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Sibanye sees 1.5B rand in annual synergies on Lonmin acquisition

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Sibanye sees 1.5B rand in annual synergies on Lonmin acquisition

TOP NEWS

Sibanye sees 1.5B rand in annual synergies on Lonmin acquisition

Sibanye Gold Ltd.'s proposed acquisition of South African platinum group metals producer Lonmin Plc will be "earnings enhancing by 2021," CEO Neal Froneman said. Sibanye has agreed on terms of an all-share offer to wholly acquire Lonmin, valuing the company at about £285 million. In terms of earnings, he said pretax synergies would amount to approximately 1.5 billion South African rand per year by 2021. This will include overhead costs of 730 million rand per year, which is a conservative estimate, according to Froneman.

ArcelorMittal sues Kazakhstan striking miners in pay dispute

ArcelorMittal's Kazakh subsidiary ArcelorMittal Temirtau is suing hundreds of striking workers who are staging an underground sit-in over a pay dispute, the company's press office told S&P Global Market Intelligence. According to the latest figures, the company said that 400 people are still striking underground in the Kazakstanskaya, Tentekskaya and Lenina mines. The strike action has ceased at ArcelorMittal's other operations in Kazakhstan.

Chile election puts pressure on top lithium producer SQM

Analysts consider the outcome of Chile's looming election as critical to the world's top lithium producer, Sociedad Quimica y Minera de Chile SA, or SQM, in resolving its ongoing battle with the Chilean government's Production Development Corporation over ground leased by SQM in the Salar de Atacama for the production of lithium, among other things, and helping it secure a new contract over the ground. If SQM does not eventually get a new contract covering the Salar de Atacama, its lithium production will drop off a cliff, assuming it does not develop other projects in the meantime. It would also lose a highly profitable revenue stream.

DIVERSIFIED

* UBS lifted its target price for BHP Billiton Group stock to A$31.50 per share, increasing from A$30 per share, while maintaining a buy rating on the stock, The Sydney Morning Herald reported. "We believe another wave of cash returns to shareholders is likely in the February 2018 reporting period. The continuation of this theme is likely to continue to attract the marginal global investor, who we believe is underweight mining, back to the sector," the investment bank said.

BASE METALS

* Moly Mines Ltd. plans to make a conditional off-market takeover bid for all Queensland Mining Corp. Ltd. shares at 17 Australian cents apiece, which represents a premium of 49.12% to the 30-day volume-weighted average price of 11.4 cents per share as of Dec. 14. Queensland Mining directors unanimously recommend its shareholders to accept the takeover bid in the absence of a superior proposal.

* PT Timah (Persero) Tbk. struck a joint-venture deal with Nigeria's Topwide Ventures Ltd. to develop a tin mining site in the West African country, The Jakarta Globe wrote. The Indonesian state-owned firm, meanwhile, said its revenue in the first nine months of 2017 soared 44.17% on a yearly basis to 6.6 trillion Indonesian rupiah, while its net profit jumped to 300.57 billion rupiah from 50.65 billion rupiah a year ago.

* South32 Ltd. has committed to fund the US$10 million 2018 program and budget for the Bornite property, which forms part of Trilogy Metals Inc.'s copper-prospective Upper Kobuk Mineral Projects, or UKMP, in Alaska. South32 in April secured an option to form a 50/50 joint venture with Trilogy over UKMP by investing at least US$150 million.

* Clive Palmer is blaming Malcolm Turnbull for the demise of his Queensland refinery business, arguing the Australian government allowed the country's businesses to flounder while China propped up its resources sector, The Australian wrote, citing a February 2016 letter from Palmer. "We have to remember that 22,000 jobs have been lost in Queensland in the resource industry because of declining resource prices, international manipulation of those prices and the failure of the government to even be alive to these issues," Palmer wrote.

* Industry sources told Metal Bulletin that a three-week strike at Southern Peru Copper Corp., or SPCC, has had no material effect on the company's copper output. Workers have blocked the railroad used by SPCC to ship concentrates from its mines, but one source says the company is operating within its normal schedule for shipments.

* An ongoing strike at Empresa Nacional de Minera's operations in Chile is also affecting five of its copper processing plants, which have run out of sulfuric acid, Metal Bulletin wrote. The company announced earlier in the week that it had suspended operations at its Paipote smelter due to the strike led by the Sindicato No. 2 de Trabajadores union.

* Higher copper prices and stable power supply are expected to help boost Zambia's copper production to between 800,000 tonnes and 850,000 tonnes this year from 774,290 tonnes in 2016, Reuters wrote, citing mines minister Christopher Yaluma. Output is likely to grow further to reach 1 million tonnes in 2018, the minister added.

PRECIOUS METALS

* Following the takeover bid for Lonmin, RBC Capital Markets upgraded Lonmin shares to sector perform from underperform with a target price of £1 per share from 50 British pence each. The analysts said they had expected Sibanye-Stillwater to eventually make a bid for Lonmin given that this was, in their view, its fourth and final step in the PGM strategy, which started with the acquisition of the Rustenburg operations from Anglo American Platinum Ltd. in 2015.

* Sunvest Minerals Corp. signed a definitive deal with an arm's-length vendor to acquire the Parrott Lake silver property in British Columbia for 4 million shares and C$100,000 cash to be settled over a six-month period.

* Cornerstone Capital Resources Inc.'s security holders approved the previously announced spinoff of all its assets, except its interest in the Cascabel copper project in Ecuador and shares of SolGold Plc, into a new exploration company called Cornerstone Exploration Inc. The transaction remains subject to court approval as well approval by the TSX Venture Exchange.

* International Prospect Ventures Ltd. agreed to acquire New South Wales company Valroc Ventures Pty Ltd. in all-share deal. The companies previously agreed to jointly purchase eight gold-prospective claims in Western Australia's Pilbara region.

* Explor Resources Inc. expanded its Ogden gold project in Ontario via the acquisition of two mining claims totaling 48.56 hectares for C$2,000 and 100,000 shares. The property now comprises 23 mining claims and seven patented mining claims covering about 2,007 hectares.

* Gascoyne Resources Ltd. signed flat forward gold sales contracts with Commonwealth Bank of Australia and the National Bank of Australia covering 164,000 ounces of gold production from its Dalgaranga project in Western Australia, at a delivery price of A$1,712 per ounce. The banks are also providing a A$60 million loan facility for the project's development.

* A feasibility study on Alamos Gold Inc.'s Lynn Lake gold project in Manitoba defined an after-tax net present value of US$123.4 million, at a 5% discount rate, and an internal rate of return of 12.5%. Total production is pegged at 1.5 million ounces of gold and 1.3 million ounces of silver over a 10.4-year mine life.

* Pure Gold Mining Inc. announced the addition of resources from two satellite deposits at its Madsen gold project in Ontario. The inclusion of the Russet South and Fork deposits adds 96,000 ounces of gold to indicated resources at Madsen, with 118,000 ounces added to inferred resources.

BULK COMMODITIES

* Vedanta Ltd. plans to raise about 5 billion Indian rupees via the issuance of nonconvertible debentures and is holding a meeting of its committee of directors on Dec. 19.

* National Australia Bank Ltd., or NAB, stepped up its fight to tackle climate change, vowing to stop funding new thermal coal projects and increase lending to renewable energy projects. "While we will continue to support our existing customers across the mining and energy sectors, including those with existing coal assets, NAB will no longer finance new thermal coal mining projects," the bank stated.

* Rogue Resources Inc. closed the previously announced purchase of the Snow White quartz project in Ontario from a Sudbury-based prospector for C$25,000 and 150,000 shares. The Snow White property consists of three staked mining claims representing approximately 160 hectares.

* ASX-listed Kore Potash Ltd. intends to seek a secondary listing on the Johannesburg Stock Exchange, in addition to plans to list on London Stock Exchange's AIM market. Both listings are likely to be completed in early 2018.

* Norsk Hydro ASA decided to upgrade and start up the second production line at the Husnes smelter in Norway, which will double the production of primary aluminium at the operations to about 190,000 tonnes of aluminum per year.

* Fertoz Ltd. signed a memorandum of understanding to advance the use of its organic rock phosphate blends into Providence Grain Group Inc.'s grain and inputs business. The companies are working on turning the MOU into a definitive distribution and sales agreement centered on the prairie provinces of Canada.

* The number of small coal mines in China with a capacity of less than 300,000 tonnes has fallen by nearly half since last year, and the country's total coal mines have dropped to 7,000 from 10,800 since 2015. A senior official with the National Development & Reform Commission, meanwhile, said China's plan to phase out 800 million tonnes of obsolete coal capacity between 2015 and 2020 may be achieved by 2018, China News wrote.

SPECIALTY

* Albemarle Corp. agreed to divest its polyolefin catalysts and components business to W. R. Grace & Co. in a US$416 million deal. As part of the transaction, Grace will assume the lease and operations at the Product Development Center in Louisiana, and operations at the South Korea site.

* Nemaska Lithium Inc. signed a definitive agreement to sell its Sirmac lithium project in Quebec to ABE Resources Inc. for C$250,000 in cash and 15 million common shares, along with an assumed pre-existing 1% net smelter royalty on certain Sirmac claims. Meanwhile, Nemaska said it received the mining lease for its Whabouchi lithium project in Quebec from the Ministry of Energy and Natural Resources.

* The environmental court of Antofagasta in Chile ordered SQM to temporarily and partially close the water extraction wells located in the Salar de Llamara. The company expects a negative impact targeted production capacity of 14,000 tonnes per year of iodine that is under construction.

* Energy Metals Ltd. estimated a JORC 2012-compliant maiden resource at the Malawiri deposit, part of its Ngalia Regional property in Australia's Northern Territory.

* Black Rock Mining Ltd. tapped CPC Project Design to conduct a definitive feasibility study for its Mahenge graphite project in Tanzania. The engineering study will commence in early January 2018.

INDUSTRY NEWS

* The creation of an attractive policy, regulatory and governance environment in South Africa's mining industry could lead to substantial growth in annual investment, Mining Weekly reported, citing a recently conducted survey from the country's Chamber of Mines.

The Daily Dose is updated as of 7 a.m. Hong Kong time, and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.