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Freeport-McMoRan returns to US$292M profit in Q4'16

TOP NEWS

Freeport-McMoran swings to US$292M profit in Q4'16

Freeport-McMoRan Inc. swung to a fourth-quarter 2016 net profit of US$292 million, from a year ago net loss of US$4.08 billion. Revenue during the quarter rose to US$4.38 billion from US$3.52 billion a year ago, thanks to higher average realized prices for metals. Consolidated copper production in the period rose to 1.20 billion pounds from 1.12 billion pounds produced in the prior year. Meanwhile, CEO Richard Adkerson said the company may have to curtail costs by mid-February at its Grasberg copper-gold mine in Indonesia should the company fail to secure a copper export permit, with large layoffs and CapEx cutbacks on the cards.

Barrick hits upper end of FY'16 gold production target

Barrick Gold Corp. produced 5.52 million ounces of gold in 2016, hitting the higher end of its guidance range of 5.25 million to 5.55 million ounces, but lower than the 6.1 million ounces of gold produced in 2015. Production for the final quarter of 2016 totaled 1.52 million ounces of gold, down year over year from 1.62 million ounces. Barrick's full-year, all-in sustaining costs are expected to be at or slightly below the lower end of its guidance range of US$740 per ounce to US$775 per ounce of gold.

Kumba shares up on expected jump in FY'16 earnings

Shares in Kumba Iron Ore Ltd. rose more than 9% after the company said its headline EPS for the year ending December 2016 is likely to be in the range of 26.36 South African rand to 27.72 rand, between 123% and 125% higher on a yearly basis. It attributed the expected increase to higher iron ore export prices, as well as a 5.98 billion rand impairment booked in 2015. The Anglo American Plc unit will report full-year earnings Feb. 14.

DIVERSIFIED

* Analysts at Citigroup said Rio Tinto is expected to announce a capital restructuring program including a potential increase in shareholder returns when it releases fiscal year earnings Feb. 8, following the company's US$2.45 billion sale of its Australian coal unit to Yancoal Australia Ltd., The Australian Financial Review reported. However, UBS analysts believe that the global mining giant will reserve the cash, considering the uncertain outlook, and step up dividends in 2018.

BASE METALS

* Antofagasta Plc posted a 12.5% increase in copper production in 2016, to 709,400 tonnes, and a 26.6% jump in gold production to 270,900 ounces, on a yearly basis. The company expects to produce 685,000 tonnes to 720,000 tonnes of copper, 185,000 ounces to 205,000 ounces of gold and 8,500 tonnes to 9,500 tonnes of molybdenum in 2017.

* Indonesia's Papua province, which hosts Freeport-McMoRan's Grasberg mine, prevailed in a court battle against the company over 2.51 trillion Indonesian rupiah in outstanding surface water taxes, Reuters reported. Freeport's local unit and Grasberg's operator lodged the claim for taxes on water it used from the Aghawagon and Otomona rivers between 2011 and mid-2015.

* Vedanta Resources Plc priced its offering of US$1.0 billion in bonds due 2022 at 6.375%. Proceeds will fund its cash buyback of up to US$1.95 billion in outstanding notes, which received valid offers totaling about US$795.9 million.

* PJSC MMC Norilsk Nickel approved the sale of up to a 39.32% stake in the Bystrinskoye copper project to a Russia-focused natural resources fund, CIS Natural Resources Fund, established by Interros Group and ESN Group. The project is being valued at US$730 million for the transaction.

* All conditions related to the US$210 million sale of MMG Ltd.'s Golden Grove polymetallic project in Western Australia are now satisfied. The sale will be completed Feb. 28.

* Jiangxi Copper Co. Ltd. expects its net profit attributable to shareholders to increase by 40% to 60% in 2016, compared to the year-ago net profit that totaled 637.2 million Chinese yuan.

* Rambler Metals & Mining Plc expects to produce 5,100 tonnes to 5,800 tonnes of copper and 4,400 ounces to 5,100 ounces of gold in full-year 2017. In 2016, the company produced 4,174 tonnes of copper and 6,132 ounces of gold.

* Adventus Zinc Corp. filed a final prospectus with the securities regulatory authorities in the provinces of Newfoundland and Labrador, Ontario, Alberta, and British Columbia for its proposed IPO. The company will issue 6 million common shares at 50 Canadian cents each in the IPO, which is expected to close Feb. 7.

PRECIOUS METALS

* Independence Group NL swung to a net profit after tax of A$10.2 million in the second quarter of its fiscal 2017, up from a net loss after tax of A$28.1 million a year earlier. Revenue for the quarter totaled A$128.5 million, up year over year from A$98.4 million.

* Endeavour Silver Corp. expects to produce between 5.2 million ounces and 5.7 million ounces of silver and between 50,000 ounces and 53,000 ounces of gold at its three Mexican mines in 2017.

* Fresnillo Plc expects silver production of 58 million ounces to 61 million ounces, including 4 million ounces from Silverstream in 2017. Gold production is expected at between 870,000 ounces and 900,000 ounces, mainly due to the stabilization of production at Herradura mine in Mexico, following the reduction in inventories.

* MacPhersons Resources Ltd. updated the mineral resource at its Boorara gold project in Western Australia to 5.95 million tonnes grading 1.2 g/t of gold for 232,000 ounces of gold at a 0.4 g/t of gold cutoff. This compares to a previous estimate of 10.8 million tonnes at 0.99 g/t of gold for 341,500 ounces, but at a cutoff of 0.3 g/t of gold.

* An NI 43-101-compliant maiden inferred resource estimate for Lumina Gold Corp.'s Cangrejos gold-copper project in Ecuador pegged 191.8 million tonnes grading 0.81 g/t of gold equivalent containing 4 million ounces of gold, 423 million pounds of copper and 4.6 million ounces of silver, at a 0.35 g/t of gold equivalent cutoff.

* De Grey Mining Ltd. announced a 227% increase in the mineral resource at the Mount Berghaus gold prospect, part of the Turner River project in Western Australia.

BULK COMMODITIES

* POSCO swung to a net profit of 1.048 trillion South Korean won for full-year 2016, compared to the year-ago loss of 96 billion won. Revenue for the company dropped to 53.084 trillion won in the year, from 58.192 trillion won in 2015.

* Yanzhou Coal Mining Co. Ltd. unit Yancoal Australia Ltd., which agreed to take over Rio Tinto's Australian coal operation in a US$2.45 billion deal, faces fundraising hurdles as the company asks its Australian investors to pledge a record sum of cash to fund the purchase, The Australian wrote. The parent has already committed a US$1 billion to Yancoal, but local investors would still need to deliver up to A$1.9 billion in fresh equity to fund the transaction.

* British Steel is targeting between a 20% and 25% year over year improvement in turnover by the end of its financial year on March 31, 2017, on the back of additional cost savings and enhanced product quality and service offering, Metal Bulletin reported. The company is targeting EBITDA of around £100 million by its third year, compared with losses of about £80 million in the 2015-16 financial year on revenue of approximately £1.25 billion, the Financial Times reported.

* Separately, The Guardian wrote that the company in June will restore full pay for workers, who had agreed to a 3% salary cut at the time of the takeover to keep operations running.

* Alcoa Corp. is waiting for a clearer picture on U.S. President Donald Trump's planned tax reforms before deciding if a restart of its idled aluminum smelters could be a possibility.

* BC Iron Ltd. revised its fiscal 2017 EBITDA guidance for its Iron Valley mine in Western Australia to between A$18 million and A$25 million, after posting EBITDA of A$8.1 million for the December 2016 quarter after record iron ore shipments of 2.1 million wet tonnes.

* Wuhan Iron & Steel Co. Ltd. expected to swing to a net profit attributable to shareholders of about 406 million Chinese yuan in 2016, from a net loss of 7.51 billion yuan posted a year earlier.

* Chongqing Iron & Steel Co. Ltd. expects to book a net loss of about 4.38 billion Chinese yuan for the full-year 2016, narrowing from a net loss of 5.99 billion yuan in 2015. The expected loss is mainly attributed to the company's failure to realize scale production and high-fixed costs, including depreciation and finance expenses.

* Tata Steel Ltd. struck a deal to acquire a majority stake in Creative Port Development Private Ltd. to help advance the proposed development of the Subarnarekha Port at Chaumukh village of Balasore district in Odisha, India.

* China's Ministry of Environmental Protection proposed to suspend about one-fifth of the country's alumina production capacity across three provinces to fight air pollution over the winter season, a move that will create shortages of alumina but will have little impact on aluminum supply, Bloomberg News reported. The targeted period in the draft policy runs from November to March, when pollution increases due to coal-fired heating.

* Wood Mackenzie warned that the U.S. President Donald Trump's move to exit the Trans-Pacific Partnership free-trade deal will have little immediate impact on the country's steel industry, though the long-term effects are likely to be significant, Mining.com reported.

* Arianne Phosphate Inc. signed a project agreement with Rio Tinto with a view to share maritime services. The companies will discuss using ships serving Rio Tinto to transport phosphate concentrate produced at Arianne's Quebec-based Lac a Paul project to international markets.

* SouthGobi Resources Ltd. said that Khan-Uul District Civil Court of First Instance in Mongolia has dismissed the lawsuit filed by a fuel supplier, Magnai Trade LLC, over alleged outstanding fuel supply payments by the company, on the basis that the parties should resolve the matter through arbitration in Mongolia in accordance with the fuel supply agreement.

* Select Sands Corp. subsidiary American Select Corp. has completed the purchase of an additional 457-acre frac sand property in northeast Arkansas for about US$950,560. The property, dubbed Bell Farm, is located about 3 miles northwest of the company's 520-acre Sandtown project.

* State-run Steel Authority of India Ltd. has begun production at its new US$1.8 million universal rail mill at the company's Bhilai steel plant, which will produce the world's longest single rails, Metal Bulletin wrote.

* The World Steel Association said global crude steel output during 2016 was up 0.8% on a yearly basis to 1.63 billion tonnes, mainly due to the strong recovery in Chinese steel output.

* Polish Mining Group is set to be capitalized by its three shareholders for more than 165 million Polish zlotys, effective Feb. 1, completing the third phase of its capital increase, Puls Biznesu reported.

SPECIALTY

* A preliminary economic assessment on Graphite One Resources Inc.'s integrated Graphite One manufacturing project indicated a pre-tax net present value of US$1.04 billion, at a 10% discount rate, and an internal rate of return of 27%. The project will require total CapEx of US$363 million for mining operations, a processing plant, a manufacturing plant and other infrastructure.

* NioCorp Developments Ltd. reduced the environmental impacts of its proposed Elk Creek superalloy development in Nebraska, which is expected to streamline the permitting process with the U.S. Army Corp. of Engineers. The company said recent metallurgical breakthroughs indicate that materials previously slated for disposal can instead be recycled. A feasibility study is ongoing.

* FinnAust Mining Plc engaged Titanium Industry Global Advisory Pte. Ltd., or TIGA, as a marketing adviser for the company. TIGA specializes in providing strategic and commercial direction to the mineral sands industry with a focus on titanium dioxide feedstocks.

* Estrella Resources Ltd. entered a memorandum of understanding with Tianjin Datong Xintian Investment Co. Ltd. for a strategic partnership regarding mineral asset portfolios in Australia.

* Rainbow Rare Earths Ltd.'s prospectus has been approved ahead of an intended flotation on the London Stock Exchange. The company's focus is the Gakara rare earths project in Burundi and it has already raised about US$8 million to fast-track the project to production, as the first sales of concentrate is targeted by the end of 2017.

INDUSTRY NEWS

* President Donald Trump's team released a priority Emergency & National Security Projects list of 50 initial infrastructure developments in the pipeline, with an investment cost of US$137.5 billion, according to a report by The Kansas City Star. Trump's team has proposed that public-private partnerships, on a 50/50 basis, will provide funding for the planned projects.

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.