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Anglo's FY'17 profit doubles on strong commodity prices, cost controls

TOP NEWS

Anglo's FY'17 profit doubles on strong commodity prices, cost controls

Anglo American Plc posted a 99% year-over-year surge in profit attributable to shareholders for 2017 to US$3.17 billion, or US$2.45 per share. The company increased the dividend for the second half of 2017 to 54 U.S. cents per share, from 48 cents in the first half, for a total dividend of US$1.02 per share for 2017. The company managed to cut its net debt by 47% to US$4.5 billion, driven by US$4.9 billion of attributable free cash flow.

Barrick approves new projects to add more than 1 Moz of gold to annual output

Barrick Gold Corp. outlined a potential increase of 1 million ounces in its average annual gold production starting in 2021. Annual gold output between 2019 and 2022 is estimated at 4.2 million to 4.6 million ounces, with all-in sustaining costs of between US$750/oz and US$875/oz. The miner approved three feasibility-level projects at its Turquoise Ridge, Cortez Deep South and Goldrush mines in Nevada, while optimization on a fourth project to extend the life of the Lagunas Norte mine in Peru remains underway.

Newmont sinks deeper into red in Q4'17 on charges from US tax reforms

Newmont Mining Corp. posted a net loss attributable to shareholders of US$527 million for the fourth quarter of 2017, widening year over year from a loss of US$344 million. The quarterly loss included net tax adjustments of US$1.30 per share, including noncash charges of US$346 million related to a remeasurement of U.S. deferred tax assets and liabilities as well as US$395 million related to tax restructuring following the enactment of the U.S. tax reforms in December 2017. The company's attributable gold production rose 1% to 1.3 million ounces in the quarter.

DIVERSIFIED

* Anglo American CEO Mark Cutifani told Miningmx that the company's board agreed that he should continue in the position. "I always said I would review my position after five to seven years, but the board agreed that I should keep on going. [We have] not put an end-date on it yet," Cutifani said.

* Rio Tinto plans to move some of its support staff as it forms three global hubs as well as a commercial and marketing hub in Singapore, Reuters reported. The company started consultations with the London-based employees as some roles would be moved to one of the three hubs. The miner, however, said that it was not changing its operating model.

* Kazakh miner Eurasian Resources Group Sàrl is working with VTB Capital and Rothschild on a plan to spin off and list some of its assets to partially repay its debt, Reuters reported, citing sources. "The company needs to raise cash and is looking to spin off some of its assets, most likely the ferrochrome and power ones, and list them," one source said. The company is also said to be looking to tap Chinese or Japanese shareholders to invest in up to a 20% stake in the assets, another source said.

* BHP Billiton Group CEO Andrew Mackenzie said the company will not transfer its marketing hub in Singapore, where it pays lower taxes, even if the Australian government reduces corporate taxes, Reuters reported.

BASE METALS

* KAZ Minerals PLC's net profit in 2017 surged to US$447 million from US$177 million in 2016. The increase in profit was mainly due to greater contributions from the ramp-up of the Bozshakol and Aktogay operations, partially offset by interest costs.

* Nyrstar NV swung to a €47 million net profit in 2017, thanks to a €126 million impairment reversal, compared to a €414 million loss in 2016, which included a €266 million impairment loss. Underlying EBITDA rose 5% year over year to €205 million, underpinned by higher zinc prices and increased production, among others.

* Cobalt has been the standout commodity over the past 12 months, and analysts at the RIU Explorers Conference in Fremantle, Western Australia, believe that it will continue to attract risk capital with more floats expected on the ASX in 2018. Despite the major need for cobalt, Patersons Securities' senior resources analyst Simon Tonkin warned Australian investors that while some of Australia's cobalt players have significant value in their share prices, "investors should be cautious because cobalt can sometimes be difficult to recover."

PRECIOUS METALS

* Sibanye Gold Ltd. scrapped the final dividend for 2017 as it looks to preserve cash after swinging to a loss in 2017. For the final six months of 2017, the company's attributed profit was 366.3 million rand, down from a year-ago profit of 3.14 billion rand. In line with its forecast, Sibanye's full-year loss came in at 4.44 billion rand, compared to a 2016 profit of 3.47 billion rand.

* Meanwhile, Sibanye CEO Neal Froneman warned Lonmin Plc that failing to deliver on the restructuring plans would see the withdrawal of Sibanye's all-share offer for the platinum miner, Miningmx reported.

* Barrick Gold executives said the company will not make acquisitions just to sate growth calls. Chairman John Thornton said the miner considered several deals over the past year that offered growth but passed on them all, Reuters wrote.

* OceanaGold Corp. posted record net profit of US$88.6 million and US$171.7 million in the fourth quarter and full-year 2017, respectively, as a result of record full-year output. The company's revenue reached record highs of US$246.1 million in the fourth quarter and US$724.4 million for full year 2017.

* Venezuelan President Nicolas Maduro said the country plans to launch a cryptocurrency backed by precious metals called "petro gold," Reuters reported.

* Endeavour Silver Corp. is targeting a 25% increase in annual silver equivalent production at the El Compas gold-silver mine in Mexico, compared to the metrics outlined in the March 2017 preliminary economic assessment.

* GoldMining Inc.'s BRI Mineração Ltda. subsidiary agreed to acquire 66.66% of the existing 4% net production royalty at the Cachoeira gold project in Brazil.

* Goldplat Plc signed a final settlement agreement with Rand Refinery Pty. Ltd., ending a dispute between the two companies over a silver sulfide processing agreement. Goldplat did not disclose the settlement amount payable by Rand Refinery.

* Carbine Resources Ltd. decided to minimize expenditure at its Mount Morgan gold-copper project in Queensland, Australia, after an economic review estimated that the all-in sustaining costs, or AISC, would increase. The ASX-listed company's shares were down 56% by trading close on the day of the announcement. The company expects AISC for Mount Morgan to increase to A$862 per ounce, from A$549/oz estimated in the December 2016 feasibility study.

* B2Gold Corp. posted an initial resource estimate for the Toega deposit at its Kiaka gold project in Burkina Faso. At a cutoff of 0.6 g/t of gold, the deposit hosts inferred resources containing 1.13 million ounces of gold within 17.5 million tonnes of ore grading 2.01 g/t, indicating open pit potential.

* Mining is scheduled to start Oct. 1 at the Geko gold property in Western Australia after Bulletin Resources Ltd. moved to resolve all legal disputes between its Gekogold Pty Ltd. unit and Coolgardie Minerals Ltd., which secured all necessary approvals in mid-January.

BULK COMMODITIES

* Finland's Financial Supervisory Authority ordered Afarak Group Oyj and shareholder Danko Koncar to launch a takeover bid of at least €2.50 per share for the company's shares or pay a €40 million fine. The fine will increase by €10 million each month the takeover bid is not launched.

* Adani Enterprises Ltd. is again considering selling a minority stake in the Carmichael coal mine in Queensland, Australia, after it said it would be unable meet a March deadline to secure up to A$3 billion in financing for the controversial project, Bloomberg News reported.

* Glencore Plc CEO Ivan Glasenberg disputed concerns that a proposed deal to acquire a 49% stake in Yancoal Australia Ltd.'s Hunter Valley Operations will lead to an excessive consolidation of coal supply as a regulatory approval from the Japan Fair Trade Commission remains the last hurdle to close the deal, The Australian Financial Review reported.

* South Africa's power producer Eskom said the Optimum coal mine started business rescue proceedings, without detailing what the proceedings entailed, Reuters reported. The Gupta family-owned mine supplies coal to one of the utility's power stations.

* The government of Burkina Faso is seeking a new partner for the development of the Tambao manganese mine after its partnership with Pan African Minerals Ltd. fell through, Bloomberg News reported, citing the country's mining minister. Tambao is said to be the world's biggest manganese deposit, with estimated reserves of 100 million tonnes valued at US$1 billion, the report added.

* Champion Iron Ltd. subsidiary Quebec Iron Ore Inc. restarted operations at the Bloom Lake iron ore mine in Quebec on Feb. 16, ahead of schedule and within budget.

SPECIALTY

* Novatek completed the purchase of PJSC Alrosa's gas assets, including JSC Geotransgaz and Urengoy Gas Co. LLC. Novatek recently won the auction for the assets with a 30.3-billion-Russian-ruble bid, Vedomosti reported.

* PepinNini Lithium Ltd. secured an option from LSC Lithium Corp. unit LitheA Inc. to acquire the Mina Patilla lithium project in Argentina's Salar de Pular.

* The Portuguese government is demanding a meeting with Spain to discuss the latter's plan to open a uranium mine near the Portuguese border, Xinhua News Agency reported, citing Joao Matos Fernandes, Portugal's environment minister. Fernandes said Portugal has made several information requests that have been ignored or insufficiently addressed.

INDUSTRY NEWS

* A looming overhaul of Canada's environmental permitting regime has stoked fears of delays and a slump in investment in the natural resource sectors, while some in the industry expect companies will adapt to the proposed legislation without major consequences. The country plans to reshape the federal permitting process for major natural resource projects through a new bill which was first outlined Feb. 8. Among key changes are requirements for more consultation with Canada's First Nations, assessment of climate change impact and analysis of gender balance.

* Macquarie Group Ltd.'s head of banking, Greg Ward, said the company has been threatened with a class action lawsuit over allegations that some of its brokers and advisers manipulated stock prices of Cleveland Mining Co. Ltd. or failed to act on clients' instructions over the stock's price movement.

* Mining floats on the ASX are set to surge to levels not seen in 20 years, with the window wide open for capital raisings and miners jumping at the chance with about A$360 million in raisings already underway, analysts said. Patersons Securities' senior resources analyst Simon Tonkin predicted between 30 to 60 new floats in 2018 after IPOs soared from seven in 2016 to 25 in 2017. "Investors are looking for the next big commodity. Cobalt has been the latest one, but there are others like vanadium, as risk capital has returned to the small-cap space," Tonkin said at the RIU Explorers Conference in Fremantle, Western Australia.

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.