TOP NEWS
Glencore FY'17 net income surges 319% to US$5.78B
Glencore Plc's net income attributable to shareholders for full-year 2017 surged 319% to US$5.78 billion, or 41 cents per basic share, from $1.38 billion, or 10 cents per basic share, in full-year 2016, leading to a cash distribution of 20 cents per share amounting to US$2.9 billion. The net income improvement was realized on the back of higher commodity prices combined with strong unit cost performance. Revenue in the year swelled to US$205.48 billion, from US$152.95 billion a year ago, while CapEx increased to US$4.23 billion from US$3.50 billion.
Southern Copper wins bid for Peru's Michiquillay copper mine
Grupo México SAB de CV-owned Southern Copper Corp. won a tender to develop the Michiquillay copper mine in Peru, Reuters reported. Southern Copper's proposal included the transfer of US$400 million to the government and the payment of 3% royalties, beating Cía. Minera Milpo SAA's offer of US$250 million in transfers and 1.875% in royalties.
Fortescue Metals' H1'18 net profit slumps 44% YOY to US$681M
Fortescue Metals Group Ltd.'s net profit and revenue in the first half of its fiscal 2018 slumped 44% and 18% on a yearly basis, respectively, to US$681 million and US$3.68 billion. The group declared an interim fully franked dividend of 11 Australian cents per share. Fortescue, meanwhile, secured a US$1.4 billion term loan facility from Chinese, Australian and European financial institutions, which will be used to redeem a portion of the company's senior secured notes maturing 2022 through a tender and/or redemption, lowering annual borrowing costs by about US$80 million.
DIVERSIFIED
* BHP Billiton Group CEO Andrew Mackenzie said he is meeting with Elliott Management Corp. this week to discuss the activist shareholder's demand for BHP's business overhaul, Bloomberg News reported. Mackenzie reiterated that the costs of abolishing its dual-listing structure outweighed any current benefits, pushing back on investor calls for the simplification of the structure at the company, the Financial Times wrote.
* BHP plans to open data rooms for its U.S. shale assets in March as it expects to close the sale of the assets before the year's end, Mining Weekly reported. Responding to a question about whether BHP would consider "out of cycle" shareholder returns after the sale of shale assets, CEO Andrew Mackenzie said that any decisions regarding the use of sale proceeds would be influenced by the status commodity markets and the company's priorities at the time, The Australian Financial Review wrote.
* Trilogy Metals Inc.'s pre-feasibility study for its Arctic copper-zinc-lead-silver-gold project in Alaska estimated an after-tax net present value, discounted at 8%, of US$1.41 billion and a 33.4% internal rate of return, with a 2-year payback period. Average annual payable production is expected to be more than 159 million pounds of copper, 199 million pounds of zinc, 33 million pounds of lead, 30,600 ounces of gold and 3.3 million ounces of silver for the 12-year life of mine.
BASE METALS
* First Quantum Minerals Ltd. increased the offering amount of its senior notes due 2024 and 2026 to US$1.85 billion, from US$1.50 billion previously. The offering will include US$850 million of senior notes due 2024, which will accrue interest at 6.500% per annum, and US$1.00 billion of senior notes due 2026, which will accrue interest at 6.875% per annum.
* Tahoe Resources Inc.'s preliminary economic assessment for its La Arena II copper-gold porphyry project in Peru pegged an after-tax net present value of US$824 million, discounted at 8%, a 14.7% after-tax internal rate of return and a 4.6-year payback. Average annual production during the 21-year mine life is estimated at 149,000 ounces of gold and 207 million pounds of copper, plus an additional 226,000 ounces of gold and 115 million pounds of copper recovered over a two-year pre-production period.
* Vedanta Resources Plc could expedite the expansion of its African zinc operations to capitalize on the recent price rally, Reuters wrote, citing the CEO of the group's Zinc International unit. Zinc International CEO Deshnee Naidoo expressed optimism over South Africa after Cyril Ramaphosa recently replaced Jacob Zuma, noting improving zinc market conditions as demand grows amid supply deficits for both zinc concentrate and metal.
* Mongolia can develop a power plant at the Tavan Tolgoi coal mine by 2021 to supply Rio Tinto's Oyu Tolgoi copper mine, Reuters wrote, citing the country's energy officials.
* Alexander Mining Plc partnered with Turkey-based Proses Mühendislik, Danismanlik, Insaat ve Tasarim AS to investigate the commercial use of the company's proprietary base metals leaching technology in the Middle East. Proses will also construct a semi industrial scale processing plant, with a capacity of 100,000 to 300,000 tonnes of feed per year, either in Turkey or Iran.
PRECIOUS METALS
* Pan American Silver Corp.'s hiked its quarterly cash dividend by 40% to 3.5 U.S. cents per share after net earnings in the fourth quarter of 2017 more than doubled year over year. The company posted quarterly net earnings of US$49.7 million, or 32 cents per share, which included a US$60.2 million reversal of the 2015 impairment on the Morococha mine in Peru, compared to net earnings of US$22.3 million, or 14 cents apiece, a year ago.
* New Gold Inc.'s net loss in the fourth quarter of 2017 widened to US$195.6 million, from a year-ago net loss of US$22.3 million, despite the revenues climbing to US$193.5 million, from US$140.7 million in the fourth quarter of 2016. The increased loss included an after-tax impairment charge of US$181 million on its Rainy River mine in Ontario, and a noncash pre-tax loss of US$17 million on the revaluation of the gold stream obligation.
* Hochschild Mining Plc's profit from continuing operations attributable to shareholders for full-year 2017 declined to US$41.6 million, or 8 cents per share, from US$45.6 million or 9 cents per share, a year ago. The company proposed a final dividend of 1.965 cents per share, up 42% from the 2016 final dividend. Revenue in the year increased to US$722.6 million, compared to US$688.2 million in the prior year, but gross profit for the company dropped to US$173.5 million, from US$200.5 million in 2016, as the cost of sales jumped to US$549.0 million from US$487.7 million.
* Antioquia Gold Inc.'s preliminary economic assessment for the Cisneros gold project in Colombia pegged a posttax net present value of US$16.8 million, discounted at 5%, an 18.7% internal rate of return and a 3.2-year payback period. The company expects to recover 150,900 ounces of gold during the 5-year mine life. The total pre-production and sustaining capital costs are estimated at US$75.5 million.
* Independence Group NL's net profit attributable to shareholders in the first half of fiscal 2018 dropped 84% year over year to A$3.2 million amid a depreciation and amortization expense of A$123 million in the half, including a A$69.9 million charge on the Nova mine, compared to A$47.9 million a year earlier.
* Newmont Mining Corp. declared a fourth-quarter 2017 dividend of 14 U.S. cents per share, which is nearly three times higher than the dividend of 5 cents per share announced in the year-ago period.
* Polymetal International Plc signed the first off-take contract for concentrate from the Kyzyl gold-copper project in Kazakhstan. The buyer, one of the company's established trading partners, will purchase 50% of forecast Kyzyl production this year.
BULK COMMODITIES
* Ternium SA's profit attributable to shareholders in the fourth quarter of 2017 jumped to US$180.2 million, from the year-ago net income of US$118.4 million. Net sales in the three-month period surged 50% year over year to US$2.77 billion, mainly on the back of higher steel shipments, which swelled 43% to 3.4 million tons.
* Eramet booked attributable net income of €203 million in 2017, swinging from a year-ago net loss of €179 million on the back of a favorable metals market. The group's results included an impairment of €42 million, compared to €167 million recorded in 2016. Operating income, meanwhile, soared 624% year over year to €608 million, helped by price developments in manganese as well as €99 million in productivity gains. Meanwhile, Eramet CEO Christel Bories said the group is eyeing an expansion in cobalt, lithium and nickel salts linked to energy transition markets like electric vehicles, and is actively seeking acquisition opportunities after previously buying a lithium deposit in Argentina, Reuters reported.
* The fertilizer market is nearing the end of a large cycle of phosphate capacity additions in 2018, which will result in a "long gap" while new projects are being developed, buoying prices, said Tom Luigs, EuroChem Mineral Chemical Co. OJSC's global product manager of phosphates and potash. "This gives time for any phosphate capacity increase to be digested by the market and be caught up by the demand growth that we are seeing for the years to come, especially considering the grain stock situation," Luigs said in an interview with S&P Global Market Intelligence.
* BHP CEO Andrew Mackenzie said the company remains interested in establishing a joint venture for the Jansen potash project in Saskatchewan to share development costs, the Financial Times wrote. However, he added that chances of a deal in the near term are slim.
* Legal and accounting advisers reviewing bids for Essar Steel India Ltd. are recommending that all bids be disqualified, Bloomberg News reported, citing anonymous sources. Global steel giant ArcelorMittal and a consortium led by Russia's VTB Group were the only two bidders for the insolvent steel company.
SPECIALTY
* Walkabout Resources Ltd. received approval from the China Export Credit and Insurance Agency for funding 80% of the China-sourced project equipment for its Lindi Jumbo graphite project in Tanzania.
* Lucara Diamond Corp.'s net income in the fourth quarter of 2017 shrunk to US$1.7 million, from US$11.2 million a year ago, while revenues dropped to US$37.1 million, from US$66.0 million in the fourth quarter of 2016, due to a lower average price per carat sold of US$535, compared to US$743 in the prior year quarter. Operating expenses per carat sold increased to US$255 in the quarter, from US$197 million a year ago.
* A Chilean appeals court accepted two protection claims filed by indigenous communities in Atacama region against the recent agreement reached between Sociedad Quimica y Minera de Chile SA and Chilean development agency Corfo over the development of lithium deposits in northern Chile. Claimants argue that the deal was reached without the consent of local indigenous communities, in severe violation of Convention 169 by the ILO, daily La Tercera reported.
* Thor Mining PLC decided to accelerate development of its Pilot Mountain tungsten project in Nevada and kicked off the second phase of metallurgical testing and scoping study work. The decision came after the U.S. Department of the Interior published a draft list of critical minerals in the Federal Register, which includes tungsten.
INDUSTRY NEWS
* The National Stock Exchange of Australia, or NSX, launched an assault to take on the ASX "head to head" with a bid to lure the country's mining explorers to list. "A wave of entrepreneurial activity coupled with high retail investor participation rates in Australia has opened up significant opportunities for us," NSX CEO Ann Bowering said at the RIU Explorers Conference in Fremantle, Western Australia.
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