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Latest US sanctions could harm investment in Russian metals and mining sector


Latest US sanctions could harm investment in Russian metals and mining sector

Fresh U.S. sanctions announced in August could damage foreign investment in the Russian metals and mining sector, Christopher Weafer, senior partner at Macro-Advisory Ltd., told S&P Global Market Intelligence on the sidelines of the MINEX Russia conference in Moscow. Weafer said the latest move by the U.S. government has "raised a red flag" for industry players and there is the potential for escalation.

Kirkland raises FY'17 gold production guidance on solid Q3

Kirkland Lake Gold Ltd. is on track to achieve an improved 2017 production guidance of 570,000 to 590,000 ounces of gold following a 4% year-over-year increase in consolidated gold production for the third quarter to 139,100 ounces. The company previously expected full-year production to be between 530,000 and 570,000 ounces of gold.

Whitehaven coal output rises 14% in September quarter as Maules Creek ramps up

Whitehaven Coal Ltd.'s saleable coal production in the first quarter of fiscal 2018 increased 14% year over year to 5.9 million tonnes as the Maules Creek mine had another record quarter. Run-of-mine coal production likewise improved 5% to 5.7 million tonnes in the three months.


* Codelco is reportedly mulling to reduce the planned investment for its Chuquicamata copper underground project from US$4.2 billion to US$3 billion, El Mercurio reported, citing company sources. The Chilean state miner is expected to submit changes to the project's design for environmental review in order to optimize construction, the sources said.

* Metalicity Ltd. exercised an option to acquire Ridgecape Holdings Pty. Ltd., which holds an option to acquire the Napier Range and Emanuel Range zinc projects in Western Australia from Northwest Nonferrous International Investment Co. Ltd. unit Meridian Minerals Ltd. by making staged cash payments totaling about A$2.0 million.

* Capstone Mining Corp. expects to hit the lower end of its 2017 production guidance of 94,000 tonnes of copper, after reporting third-quarter copper output of 22,000 tonnes and 67,000 tonnes for the first nine months of the year.

* Chile's copper exports reached a three-year high of US$3.18 billion in September, Reuters reported, citing the country's Central Bank.

* Orsu Metals Corp. completed the sale of a 94.75% interest in GRK MLD LLP, which owns the Karchiga copper-gold-zinc project in Kazakhstan, for US$6 million to CMSS Global Supply and Trading FZC.


* Regis Resources Ltd. achieved record gold production for the second consecutive quarter at its Duketon gold project in Western Australia, booking 91,921 ounces in the September quarter.

* Acacia Mining plc produced 191,203 ounces of gold and sold 132,787 ounces of gold during the third quarter. The Buzwagi project exceeded expectations, with the mine producing 69,097 ounces of gold due to strong grades. Production at the North Mara and Bulyanhulu projects, however, were impacted by work permit issues and a move to reduced operations, respectively. Gold concentrate sales were below production due to the ongoing export ban of gold and copper concentrate in Tanzania.

* Southern Hemisphere Mining Ltd. applied for exploration licenses E52/3579 and E52/3580, covering an area of 782 square kilometers, in Western Australia, to expand the company's tenement holding in the area to 1,504 square kilometers.

* A preliminary economic assessment for Eros Resources Corp.'s Bell Mountain gold project in Nevada pegged a posttax net present value of US$9.3 million at a discount rate of 5%, a 24.7% internal rate of return and a 2.7-year payback period. The project is expected to produce 60,056 ounces of gold and 408,498 ounces of silver over a four-year mine life, with cash costs of US$759 per ounce.

* Atlantic Gold Corp. officially opened the Moose River Consolidated gold mine in Nova Scotia and achieved first gold pour at the site.

* Durango Resources Inc. agreed to acquire the 520-hectare Baby-Baby property in Ontario from two arm's-length vendors, in exchange for C$60,000, 3 million shares, and a 1% gross revenue royalty.

* The suspension of Mandalay Resources Corp.'s Cerro Bayo silver mine in southern Chile, caused by the death of two workers in June, led to the dismissal of 235 workers, company officials told news radio Bio Bio. The mine will remain under care and maintenance for the rest of the year.

* Polymetal International Plc plans to build an autoclave in Russia's Khabarovsk region with a processing capacity of 300,000 tonnes of gold concentrate, Kommersant reported.


* Vale SA, Rio Tinto, BHP Billiton Group and Fortescue Metals Group Ltd., the "Big 4" iron ore miners, have recently executed large-scale expansion investments in response to increases in iron ore demand from China. Vale is increasing its nameplate capacity to 400 Mt/y to 450 Mt/y by 2020, with Rio Tinto targeting 360 Mt/y, BHP targeting 290 Mt/y; and Fortescue targeting 160 Mt/y to 170 Mt/y. The latter three capacities are this year's targets, although the expansions for Rio Tinto and BHP were delayed in 2017.

* As China steps into what would presumably be the second five-year term of President Xi Jinping, analysts are expecting authorities to strengthen regulations around environmental protection as well as continue or even accelerate capacity reduction programs for the coal and steel industries that were launched in 2016.

* Metinvest BV's net profit for the first half of the year dropped 20% to US$72 million from US$90 million the year before, after losing control over several facilities in eastern Ukraine due to takeovers by separatist groups. Metinvest produced 3.9 million tonnes of crude steel, 13.6 million tonnes of iron ore concentrate and 1.4 million tonnes of coking coal concentrate, registering decreases of 6%, 14% and 8%, respectively.

* Bowen Coking Coal Ltd.'s shares continued to go up following its debut on the ASX, spurred by a tightening in seaborne coking coal supply. "In the afternoon session we saw significant buyer interest as the news on Bowen Coking Coal started to spread, which also transpired into a 10% gain in early trade [Oct. 12]," CEO and Managing Director Gerhard Redelinghuys told S&P Global Market Intelligence.

* Ironveld Plc is continuing negotiations with multiple parties to secure funding for necessary upgrades and refurbishment to allow for the processing of magnetite ore at the Middelburg smelter in South Africa. The company said that two parties have completed due diligence proceedings and are in the process of concluding internal approval processes.

* As part of China's campaign against air pollution, Shanxi Coking Coal Group Co. Ltd. will slash 900,000 tonnes of coke and 360,000 tonnes of chemicals from production for the six months between Oct. 1 and March 31, 2018, Reuters reported. The move is anticipated to decrease the miner's total sales over the fourth quarter and the first quarter of next year by 2.8 billion Chinese yuan.

* Adani Enterprises Ltd.'s Abbot Point coal terminal is set to launch a prospectus for a US$500 million bond issue to help refinance the debt of the port, The Australian Financial Review's Street Talk wrote. Local banks have been reluctant to get involved in the bond issue due to the backlash against the company's giant Carmichael coal mine, and sources said several U.S. banks, including JPMorgan, Citigroup and Bank of America Merrill Lynch, have also passed on the mandate.


* On the back of falling uranium prices, France's Areva NewCo flagged job cuts and output reduction at its Somair and Cominak uranium mines in Niger, Reuters reported. Around 190 jobs will be eliminated at Somair and a freeze will be placed on contracts for 500 contractors, while severe restrictions would be placed at Cominak, a union head said. Areva NewCo split off from state-owned integrated nuclear group Areva SA earlier this year.

* Peak Resources Ltd. adjusted the bankable feasibility study for the Ngualla rare earth project in Tanzania based on a lower price deck for neodymium and praseodymium, lanthanum oxide and cerium oxide, as seen in the market. The company estimated a post-tax net present value, discounted at 8%, of US$612 million, an internal rate of return of 22%, and pre-production CapEx of US$365 million for the Ngualla and Tees Valley refineries combined.

* Russian Technologies State Corp. and Russia's State Atomic Energy Corp., ROSATOM, can restart the production of beryllium in Russia by extracting concentrate from the ore and dumps of the Malyshevsky emerald deposit, Kommersant reported. The production of beryllium has been curtailed since the late 1980s, but ROSATOM is trying to revive it.

* Ventnor Resources Ltd. secured a new silica sand project at Arrowsmith, which is 270 kilometers north of Perth, Western Australia.


* Hassan Abbasi, a spokesman for the Tanzanian government, refuted speculation that new laws in the country are a move toward the nationalization of mines, saying that President John Magufuli demands fair and equal treatment.

* Chinese commercial banks saw a deterioration in asset quality for mining-related loans in 2016, while the regions of Inner Mongolia, Yunnan, Fujian, Shanxi and Jilin reported the highest nonperforming loan ratios, according to China Banking Regulatory Commission data.

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