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Newmont buying Goldcorp for US$10B; Glencore gave Gertler firms US$1B in loans

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

State of the Market: Mining Q2-2020


Newmont buying Goldcorp for US$10B; Glencore gave Gertler firms US$1B in loans

TOP NEWS

Newmont to buy Goldcorp in US$10B deal

Newmont Mining Corp. is acquiring Goldcorp Inc. in a US$10 billion all-share deal to create Newmont Goldcorp, with completion expected in the fourth quarter. Newmont offered 0.3280 of its share for each Goldcorp share. The combined company will target US$1.0 billion to US$1.5 billion in divestitures over the next two years to optimize gold production at a sustainable, steady-state level of 6 million to 7 million ounces per year. Newmont CEO Gary Goldberg said the merger is expected to generate up to US$100 million in annual pretax synergies. Goldberg added that potential buyers are already making inquiries about the assets the company is divesting as a result of the merger.

Report: Glencore gave US$1B in loans to businesses linked to DRC dealings

Glencore PLC provided nearly US$1 billion in loans and advances to help fund U.S.-sanctioned businessman Dan Gertler's investments in the Democratic Republic of the Congo, where he is accused of corruption, The Wall Street Journal reported. The loans were made over a roughly 10-year period, according to the report. Glencore's Katanga Mining Ltd. recently agreed to pay C$30 million to settle a Canadian probe into the company's dealings in the country.

Rio Tinto declares force majeure on iron ore shipments after fire at Cape Lambert

Rio Tinto declared force majeure on certain iron ore shipments after a fire broke out during a maintenance shutdown at its Cape Lambert terminal in Pilbara, Western Australia, Reuters reported. The fire damaged part of the Robe Riverfacility at Cape Lambert, which separates lump and fine iron ore products, the report said.

DIVERSIFIED

* Blackstone Resources AG committed to spend €200 million on a new battery-production project in Germany. The project's first phase is targeted to have an initial capacity of 100 million battery cells per annum, or the equivalent of 25,000 to 100,000 electric-vehicle batteries.

* Valor Resources Ltd. signed a joint venture option agreement with Kennecott Exploration Co., part of the Rio Tinto group, for the Berenguela copper-silver-manganese project in southeastern Peru, allowing it to take up to a 75% stake.

BASE METALS

* The Brazilian Pará State Environmental Agency awarded Horizonte Minerals PLC a construction license to develop its 100%-owned Araguaia ferronickel project in Brazil.

PRECIOUS METALS

* Alamos Gold Inc. met its annual gold production guidance by posting a record gold output of 505,000 in 2018, an 18% increase from 2017, driven by strong performances from its Mulatos mine in Mexico and Island gold mine in Canada, which set a new full-year production record of 105,800 ounces. The company's fourth-quarter output stood at 125,600 ounces of gold.

* Cia. de Minas Buenaventura SAA reported gold output of 259,783 ounces for the fourth quarter of 2018 and 1.03 million ounces for the full year. Silver production for the quarter was about 5.8 million ounces, while full-year production was approximately 26.2 million ounces. EBITDA in 2019 is expected at between US$310 million and US$380 million, in line with 2018, while capital expenditures are expected at US$80 million to US$120 million.

* Acacia Mining PLC produced 130,581 ounces of gold in the fourth quarter of 2018, a 12% drop from the prior year due to the Buzwagi mine transitioning to a stockpile-processing operation. Full-year 2018 output totaled 521,980 ounces, exceeding its guidance of between 435,000 and 475,000 ounces.

* Goldcorp said gold production for the fourth quarter of 2018 increased 25% from the previous quarter to 630,000 ounces, beating guidance, with full-year production of 2.3 million ounces. Additionally, the company said it achieved commercial production under budget and ahead of schedule at the Penasquito gold project in Mexico in December 2018.

* Coeur Mining Inc.'s fourth-quarter silver equivalent production reached 9.8 million ounces, a 16.2% yearly decline from 11.7 million ounces in 2017. Full-year output dropped 9.6% to 35.6 million ounces from 39.4 million ounces the year prior.

* First Majestic Silver Corp. reported a 37% increase in production to a record high of 22.2 million silver equivalent ounces for 2018, falling within the company's annual guidance. The company anticipates 2019 total production at 24.7 million to 27.5 million silver equivalent ounces.

* Yamana Gold Inc. exceeded its full-year production guidance for all metals in 2018 from continuing operations, with a gold-equivalent output of 1.04 million ounces, compared to 1.01 Moz guided, on the back of strong performance at its Yamana mines.

* The Association of Mineworkers and Construction Union plans to launch Jan. 22 a secondary strike at Sibanye Gold Ltd.'s Rustenburg platinum group metals mines in South Africa, Fin24.com reported. Sibanye expects the planned action to cripple operations at Rustenburg, where the union has a large membership, company spokesman James Wellsted said.

* Filo Mining Corp.'s pre-feasibility study on the Filo del Sol gold project in Argentina estimated a posttax net present value, discounted at 8%, of US$1.28 billion and a 23% internal rate of return. The project is expected to annually produce 67,000 tonnes of copper, 159,000 ounces of gold and 8.7 million ounces of silver, based on 12 years of leaching.

* Highland Gold Mining Ltd. reported higher reserves and resources at the Mnogovershinnoye gold mine in Russia, increasing the projected mine life to 2029 from 2022. Proven and probable ore reserves at the mine rose to 771,569 ounces of gold contained in 9.0 million tonnes grading 2.7 g/t, while total indicated and inferred resource rose to about 1.5 million ounces of gold contained in 14.1 million tonnes grading 3.2 g/t.

* Agnico Eagle Mines Ltd.'s gold output is expected to grow to approximately 2 million ounces per year by 2020 as the company remains focused on growing its production base and investing in its exploration and development projects, the Metals and Mining Research team at S&P Global Market Intelligence wrote.

* Australian billionaire Kerry Stokes cut his stake in Saracen Mineral Holdings Ltd. to just below 5% after selling almost 10 million shares for A$30 million, The Australian reported.

* Titan Minerals Ltd. executed a binding agreement to acquire up to an 85% interest in the Las Antas gold project in southern Peru. The company can earn an initial 60% stake by funding US$2 million of exploration within two years and an additional 25% interest after completing certain milestones.

* White Gold Corp. inked a binding letter agreement to acquire the QV gold project in Canada's Yukon Territory from Comstock Metals Ltd. for a total of C$2.6 million in cash, shares and share purchase warrants.

BULK COMMODITIES

* Fortescue Metals Group Ltd. could benefit from Rio Tinto's inability to meet certain shipment commitments through a potential price tailwind for lower-grade iron ore, The Australian reported, citing Shaw and Partners analyst Peter O'Connor.

* Japan set a 30-day deadline for South Korea to respond to its request for government talks over forced labor by South Koreans before and during World War II, after a South Korean court granted a request to seize the Nippon Steel & Sumitomo Metal Corp.'s assets in the country, The Korea Herald reported.

* In 2019, China's steel industry will shift its focus on improving capacity structure from cutting overall capacity, Reuters reported, citing Yu Yong, chairman of China Iron and Steel Association. The plan includes optimizing production structure, adjusting layout of steel mills and pushing mergers and acquisitions.

* JSC Russian Railways bought nearly 8% more rails from Evraz PLC but 36% fewer rails from rival Mechel PAO in 2018. The state-owned railway firm purchased 775,600 tonnes of rails from Evraz and 209,900 tonnes from Mechel, as compared to 719,800 tonnes and 329,000 tonnes, respectively, in 2017.

* Dissident Altona Energy PLC shareholders failed in their bid to oust Qinfu Zhang and Chi Ma as directors, after resolutions calling for their removal were not passed in a general meeting.

* Chinese aluminum exports for 2018 reached a record at 5.8 million tonnes, increasing 20.9% compared to a year ago, Reuters reported, citing Chinese customs data. In a separate report, the newswire said the country's iron ore imports for 2018 dropped 1% from the previous year to 1.06 billion tonnes, marking China's first annual decline since 2010.

SPECIALTY

* Tri-Star Resources PLC's share price fell almost 39% in early afternoon trades on the London Stock Exchange after the company said its 40%-owned Strategic & Precious Metals Processing LLC affiliate in Oman outlined a need for US$10.5 million in funding.

* PJSC Alrosa opened a new subsidiary in Zimbabwe, called Alrosa (Zimbabwe) Ltd., as the company plans to develop new mining operations in the country. Alrosa experts, including geologists and mining engineers, are set to arrive in Zimbabwe in February.

* Tertiary Minerals PLC plans to lodge an appeal with the Swedish government against the Swedish Mining Inspectorate's decision to reject the company's exploitation permit for its Storuman fluorspar project in Sweden.

* Sheffield Resources Ltd. tapped UBS AG to act as its corporate adviser to search for a strategic partner for funding and developing its Thunderbird mineral sands project in Western Australia.

* Sociedade Mineira Do Lulo, the partnership between Lucapa Diamond Co. Ltd., state-owned mining company Endiama and local partner Rosas & Petalas, will offer seven exceptional diamonds from its Lulo mine in the inaugural competitive sale under the country's new diamond marketing policy.

INDUSTRY NEWS

* Argentina could become more attractive to investors as it is set to join the Extractive Industries Transparency Initiative, an international transparency standard for managing oil, gas and mineral resources, Reuters reported. The global initiative requires member countries to disclose their dealings with companies, including earnings from taxes and royalties.

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