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To: ms.smartest.person who wrote (1511)	10/6/2006 12:48:56 PM
From: ms.smartest.person	Read Replies (1) \| Respond to of 3198

Global miners wrestle with growing labor costs Fri Oct 6, 7:34 AM By Pav Jordan SANTIAGO, Chile (Reuters) - Whether confronting powerful unions in South America or stopping competitors from poaching workers in Australia, miners are finding it increasingly expensive to pay workers who want a share of soaring profits. Metal prices are on a sustained high around the world amid booming demand, but along with higher company revenue has come a spike in the cost of everything from fuel and electricity to labor. "Everybody is well aware that the pie is bigger and everybody obviously wants a bigger share of that pie," said analyst Victor Flores of HSBC Securities in New York. Major strikes in 2006 drew global media attention to the fact that mine workers negotiating new contracts were holding out for higher bonuses, salaries and other benefits. At Escondida, the world's largest copper mine and majority-owned by miner BHP Billiton , 2,052 workers were on strike for 25 days in August before the company gave them a 5 percent pay rise and a $17,000 bonus. In November and December Chile's Codelco, the world's largest copper producer, will negotiate new contracts with about 7,000 workers at its two largest divisions, and metals traders are nervous about potential strike action. FLASHPOINTS "I think that some of the Codelco workers have a history of striking a hard bargain," said Patricia Mohr, vice-president for industry and commodity market research at Canada's Scotiabank Group. Negotiations at Codelco's Andina and Codelco Norte divisions are the next potential flashpoints in the global diary of labor concerns because the operations comprise about 1.3 million tonnes of annual copper output. In Canada in recent days Teck Cominco and the union representing workers at its Highland Valley copper mine reached a tentative labor contract, narrowly avoiding a strike. In Zambia, disputed election results could spur copper production problems for several months due to wildcat strikes and go-slows in sympathy with opposition leader Michael Sata. "We've had to strike annually since 2002 and we envisage more strikes here and within Peru's mining industry," said Julio Ortiz, head of the union at Chinese-owned Shougang Hierro Peru iron mine in southern Peru. Workers at Shougang went on strike in June to demand higher pay and only went back to work after the government mandated a pay rise. Demand for skilled labor is forcing the cost of the human commodity up alongside with the equipment and fuels needed to operate the world's billion-dollar projects. Analysts say its impossible to say how much more labor is figuring in overall production costs because conditions differ from mine to mine. "I think rising costs and especially in terms of capital projects, all the capital input costs have been rising dramatically and in most parts of the world," said Bernard Swanepoel, chief executive of Harmony Gold Mining , the world's fifth largest gold company. "There's virtually nothing in the mining resource sector that isn't higher than it was a few years ago, and labor is one of those things," said Jim Gill, chief executive of Canadian mid-size copper miner Aur Resources . Industry watchers say the search for skilled labor has seen companies in the United States run advertisements for talent in local newspapers and poach each others' workers in Australia. "Higher prices create greater expectations," said HSBC analyst Flores. (Additional reporting by Robin Emmott in Lima and Rachelle Younglai in Toronto) ca.news.finance.yahoo.com

To: ms.smartest.person who wrote (1511)	10/6/2006 4:56:12 PM
From: ms.smartest.person	Read Replies (3) \| Respond to of 3198

&#8362 David Pescod's Late Edition October 6, 2006 CORRIDOR RESOURCES (T-CDH) $5.51 +0.01 CONNACHER OIL & GAS (T-CLL) $3.34 -0.07 CGX ENERGY (V-OYL.U) $0.29 -0.02 This was the week of COPIC, where some of the major Canadian oil producers get together and tell their stories on Bay Street to some of the big money managers. It’s also a time for industry veterans to get together and exchange gossip in the boardrooms and bars. Our man on the scene was Kerry Sully, the ex-Ranchmen’s boss and we went to him today for an update on some of the stories he follows and likes best and also his feeling for the industry right now. We were hoping he was going to give us a little handholding because this has been more than a correction we’ve been going through. It’s been downright ugly! But instead of doing a little hand-holding, Sully disappointed us and suggested that “with the big inventory for both oil and gas, we could see three to five months of this before the economy runs through that excess supply.” Unless there’s some geopolitical event! “Patience might be the key,” he suggests and he reminds us that even $50.00 oil—”most companies should be able to make a lot of money” and he wouldn’t be surprised if most oil and gas producers these days are being priced as if oil was $50 anyway! As far as stories that he follows, he suggested the news out today on Corridor Resources is pretty important as they finally get their okay to build their pipeline in New Brunswick from their McCully play. “This is important as this should give them some production and cash flow starting February,” Sully suggests. He also suggests that being so close to Boston and New York means they should be getting better prices for their gas than many of the Western Canadian producers with the big pipeline costs. As far as trying to find a cheap, but potentially exciting story at this COPIC like he did a while ago with Connacher Oil & Gas, he suggests Redcliffe Exploration (REL.A/B) is an interesting story and although it currently has no production and no reserves, they are currently drilling some wells that could give this company some credibility quickly. “The company is just listed, but has some significant backing by some of Bay Street’s brokerages” Sully suggests. As far as Connacher, which has been one of his favorite stories, he simply suggests that “there is getting to be so much value there” that when we press him to make a prediction on Connacher and where it might be by Christmas of 2007, he suggests that “it will be taken out by Christmas 2007 at probably $10 a share.” There’s always a chance he could be right and needless to say, we hope he is. As far as his own company CGX Energy, which has been locked up for almost seven years now in a border dispute between Guyana and Suriname, he suggests “they are not too far away from a final solution to this border dispute” and it’s an important story as they have some targets offshore Guyana that are in disputed areas that could come close to a billion barrels. At least that what the squiggly lines on 3-D might suggest. They also have other targets offshore Guyana and what could become even more interesting to CGX in the 9 million or so acres offshore Guyana, is the significant discoveries being made on the Venezuelan side of the Guyana/Venezuela border and one might wonder if that border comes into doubt at some time as well. Sully tells us that “sometime in December, you should see the last formal step in the process for the U.N. Law of the Sea discussion that should come up with a decision and put these problems to rest, finally.” CGX does have close to 100 million shares outstanding and it would be interesting to see what kind of deal might take place. “One of the benefits of the current lower oil & gas prices is suddenly, if you need services, they are suddenly becoming available and prices are not as tough as they were just a while ago as well,” Sully suggests. If you would like to receive the Late Edition, just e-mail Debbie at debbie_lewis@canaccord.com