share. This was a risky move for the smaller company, but it limited its downside by adding in $100 million in fees to the agreement in the case the deal were to not be finalized.

Next, the two competitors (Inco and Falconbridge) teamed together through a mutual connection to present an offer in tandem.

It was instantly shot down by Friedland.

Finally on March 26th 1996, Inco announced a takeover bid of its own for $4.5 billion of Diamond Fields – the equivalent of $43.50 per share or $174 pre-split. Inco’s stock price dropped but it held on, making the total value of the deal closer to $4.3 billion. On April 3, the deal was officially signed by all parties.

Part 3: Voisey’s Bay Today

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Energy

The Periodic Table of Endangered Elements

90 different elements form the building blocks for everything on Earth. Some are being used up, and soon could be endangered.

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The Periodic Table of Endangered Elements

The building blocks for everything on Earth are made from 90 different naturally occurring elements.

This visualization made by the European Chemical Society (EuChemS), shows a periodic table of these 90 different elements, highlighting which ones are in abundance and which ones are in serious threat as of 2021.

On the graphic, the area of each element relates to its number of atoms on a logarithmic scale. The color-coding shows whether there’s enough of each element, or whether the element is becoming scarce, based on current consumption levels.

ElementFull NameStatus
AcActiniumPlentiful supply
AgSilverSerious threat
AIAluminumPlentiful supply
ArArgonPlentiful supply
AsArsenicSerious threat
AtAstatinePlentiful supply
AuGoldLimited availability
BBoronLimited availability
BaBariumPlentiful supply
BeBerylliumPlentiful supply
BiBismuthLimited availability
BrBrominePlentiful supply
CCarbonPlentiful supply / serious threat
CaCalciumPlentiful supply
CdCadmiumRising threat
CeCeriumPlentiful supply
CIChlorinePlentiful supply
CoCobaltRising threat
CrChromiumRising threat
CsCesiumPlentiful supply
CuCopperRising threat
DyDysprosiumRising threat
ErErbiumPlentiful supply
EuEuropiumPlentiful supply
FFlourinePlentiful supply
FeIronPlentiful supply
FrFranciumPlentiful supply
GaGalliumSerious threat
GdGadoliniumPlentiful supply
GeGermaniumSerious threat
HHydrogenPlentiful supply
HeHeliumSerious threat
HfHafniumSerious threat
HgMercuryLimited availability
HoHolmiumPlentiful supply
IIodinePlentiful supply
InIndiumSerious threat
IrIridiumRising threat
KPotassiumPlentiful supply
KrKryptonPlentiful supply
LaLanthanumPlentiful supply
LiLithiumLimited availability
LuLutetiumPlentiful supply
MgMagnesiumLimited availability
MnManganeseLimited availability
MoMolybdenumLimited availability
NNitrogenPlentiful supply
NaSodiumPlentiful supply
NbNiobiumLimited availability
NdNeodymiumLimited availability
NeNeonPlentify supply
NiNickelLimited availability
OOxygenPlentiful supply
OsOsmiumRising threat
PPhosphorusLimited availability
PaProtactiniumPlentiful supply
PbLeadLimited availability
PdPalladiumRising threat
PoPoloniumPlentiful supply
PrPraseodymiumPlentiful supply
PtPlatinumRising threat
RaRadiumPlentiful supply
RbRubidiumPlentiful supply
ReRheniumPlentiful supply
RhRhodiumRising threat
RnRadonPlentify supply
RuRutheniumRising threat
SbAntimonyLimited availability
ScScandiumLimited availability
SeSeleniumLimited availability
SiSiliconPlentiful supply
SSulfurPlentiful supply
SmSamariumPlentiful supply
SnTinLimited availability
SrStrontiumSerious threat
TaTantalumSerious threat
TbTerbiumPlentiful supply
TeTelluriumSerious threat
TiTitaniumPlentiful supply
TIThaliumLimited availability
TmThuliumPlentiful supply
VVanadiumLimited availability
WTungstenLimited availability
XeXenonPlentiful supply
YYttriumSerious threat
YbYtterbiumPlentiful supply
ZnZincSerious threat
ZrZirconiumLimited availability
ThThoriumPlentiful supply
UUraniumRising threat

While these elements don’t technically run out and instead transform (except for helium, which rises and escapes from Earth’s atmosphere), some are being used up exceptionally fast, to the point where they may soon become extremely scarce.

One element worth pointing out on the graphic is carbon, which is three different colors: green, red, and dark gray.

  • Green, because carbon is in abundance (to a fault) in the form of carbon dioxide
  • Red, because it will soon cause a number of cataphoric problems if consumption habits don’t change
  • Gray because carbon-based fuels often come from conflict countries

For more elements-related content, check out our channel dedicated to raw materials and the megatrends that drive them, VC Elements.

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Mining

Mapped: The 10 Largest Gold Mines in the World, by Production

Gold mining companies produced over 3,500 tonnes of gold in 2021. Where in the world are the largest gold mines?

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The 10 Largest Gold Mines in the World, by Production

This was originally posted on Elements. Sign up to the free mailing list to get beautiful visualizations on natural resource megatrends in your email every week.

Gold mining is a global business, with hundreds of mining companies digging for the precious metal in dozens of countries.

But where exactly are the largest gold mines in the world?

The above infographic uses data compiled from S&P Global Market Intelligence and company reports to map the top 10 gold-producing mines in 2021.

Editor’s Note: The article uses publicly available global production data from the World Gold Council to calculate the production share of each mine. The percentages slightly differ from those calculated by S&P.

The Top Gold Mines in 2021

The 10 largest gold mines are located across nine different countries in North America, Oceania, Africa, and Asia.

Together, they accounted for around 13 million ounces or 12% of global gold production in 2021.

RankMineLocationProduction (ounces)% of global production
#1Nevada Gold Mines🇺🇸 U.S. 3,311,0002.9%
#2Muruntau🇺🇿 Uzbekistan 2,990,0202.6%
#3Grasberg🇮🇩 Indonesia 1,370,0001.2%
#4Olimpiada🇷🇺 Russia 1,184,0681.0%
#5Pueblo Viejo🇩🇴 Dominican Republic 814,0000.7%
#6Kibali🇨🇩 Democratic Republic of the Congo 812,0000.7%
#7Cadia🇦🇺 Australia 764,8950.7%
#8Lihir🇵🇬 Papua New Guinea 737,0820.6%
#9Canadian Malartic🇨🇦 Canada 714,7840.6%
#10Boddington🇦🇺 Australia 696,0000.6%
N/ATotalN/A13,393,84911.7%

Share of global gold production is based on 3,561 tonnes (114.5 million troy ounces) of 2021 production as per the World Gold Council.

In 2019, the world’s two largest gold miners—Barrick Gold and Newmont Corporation—announced a historic joint venture combining their operations in Nevada. The resulting joint corporation, Nevada Gold Mines, is now the world’s largest gold mining complex with six mines churning out over 3.3 million ounces annually.

Uzbekistan’s state-owned Muruntau mine, one of the world’s deepest open-pit operations, produced just under 3 million ounces, making it the second-largest gold mine. Muruntau represents over 80% of Uzbekistan’s overall gold production.

Only two other mines—Grasberg and Olimpiada—produced more than 1 million ounces of gold in 2021. Grasberg is not only the third-largest gold mine but also one of the largest copper mines in the world. Olimpiada, owned by Russian gold mining giant Polyus, holds around 26 million ounces of gold reserves.

Polyus was also recently crowned the biggest miner in terms of gold reserves globally, holding over 104 million ounces of proven and probable gold between all deposits.

How Profitable is Gold Mining?

The price of gold is up by around 50% since 2016, and it’s hovering near the all-time high of $2,000/oz.

That’s good news for gold miners, who achieved record-high profit margins in 2020. For every ounce of gold produced in 2020, gold miners pocketed $828 on average, significantly higher than the previous high of $666/oz set in 2011.

With inflation rates hitting decade-highs in several countries, gold mining could be a sector to watch, especially given gold’s status as a traditional inflation hedge.

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