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Bulk of mining companies see lower cash holdings as of end-2018

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Bulk of mining companies see lower cash holdings as of end-2018

Cash balances for the 651 mining companies listed on the ASX and the London Stock Exchange totaled US$53.44 billion at the end of the second half of 2018, up 0.6% from the end of the preceding half when cash holdings totaled US$53.11 billion.

For the 623 companies that report cash holdings to the New York, Toronto and Vancouver exchanges on a quarterly basis, cash on hand at the close of the fourth quarter of 2018 totaled US$33.49 billion, down 5.6% from US$35.47 billion at the end of the previous quarter.

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Combined cash balances for the 20 LSE-listed companies rose 8.3% half over half to US$27.26 billion by the end of 2018. Rio Tinto, the top company on the exchange in terms of market value, grew its cash holdings by 79.9% to US$10.77 billion with help from its disposal of interests in Australian coal assets and the Grasberg mine in Indonesia in 2018.

Cyprus-based Polymetal International PLC led gains on the exchange as its cash holdings surged 897.4% to US$379.0 million, and copper miner Antofagasta PLC's cash on hand jumped 52.8% to US$1.03 billion. Both companies benefited from strong production and healthy operating cash flows.

For the 631 companies listed on the ASX, including Appendix 5B filers, total cash holdings were 6.3% lower half over half at US$26.18 billion. Acquisitions of new assets and interests helped trim cash balances by 50.6% to US$162.0 million for gold producer Northern Star Resources Ltd. and by 47.3% to US$1.57 billion for South32 Ltd.

Bucking the dominant downtrend on the exchange, favorable market conditions helped drive Alumina Ltd. and Yancoal Australia Ltd.'s cash holdings 385.0% and 102.6% higher, respectively, to US$183.8 million and US$726.7 million.

Among Appendix-5B filers, Champion Iron Ltd. logged a 100.9% surge in cash holdings to US$135.9 million on the back of operating cash inflows. Conversely, Gold Road Resources Ltd. posted a 73.9% decrease in cash on hand to US$31.0 million, and Pilbara Minerals Ltd. saw a 44.2% decline in cash holdings to US$49.5 million. Both reductions were partly attributed to exploration and development expenses.

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A review of the 23 companies on the NYSE shows that aggregate cash balances slipped 5.8% to US$17.01 billion from the third quarter to the fourth quarter of 2018. Agnico Eagle Mines Ltd.'s cash on hand dropped 42.0% to US$301.8 million, in part due to capital spending at its Amaruq and Meliadine gold developments in Canada. Mosaic Co. saw cash on hand fall 17.7% to US$847.7 million.

Sociedad Quimica y Minera de Chile SA grew its cash balance by 29.9% quarter over quarter to US$556.1 million, bucking the downtrend, helped by the sale of a 50% stake in the Cauchari-Olaroz lithium project in Argentina in October 2018.

Cash holdings totaled US$15.82 billion for the 112 companies on the Toronto Stock Exchange, reflecting a 5.4% decrease quarter over quarter. Base metals miner Lundin Mining Corp. and gold miner Kinross Gold Corp. trimmed respective cash balances by 44.5% to US$815.4 million and by 25.8% to US$349.0 million, partly through investing activities.

Kirkland Lake Gold Ltd.'s cash on hand was up 29.2% quarter over quarter to US$332.2 million, helped by inflows from operating activities partly attributed to strong output growth.

The TSX Venture Exchange's 488 companies had a combined cash balance of US$660.0 million at the end of the fourth quarter of 2018, down 5.0% quarter over quarter. Capital spending helped drive Victoria Gold Corp.'s cash holdings down 30.1% to US$30.8 million. A common stock offering in mid-2018 helped prop up SilverCrest Metals Inc.'s cash balance by 196.5% to US$32.3 million, while credit facilities contributed to Equinox Gold Corp.'s 158.3% increase in cash holdings to US$60.8 million.

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