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Silver Wheaton announces US$500M financing; Kinross to proceed with Tasiast expansion; Maanshan Iron books loss

Industry Top Trends 2021: Metals and Mining

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020


Silver Wheaton announces US$500M financing; Kinross to proceed with Tasiast expansion; Maanshan Iron books loss

TOP NEWS

Silver Wheaton announcesUS$500M bought-deal financing

entered intoan agreement with a syndicate of underwriters to sell 30,125,000 common shares ata price of US$16.60 apiece on a bought-dealbasis for aggregate gross proceeds of about US$500 million.

Kinross Gold to proceedwith phase one of Tasiast expansion

said it is proceedingwith the phase-one expansion of its Tasiastgold mine in Mauritania. According to the gold major, phase one is expected to mill throughput capacityfrom the current 8,000 tonnes per day to 12,000 t/d, while significantly reducingTasiast's operating costs and increasing production. Based on an assumed gold priceof US$1,200 per ounce and oil price of US$45/bbl, the expansion has an estimatedposttax and unlevered net present value of US$635 million and an internal rate ofreturn of 20%, and is expected to generate US$1.16 billion in free cash flow overthe life-of-mine.

Maanshan Iron & Steelbooks 4.8 billion yuan loss in FY'15

's2015 full-year net loss attributable to shareholders of the parent totaled 4.80billion Chinese yuan, swinging from a profit of 220.6 million yuan booked in 2014.Group revenue also fellto 45.11 billion yuan, from 59.82 billion yuan in 2014, mainly attributed to theprice decline of steel products during the year.

DIVERSIFIED

 * Moody's retained its Baa3 investment-grade ratingfor Glencore Plc, citing the mining giant's robustearnings and cash flows from its trading operations, strong liquidity position andaccess to working capital funding from the banks, as well as expectations that itwill deliver further debt reduction in 2016. The rating agency expects Glencore'strading arm to contribute about a third of the company's consolidated EBITDA in2016-2017 and that Glencore's leverage will improve this year as it acceleratedplans to slash net debt by US$7.5 billion to US$8.5 billion.

BASE METALS

* 'sToromocho projectin Peru produced 763,500 tonnes of copper concentrates, while contained copper andsilver output reached182,288 tonnes and 5.3 million ounces, respectively.

* Glencore's Mopani Copper Mines unit saidthe mining giant is planning to invest over US$1.1 billion to sink three shaftsin Zambia with new technology that will extendmine life by more than 25 years, Reuters wrote.

* said it expectsto posta loss for its fiscal year ending March 31, swinging from the profit recorded inthe preceding financial year. The company attributed the loss to significantly lowerrevenues derived from its copper mining business and impairment losses on the samesegment, among others. It will review options for its copper mining business, includingdownscaling operations, outsourcing some operational activities and suspending productiontemporarily in the next few months.

* said it is a joint venture agreementwith Minera Activa on the Filipina copper project in Chile.

* A scoping study on PNXMetals Ltd.'s HayesCreek zinc-gold-silver project in Australia's Northern Territory a pretax net presentvalue at a 10% discount rate of A$109.4 million, an internal rate of return of 58.0%and a payback period of 1.8 years.

* Chileancopper commission Cochilco said leading global copper suppliers are struggling todetermine how changes in China's unreported stocks of copper will affect globalsupply and demand balances, The Sydney MorningHerald wrote.Cochilco research director Jorge Cantallopts said, "There is this expectationthat demand in China will help to power the market ahead in the next few years assome of the supply starts to be stripped away. But we are not so sure that willbe the case. The inventories and collateral issue plays into this cloudy picture."

PRECIOUS METALS

* entered intoan agreement with a syndicate of underwriters to sell 30,125,000 common shares ata price of US$16.60 apiece on a bought-dealbasis for aggregate gross proceeds of about US$500 million.

* said it is proceedingwith the phase-one expansion of its Tasiastgold mine in Mauritania. According to the gold major, phase one is expected to mill throughput capacityfrom the current 8,000 tonnes per day to 12,000 t/d, while significantly reducingTasiast's operating costs and increasing production. Based on an assumed gold priceof US$1,200 per ounce and oil price of US$45/bbl, the expansion has an estimatedposttax and unlevered net present value of US$635 million and an internal rate ofreturn of 20%, and is expected to generate US$1.16 billion in free cash flow overthe life-of-mine.

* booked a net loss of US$6.8 million for the year ended Dec. 31, 2015, reversingthe net income of US$41.9 million a year ago. The company's revenues for the 12-monthperiod, however, increased22% year over year to US$339.9 million.

* 's net earningsfor the year ended Dec. 31, 2015, surged610% year over year to C$32.3 million, due largely to increased gold productionand sales volume, higher ore grades and improved operating efficiencies.

* booked a lossattributable to equity shareholders of the company of about 462.2 million Chineseyuan for the year ended Dec. 31, 2015, reversing the 33.7 million yuan profit reporteda year ago. The company's revenue for the 12-month period, meanwhile, slid to 5.76billion yuan from 6.50 billion yuan a year ago.

* Sandstorm GoldLtd.'s 2015 fourth-quarter netloss amounted to US$25.0 million, compared to net income of US$2.6 millionbooked a year ago.

* saidit is considering the possibility of spinningoff some of its gold mining businesses in a separate company to be listedon the ASX.

* loweredits 2016 gold production guidance for its Chatree mine in Thailand to between 95,000 ounces and 105,000ounces, from between 125,000 ounces and 135,000 ounces, saying that permitting delayshave constrained accessto various orebodies, which has put undue pressure on an ageing mining fleet andimpacted the mine plan.

* said has signed anoption to joint venture agreement to acquirea 70% interest in Millrock's LosChinos and Los Cuarentasgold projects in Sonora, Mexico.

* executed a US$120 millioncredit facility with Macquarie Bank Ltd., which will be put toward the of the gold project in BurkinaFaso.

* 's 50.1%-ownedRomanian subsidiary Sinarom MiningGroup SRL secured a prospecting license, which substantially the total prospecting licensearea at its Manailapolymetallic mine in Romania.

* Kidman ResourcesLtd. signed a binding heads of agreement to sell its Gunga West gold project at its Birthday Gift operation in Western Australia toMetals X Ltd. for up toA$2.5 million.

* 's gold projectin Mexico achieved commercial productionafter running for over 30 consecutive days at an average rate of 9,470 tonnes perday.

* Assuminga base case gold price of US$1,200 per ounce, a definitive feasibility study forAvnel Gold Mining Ltd.'sKalana Main projectin southwestern Mali estimateda posttax net present value at an 8% discount rate of US$196 million, an internalrate of return of 38% and a payback period of 1.2 years from the start of commercialproduction.

* A pre-feasibility study of the Urucum North underground project,part of Beadell Resources Ltd.'sTucano gold minein Brazil, outlined apretax net present value at a 5% discount rate of US$49 million, an internal rateof return of 30% and a payback period of four years.

* Gascoyne ResourcesLtd. said a pre-feasibility study on its Dalgaranga gold operation in Western Australiaconfirmed that it isone of the highest margin undeveloped gold projects in Australia. Assuming a basecase gold price of US$1,200 per ounce, the study pegged net present value at an8% discount rate of A$193 million and an internal rate of return of 90%.

* signedleasing agreements with Caterpillar Finance for the main power generating station,mining loaders and ancillary generators for the water supply pipeline at its silver projectin Russia. According to Silver Bear, favorable terms with Caterpillar Finance helpto reduce CapEx costsat the site.

* acquiredthe Silvershot silver property located in the Golden Triangle near Stewart, BritishColumbia, through staking.

* saidreverse circulation drilling at the M1 South prospect, within the gold project in BurkinaFaso, returned up to 1meter at 349.15 g/t of gold and 1 meter at 113.98 g/t of gold.

* said the holdersof the some US$34.3 million of its US$34.5 million 8% convertible unsecured debenturesdue April 30, 2018, have converted them into common shares prior to the redemption date. The company will issue 10,287shares and pay cash for the accrued and unpaid interest up to the redemption datefor the remaining unconverted debentures. President and CEO Douglas Forster saidthe transaction will see the company becoming "essentially debt free with noadditional future debenture interest payments."

* posted a 49% increasein its measured and indicated resources to 11.6 million ounces of gold and an 80%jump in proven and probable reserves to 5.46 million ounces of gold, as at Dec.31, 2015. The company also said it received a five-year extension to the explorationperiod of its Financial or Technical Assistance Agreement in the Philippines, pavingthe way for conducting exploration activities in the broader region surroundingits Didipio minein the country.

* OreCorp Ltd.announced a maiden JORC2012-compliant mineral resource estimate on the Nyanzaga project in Tanzania of 21.3 million tonnes at 4.1g/t of gold for 2.78 million ounces of gold.

BULK COMMODITIES

* 's2015 full-year net loss attributable to shareholders of the parent totaled 4.80billion Chinese yuan, swinging from a profit of 220.6 million yuan booked in 2014.Group revenue also fellto 45.11 billion yuan, from 59.82 billion yuan in 2014, mainly attributed to theprice decline of steel products during the year.

* IRC Ltd.'sloss attributable to company owners for the year ended Dec. 31, 2015, increased60.2% year over year to about US$509.0 million.

* Accordingto Tata Steel Ltd., thebook value of its lossmaking steel operations in the U.K. — recently put up forsale — was "almost zero,"London's Financial Times reported, citingKoushik Chatterjee, the company's finance director. "We have taken about £2billion of impairment. It is not a valuation exercise, it is a question of reducingan exposure," Chatterjee added. The company has projected that it would takeanother £2 billion of investment to transform the Port Talbot steel plant in theU.K. into a high-quality steel producer for advanced industries. The FT separately reported that potential buyersof Port Talbot are few and far between, with Germany's ThyssenKrupp AG being one of the few candidates.

* Meanwhile,Reuters reportedthat the plan by Tata Steel to put its steelmaking business in the U.K. up for salehas raised expectations of a long-awaited consolidation in the steel sector in Europe.

* CFOZhao Qingchun said the company expects annual coal sales to rise over the next fiveyears to more than 100 million tonnes by 2020. Chairman Li Xiyong noted that thecompany does not plan to export coal products, with its 2020 sales objective at the domestic market.

* UBSanalysts said Fortescue Metals GroupLtd. has both the means and desire to continue to lower its debt burden,and hit its 40% internal gearing target by the end of 2019, citing the company'sincreased rate of debt repurchases amid a slump in iron ore prices, The Australian Financial Review wrote.

* Accordingto Reuters, Mechel OAOis set to hold a shareholder vote in absentia on its proposed debt restructuringon May 26 after the company failedto get a majority shareholder vote on the matter in a previous shareholder meeting,during which the shareholders discussed a two-year-long restructuring process withSberbank, Gazprombank, VTB and a consortium of international lenders.

* TheDistrict Court of Limassol in Cyprus dropped all charges leveled against , certain board membersand company shareholders by a former employee, Alexander Gorbachev. Gorbachev hadrequested the court to declare that he was unlawfullydeprived of the right to ownership of shares in the Russian company.

* AustralianDeputy Prime Minister Barnaby Joyce added to Shenhua Group Corp. Ltd.'s woes relating to its coal mine in NewSouth Wales. Joyce — who also serves as the country's minister for agriculture —said he will use "any ally" he can to ensure that mining will not be allowedon prime agricultural land, such as Watermark's case, ABC reported.

* said it isstill trying to securea forbearance agreement with its lenders and has been unable to make an interestpayment on its US$600 million 8.875% senior notes due 2017.

* Themaiden iron ore shipment from HancockProspecting Pty Ltd.'s RoyHill joint venture project in Western Australia's Pilbara region willarrive in China next week, The Australianreported.

* Employeessacked from Cockatoo Coal Ltd.'sBaralaba coal minein Queensland, Australia, in early February have yet to be paid their entitlements,ABC reported.

* Ina bid to curb cheap supplies from imports, India extended a safeguard duty on somesteel imports up to 2018, though the levies are only meant to be temporarily imposedto protect the local industry from a damaging surge in imports. According to BloombergNews, the Central Board of Excise and Customs saida 20% levy will apply until mid-September and will drop in stages to 10% for thesix months through mid-March 2018.

* Peru'sphosphate production in 2015 rose 2.6% year over year to 11.15 million tonnes whilecoal output grew 10% to 251,789 tonnes, Business News Americas reported,citing the energy and mines ministry.

SPECIALTY

* and executed a definitiveshare purchase agreement to merge their African uranium mineral interests and establishan Africa-focused uranium development company. The deal will see GoviEx acquiringDenison's Rockgate Capital Corp. unit, which holds all of Denison's uranium interestsin Africa, for about 56.1 million GoviEx shares. The transaction is expected to close on or about May 17.

* said it isacquiring the Kibby Basin property in Clayton Valley, Nev. The property is to host lithium,and consists of 13 place claims, totaling about 1,036 hectares in Esmeralda County.

* secured two lithium-prospectivetenements in Western Australia, expandingthe company's lithium tenements in the Pilgangoora district to five.

* Magnis ResourcesLtd.'s bankable feasibility study for its wholly owned graphite project in Tanzaniapegged a posttax netpresent value at a 10% discount rate at US$1.69 billion with an internal rate ofreturn at 98%.

* announced itsmaiden ore reserve estimate comprising 15.2 million tonnes at 660 parts per millionof U3O8 for a total of22.1 million pounds of U3O8 at its MulgaRock project in Western Australia.

INDUSTRY NEWS

* In2015, exploration budgets were again dominated by Canadian and Australian miners,followed by companies from the Rest of the World (Asia, FSU and Middle East), LatinAmerica, Europe, Africa, the U.S. and Pacific/Southeast Asia, according to an exclusivereport by SNL Metals &Mining Research.

* TheThoracic Society of Australia and New Zealand has called for the formation of anational body to monitor the spread of the black lung disease, which is caused bybreathing in excessive levels of coal dust, ABC reported.

* According to The Associated Press, thousands of demonstratorstook to streetsin Mongolia's capital saying the country's mineral wealth has been exploited byoverseas firms.

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