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In This List

Northern Star to buy 50% Super Pit stake for US$800M; Essar Steel's sale closes

Mining Insights Newsletter June 2020

A Decade of Underperformance for Gold Discoveries

State of the Market: Mining Q1-2020

Mining Exploration Insights - April 2020


Northern Star to buy 50% Super Pit stake for US$800M; Essar Steel's sale closes

TOP NEWS

Northern Star to buy Newmont Goldcorp's 50% stake in Super Pit for US$800M

Northern Star Resources Ltd. reached a deal with Newmont Goldcorp Corp. to acquire the latter's 50% stake in the Kalgoorlie Super Pit gold mine in Western Australia, plus associated assets, for US$800 million. The mine is a 50/50 joint venture between Newmont Goldcorp and Saracen Mineral Holdings Ltd. through Kalgoorlie Consolidated Gold Mines Pty Ltd. Northern Star also secured a 120-day option to negotiate the purchase of the former's Kalgoorlie power business for fair market value. The sale is expected to be completed by early January 2020.

ArcelorMittal, Nippon close Essar Steel purchase

ArcelorMittal and Nippon Steel Corp. closed their acquisition of the troubled Essar Steel India Ltd. In October 2018, the companies lodged a winning bid of 420 billion Indian rupees, or about US$5.7 billion at the time, to acquire Essar Steel through India's insolvency process. The joint venture has crude steel capacity of 7.5 million tonnes per annum and iron ore pellet capacity of 14 mtpa. The company plans to increase its finished steel shipments to 8.5 mtpa over the medium term and to between 12 mtpa and 15 mtpa over the long term.

Major tech companies sued over child labor in cobalt mines

Human rights firm The International Rights Advocates filed a suit against major technology companies for "aiding and abetting" the use of young children to mine cobalt in the Democratic Republic of Congo. The lawsuit alleges Microsoft Corp., Apple Inc., Google LLC parent Alphabet Inc., Dell Technologies Inc. and Tesla Inc. knew that cobalt used in their products could be linked to child labor. The lawsuit also accuses the companies of failing to regulate the cobalt supply chain, which resulted in child cobalt miners working in "exceedingly harsh, hazardous, and toxic conditions."

BASE METALS

* Lead production in 2019 is expected to increase marginally, with further growth expected in 2020, according to S&P Global Market Intelligence's Metals and Mining Research team. Mine expansions and new startups ensure stable output with slow but irregular growth.

* Multiple industry analysts expect a lift-off for copper in 2020, amid a recovery in global demand for the base metal, Bloomberg News reported. Jefferies analyst Christopher LaFemina wrote in a note to clients that low inventories, high short positions, supply constraints and better demand are creating conditions for the metal to rally.

* Aeon Metals Ltd. said that the inferred mineral resource estimate for the Amy zone of its Walford Creek copper-cobalt project increased to 5.1 million tonnes grading 1.25% copper, 0.14% cobalt, 37 g/t gold, 1.35% lead and 0.63% zinc.

PRECIOUS METALS

* Vancouver, British Columbia-based Equinox Gold Corp. and LeaGold Mining Corp. entered into a definitive agreement to merge and form a gold producer operating entirely in the Americas. Under the proposal, LeaGold shareholders will receive 0.331 of an Equinox Gold share for each share held, implying a C$2.70 value per LeaGold share. Closing is expected in the first quarter of 2020.

* Hecla Mining Co. will accelerate the hiring and utilizing of contractors for the Lucky Friday silver mine in Idaho, as the operation ramps back up to full production by the end of 2020. The United Steelworkers union said members of Local 5114 in Mullan, Idaho, rejected a proposed agreement to end a longstanding strike at the mine.

* Condor Gold PLC agreed to sell the noncore Potrerillos gold concession in Nicaragua to Mako Mining Corp. unit Nicoz Resources S.A., in order to focus on its La India gold project, also in Nicaragua.

* Toronto-based Yamana Gold Inc. will further hike its annual dividend by 25% to 5 U.S. cents per share as of the first quarter of 2020, after boosting dividend payments by 100% in the third quarter, on the back of a growing cash balance and continuing initiatives to monetize its portfolio of non-producing assets and financial instruments.

* Kinross Gold Corp.'s Tasiast Mauritanie Ltd. SA unit signed a definitive agreement with a consortium of banks for an up to US$300 million loan to fund its Tasiast gold project in Mauritania.

* Bluebird Merchant Ventures Ltd. officially received from the South Gyeonsang Provincial Authority an initial 13-year permit to develop the Kochang gold mine in South Korea.

* Kirkland Lake Gold Ltd. declared a quarterly dividend payment of 6 U.S. cents per share, representing a 50% increase from its previous dividend of 4 cents per share.

* Lupaka Gold Corp. submitted to Peru's Minister of Economy and Finance a notice of intent to submit a claim to arbitration under the 2009 Free Trade Agreement between Canada and Peru over an investment dispute related to its Invicta gold project.

* Eldorado Gold Corp. secured an option to earn up to an initial 75% stake in Sparton Resources Inc.'s Bruell gold project in Quebec.

* The Ontario Superior Court of Justice approved the plan of arrangement between Aethon Minerals Corp. and AbraPlata Resource Corp. to merge into an advanced-stage silver-gold exploration company.

BULK COMMODITIES

* After more than two weeks of negotiations, delegates from more than 190 countries went home without reaching an agreement on how to account for carbon reductions and markets under the Paris Agreement on climate change. Expressing disappointment with the lack of concrete progress at COP25, U.N. Secretary-General António Guterres said in a statement: "The international community lost an important opportunity to show increased ambition on mitigation, adaptation and finance to tackle the climate crisis."

* While industry observers still have low expectations for thermal coal heading into 2020, many expect metallurgical coal prices to rebound in the first half of the year, two analysts wrote in a recent note. Seaport Global Securities LLC analysts Mark Levin and Nathan Martin wrote that in their meetings with institutional clients last week, observers seemed bearish on thermal coal and noted a "growing optimism about a potential rebound in coking coal prices." Meanwhile, in the metallurgical coal space, investors seemed optimistic that the price may soon bottom out amid rallying Chinese steel and iron ore prices.

* Steel Dynamics Inc. expects lower fourth-quarter earnings year over year of between 49 U.S. cents and 53 U.S. cents per diluted share, or between 55 cents and 59 cents in adjusted earnings per diluted share. The steelmaker is set to book lower earnings partly due to two planned annual maintenance outages at the Butler and Columbus flat roll divisions, resulting in higher than normal maintenance and associated costs of about US$15 million, or 5 cents per diluted share. The outage also reduced flat roll steel shipments by about 70,000 tons to 80,000 tons.

* Alcoa World Alumina and Chemicals, a 60/40 joint venture between Alcoa Corp. and Alumina Ltd., will permanently shut down its Point Comfort alumina refinery in Texas to eliminate unprofitable capacity. The refinery's annual alumina capacity of about 2.3 million tonnes has been curtailed since June 2016. Alcoa said it will record restructuring charges of about US$175 million, or 94 U.S. cents per share, related to the permanent closure. Alumina, meanwhile, said that its equity share of the charges would be A$104 million.

* Kore Potash PLC's pre-feasibility study for the Dougou extension project, part of the Sintoukola potash project in the Republic of Congo, is on track for completion in April 2020, with completed technical studies outlining potential financial improvements against the scoping study.

* Administrators from KordaMentha were appointed to Bounty Mining Ltd., after a period of depressed coking coal prices, production shortfalls, and inability to secure additional funding, followed by receivers and managers from PwC, who are now in control of the company's assets, undertakings, and operations.

* Kaiser Aluminum Corp. reached a new five-year labor deal with the United Steelworkers, effective Oct. 1, 2020, and covering its operations in Newark, Ohio, and Spokane, Wash.

* Nigeria's Mining Cadastre Office granted Kogi Iron Ltd.'s subsidiary KCM Mining Ltd. mining lease No. 29796, the fourth iron ore mining lease granted to the explorer in the country.

SPECIALTY

* Governments across the world are supporting the uptake of electric vehicles, with efforts focused on improving air quality, meeting greenhouse gas emissions targets, bridging cost gaps between EVs and internal combustion engines, and lowering fuel unit consumption. EV incentive policies across Europe, the U.S., China and Japan have driven sales, but ongoing policy support is still needed to continue fleet electrification as average EV prices are still higher than that of ICE vehicles on a non-subsidized basis, according to S&P Global Market Intelligence's Metals and Mining Research team.

* Iluka Resources Ltd. expects an impairment charge of US$290 million related to its Sierra Rutile Ltd. operations in Africa, Reuters reported. This will reduce the carrying value of Sierra Rutile's remaining net assets to about US$50 million. Iluka also expects its rehabilitation liability to increase by US$41 million, hurting fiscal 2019 results.

* PJSC Alrosa's supervisory board approved the strategy for the development of its cutting and polishing complex from 2020 to 2022, as well as the plan of integration of the Kristall diamond factory into the group. The plan's implementation will aid in positively influencing the operational efficiency of the producer's consolidated diamond cutting sector. Separately, Alrosa launched a blockchain-powered e-commerce solution for Chinese diamond retailers, in partnership with Tencent Holdings Ltd. and Everledger Ltd. The program will offer consumers unprecedented levels of transparency on the origin, characteristics, and authenticity of the jewelry they purchase.

* Lynas Corp. Ltd. was not granted approval in Malaysia to increase its lanthanide concentrate processing limit for 2019. The company said that it was given by the regulator a list of additional reports and management plans required in order for the application to be reconsidered.

* Kenmare Resources PLC expects to miss the lower end of its full-year 2019 production guidance range of 900,000 tonnes of ilmenite at the Moma titanium mine in Mozambique, due to unplanned production downtime. The explorer subsequently cut its full-year 2019 ilmenite production outlook to between 870,000 tonnes and 900,000 tonnes.

* Prospect Resources Ltd. mandated African Export-Import Bank to arrange and manage the primary syndication of a US$143 million project finance debt facility, which will be used towards funding its Arcadia lithium project in Zimbabwe.

* USA Rare Earth LLC and Texas Mineral Resources Corp. opened the Wheat Ridge rare earths pilot plant in Colorado, the first rare earths processing facility outside of China. The plant will use feedstock from the Round Top rare earths deposit in Texas.

* Neometals Ltd. said Innovative Manufacturing CRC agreed to co-fund an about A$2.6 million collaborative research project with Queensland University of Technology to set up a synthetic zeolite manufacturing plant.

* Speciality Metals International Ltd. through its joint venture with CRONIMET Australia Ltd. completed the C2 electrical commissioning for the entire plant at the Mount Carbine tungsten project in Queensland, Australia.

* Talga Resources Ltd. started its second commercial scale trial of its Talcoat graphene additive for maritime coatings.

INDUSTRY NEWS

* The Philippines’ Mines and Geosciences Bureau issued an order requiring the monitoring of undisposed residual stockpiles outside mining sites, in a bid to improve the country’s regulation of small-scale mining operations, the Manila Bulletin reported.

* Goldman Sachs Group Inc. has pledged to cut off funding for certain new fossil fuel-related projects, facilitate another US$110 billion in clean energy solutions by 2025, and seek out additional financing options to address the physical impacts of climate change. But the investment banking and management firm stopped short of pledging to pull funding for or divest from coal mining, oil and gas companies or the electric utilities that invest heavily in coal-fired generation.

* Australia-listed explorer Kalia Ltd. had its licenses to operate in the autonomous Bougainville region suspended following the death of a locally-born geologist at an area in the north of the island, where there is a "known criminal resistance" to mining exploration, The Sydney Morning Herald reported.

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