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Metinvest's FY'17 earnings up more than 400% YOY on stronger revenues

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Insight Weekly: US stock performance; banks' M&A risk; COVID-19 vaccine makers' earnings

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Insight Weekly: LNG exports surge; investors unfazed by inflation; neobanks drive VC funding

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Essential Metals Mining Insights November 2021

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[Infographic]: 2021 World Exploration Trends


Metinvest's FY'17 earnings up more than 400% YOY on stronger revenues

TOP NEWS

Metinvest's FY'17 earnings up more than 400% YOY on stronger revenues

Metinvest BV's net profit in 2017 increased by more than five times on a yearly basis to US$617 million, driven primarily by higher revenues and lower impairments. Revenues jumped 44% to US$8.93 billion on the back of higher steel and iron ore selling prices, as well as stronger sales of pig iron, slabs, flat products and coke.

Switzerland freezes bank accounts linked to former Mongolian minister

Switzerland's Swiss Federal Tribunal upheld a decision to seize US$1.9 million in Swiss bank accounts as part of an ongoing corruption probe tied to former Mongolian Finance Minister Bayartsogt Sangajav, Reuters reported. The seized accounts were allegedly used to transfer about US$10 million to the former minister, who was instrumental in clearing the way for Rio Tinto's Oyu Tolgoi copper-gold operation in Mongolia.

Vale CEO seeks new dividend policy based on cash flow

Vale SA CEO Fabio Schvartsman is leaning toward a new dividend policy that is hinged on the company's cash flow generation instead of its financial results, the Financial Times reported. The company's board is expected to decide on the policy this month as Vale aggressively cuts debt to set the stage for steadier cash returns to shareholders over the coming years.

BASE METALS

* Rio Tinto is studying the construction of a US$1 billion coal-fired power plant for its Oyu Tolgoi mine in Mongolia, with the decision targeted for 2019, The Australian reported. This comes after the Mongolian government recently triggered a four-year deadline for domestically-sourced power.

* The independent directors of Finders Resources Ltd. urged shareholders to accept the takeover offer from Eastern Field Developments Ltd. after the latter successfully took control of Finders with a 60.22% stake. Finders has been rejecting the offer since it was announced in October 2017.

* Canadian Metals Inc. signed a definitive option agreement to acquire 100% of the TV Tower, Mountain Brook and Blackshale SedEx zinc properties in New Brunswick. The properties comprise 355 claim units covering 7,762 hectares.

* Alara Resources Ltd. subsidiary Alara Oman Operations Pty. Ltd. is forming a joint venture with South West Pinnacle Exploration Ltd. to undertake drilling and mineral exploration in Oman.

* Avanco Resources Ltd. said the resource base of its Carajás portfolio in Brazil rose to over 1 million tonnes of contained copper with the release of a maiden inferred resource estimate for the Pantera copper project. The project is estimated to host inferred resources of 20.8 million tonnes at 1.7% copper and 0.2 g/t of gold for 350,000 tonnes of contained copper and 140,000 gold ounces.

* Broken Hill Prospecting Ltd. unveiled an updated mineral resource estimate for the Thackaringa cobalt project in New South Wales, reflecting a 31% increase in tonnage and a 23% rise in contained cobalt. The project's resources are now estimated at 72 million tonnes at 852 parts per million of cobalt for 61,500 tonnes of contained cobalt, using a cutoff grade of 500 ppm cobalt.

* Carnavale Resources Ltd. signed a deal to acquire gold tenements M28/0378, E28/1477 and E28/2226, forming the Grey Dam nickel-cobalt project and part of KalNorth Gold Mines Ltd.'s Kurnalpi gold project in Western Australia, for A$110,000.

* Capstone Mining Corp. said an electrical technician at its Cozamin copper mine in Mexico was fatally injured while working on an underground voltage regulator. Operations at the mine resumed after a temporary halt, with the exception of the immediate area of the accident.

PRECIOUS METALS

* Hecla Mining Co. plans to acquire all of the outstanding shares of junior gold-silver miner Klondex Mines Ltd. for US$462 million in cash and shares. As part of the transaction, Klondex's Canadian assets will be spun out to its existing shareholders, while shareholders will receive US$2.47 per share in cash or 0.6272 of a share of Hecla for each share held.

* Galane Gold Ltd. signed an earn-in agreement that will allow B2Gold Corp. to indirectly acquire up to a 70% stake in a newly incorporated Galane unit.

* Alio Gold Inc. agreed to acquire Rye Patch Gold Corp. in an all-share deal valuing the latter at about C$128 million.

* Anaconda Mining Inc. announced its intention to make an unsolicited offer to acquire Maritime Resources Corp.

* As a proxy war for control of Colorado Resources Ltd. looms, both sides in the battle, which pits an ex-president and CEO against some of his old colleagues, slung allegations of self-interest in managing the company. Among other things, Colorado Resources' existing board alleged that ex-President and CEO Adam Travis worked against the interest of shareholders when he personally consolidated ownership of an exploration property called Gin next to the company's North ROK copper-gold property in British Columbia in 2013.

* Seeking exposure to Canadian markets, Australian-listed Beadell Resources Ltd. signed a definitive agreement to acquire Canadian-listed Golden Harp Resources Inc Beadell, a junior gold miner, plans to rename the combined company Americano Mining Inc. and said it wants to be listed on both the TSX Venture Exchange and the ASX. If the deal closes, Beadell shareholders will own about 94.5% of the combined company.

* Rox Resources Ltd. and Arafura Resources Ltd. restructured their Bonya polymetallic joint venture in Australia's Northern Territory to simplify current arrangements between both parties. The revised deal sees Rox divesting 11% of its 51% interest in the joint venture minerals in exchange for a 40% stake in the tungsten and molybdenum mineralization at the project, previously wholly owned by Arafura.

* A preliminary economic assessment for Gold Reserve Inc.'s Siembra Minera gold-copper project in Venezuela pegged a posttax net present value of US$8.1 billion, discounted at 5%, with an annual rate of return of 31.1% and a payback period of 4.1 years.

* An updated feasibility study for the Wafi-Golpu gold-copper joint venture between Newcrest Mining Ltd. and Harmony Gold Mining Co. Ltd. estimated a net present value, discounted at 8.5%, of US$2.60 billion, an internal rate of return of 18.2% and a 9.5-year payback period. Total CapEx fell from US$6.38 billion to US$5.38 billion.

* Nkwe Platinum Ltd. shares closed up 140% on the ASX on March 19 after the company announced that China's Zijin Mining Group Co. Ltd. has tabled a conditional offer to acquire the entire issued share capital of Nkwe Platinum.

BULK COMMODITIES

* Norsk Hydro ASA will expand the scope of the ongoing independent review of its Alunorte alumina refinery in Brazil and launch an internal audit after an infraction notice from Para state's Secretariat of Environment and Sustainability. The notice was related to an unlicensed connection between Alunorte and a licensed drainage canal from the adjacent Albras aluminum plant, which was releasing untreated rainwater from the roof of the coal storage shed at Alunorte into the Pará River. The company also discovered an additional inflow of water to the canal from the former hydrate storage area. President and CEO Svein Richard Brandtzæg said the discharge was "completely unacceptable and in breach with what Hydro stands for."

* Cleveland-Cliffs Inc. plans to wind down its Koolyanobbing iron ore mine in Western Australia by the end of June, a move that could affect hundreds of jobs, The West Australian wrote. In January, the miner hinted that it would close the operation by the end of the year.

* Shares of National Mineral Development Corp. Ltd. dropped over 6% in India on March 19 after the company decided to skip dividend payments for fiscal 2018. The Indian state-owned iron ore miner declared its first interim dividend of 4.15 Indian rupees per share for fiscal 2017, which ended March 31, 2017.

* China's raw coal production edged up 3.3% year over year to 3.52 billion tonnes in 2017 due to increasing demand and high-quality capacity, Xinhua News Agency reported, citing the National Bureau of Statistics. The increase was the first since 2014, after output hit a six-year low in 2016, the report said.

* Verdant Minerals Ltd. signed a nonbinding memorandum of understanding with Wilson International Trading Ltd. for the off-take of up to 350,000 tonnes per year of phosphate rock concentrate or other phosphate products from its Ammaroo phosphate project in Australia's Northern Territory.

* South Africa's Moti Group is looking to double its investments in Zimbabwe to US$500 million after President Robert Mugabe was replaced, with the company looking to spend US$250 million over the next four years on interests ranging from chrome ore mining to fertilizer and diamond polishing, Bloomberg News reported. Moti has about US$250 million invested in Zimbabwe, mostly in the mining sector.

* Several trade unions in India's coal mining sector are uniting in opposition to the government's plan to open up coal mining in the country to private miners, though the forms of protest differ, Mining Weekly wrote.

SPECIALTY

* The Australian Tax Office is investigating Albemarle Corp. and Tianqi Lithium Industries Inc. over the lithium purchases the miners made in 2015 and 2016 from the Greenbushes mine in Western Australia, The Australian Financial Review reported.

* Investors enamored with Australian and Toronto-listed graphite plays should take heed that the market could be turned on its head within five years as multiple disruptors lie in their path, experts warned. Warwick Grigor, who started Sydney-based private investment bank Far East Capital Ltd. Research Division with Fortescue Metals Group Ltd. Chairman Andrew Forrest, told S&P Global Market Intelligence that the graphite market is at a "critical point," with known strong demand ahead but that will not have an impact for another three years potentially.

* Prospect Resources Ltd. updated its pre-feasibility study on the Arcadia lithium project in Zimbabwe, estimating a pretax net present value, discounted at 10%, of US$340 million, a 77% internal rate of return and a two-year payback period.

INDUSTRY NEWS

* S&P Global Market Intelligence's Pipeline Activity Index recovered ground for a second consecutive month in February, rising to 96 from 92 as increases in initial resources and significant financings were tempered by a drop in drilling activity and project milestones. By target, the gold PAI was up to 134 from 127, while the base metals PAI rose to 68 from 63. The number of initial resource announcements increased for a second consecutive month in February, to 10 from seven.

* As Kazakhstan prepares to implement more measures this year to attract mining investment, Western Australia, on whose regime its new mining code is based, has warned about resources companies' methods of reducing tax payments. The Asian country's tax code was amended Jan. 1 to remove the profit tax for miners and allow exploration deductions, and S&P Global Market Intelligence has learned that more amendments are on the way later this year.

* Zimbabwe introduced changes to a law to limit majority ownership by state entities to only diamond and platinum mines, Reuters reported. The law introduced during the rule of former president Robert Mugabe aimed to increase black ownership in the mining sector.

* Junior Australian exploration companies lauded the passage of the Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017 through the Senate. According to Mining Weekly, included in the bill is a tax credit arrangement that will allow companies with no mining income to renounce and pass future tax deductions to their Australian resident investors.

* According to South Africa's Solidarity trade union, in-principle agreements have been reached about certain changes to the third iteration of the mining charter during discussions between the government and the mining industry over the weekend, Mining Weekly reported.

* Mining firms in the Democratic Republic of the Congo are unlikely to secure substantial concessions in discussions with authorities over changes to the mining code, Bloomberg News reported, citing Albert Yuma, chairman of state-miner Gecamines SA. "There can be no renegotiation on any point once the code has been promulgated," Yuma said.

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.