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Glencore may lift stake in Volcan to 66.30% for US$956M

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


Glencore may lift stake in Volcan to 66.30% for US$956M

TOP NEWS

Glencore may lift stake in Volcan to 66.30% for US$956M

Glencore Plc struck a deal to buy 26.73% of the class A common shares, or voting shares, of Volcan Compañía Minera SAA at US$1.215 each for US$531 million. The Swiss commodities trader intends to make an offer to all of Volcan's shareholders via a public tender offer for up to 48.19% of the total class A common shares at the same price per share. Glencore will spend up to US$956 million for the offer from its own cash reserves, subject to the level of acceptances.

EMR Capital confirms US$560M refinancing of Martabe mine

Australian private equity player EMR Capital confirmed speculation that it has completed a US$560 million refinancing of the Martabe gold-silver mine in Indonesia. "We can confirm US$560 million was done," Managing Director and CEO Jason Chang told S&P Global Market Intelligence. Chang would not comment on which banks were involved in the refinancing.

Adani may divest minority stake in Carmichael coal mine to help raise funds

Adani Enterprises Ltd. may consider off-loading a minority stake in the Carmichael coal operation in Queensland, Australia, to financial institutions and contractors to help raise funds, Reuters reported, citing Jeyakumar Janakaraj, CEO of Adani Australia. The company is seeking to tie up financing for the giant Carmichael project by March 2018, with mine construction scheduled to begin in the next few weeks.

BASE METALS

* Chilean state miner Codelco is expected to contribute US$1.46 billion to the government's fiscal revenues this year, up 54.8% compared with 2016, according to Finance Ministry estimates, daily El Mercurio reported.

* Mitsui Mining & Smelting Co. Ltd. is targeting higher zinc and lead production from its Mitsui Kinzoku unit in the second half of its fiscal 2017. Zinc and lead output is expected to reach 118,800 tons and 34,100 tons, respectively, higher than the first-half guidance of 105,800 tons of zinc and 33,400 tons of lead.

* Andromeda Metals Ltd. retained 100% ownership of its Rover copper-gold project in Northern Territory, Australia, after potential joint venture partner Emmerson Resources Ltd. decided to withdraw from the deal.

* Results from Vast Resources Plc's first phase of drilling at the Carlibaba prospect supported the development of a second open pit operation at the Manaila polymetallic mine in Romania with the construction of a metallurgical processing facility on site, which is expected to reduce operational expenditure by up to 25%.

* ArcPacific Resources Corp. and its Korean partners, Nexgeo Inc. and Korea Resources Corp., extended a deed of release and amended agreement related to the Lucky Mike copper project in British Columbia. As a result, ArcPacific's 31% interest in the project will increase to 44%.

* About 97% of the 371 striking workers at Noranda Income Fund's processing facility in Quebec rejected the company's wage and pension offer, Reuters reported, citing the United Steelworkers of America. The workers downed tools Feb. 12 over proposed amendments to a pension plan as part of a collective bargaining agreement.

* Americas Silver Corp. shipped the first lead-zinc concentrate produced at the Los Braceros mill, part of its Cosala property in Sinaloa, Mexico, to the port of Manzanillo.

PRECIOUS METALS

* OceanaGold Corp. achieved commercial production at its Haile gold mine Oct. 1. President and CEO Mick Wilkes said the company will ramp up operations and look for incremental improvements at the process plant during the next several months.

* Empire Resources Ltd. achieved first gold pour from its recently commissioned Penny's Find gold mine in Western Australia.

* Vedomosti reported that in late September, the price of palladium overtook platinum for the first time since 2001. According to Thomson Reuters, palladium was worth US$934.5 per troy ounce on the London Metal Exchange on Sept. 30, while platinum was worth US$909.24 per ounce; however, the price of palladium fell Oct. 1.

* Falcon Gold Corp. signed a letter agreement for the right to acquire an initial 80% interest in Esperanza Resources SA's gold-silver mineral concessions, which cover over 36,000 hectares in Argentina's La Rioja and San Luis provinces. Falcon agreed to make escalating payments over a six-year period totaling US$2.6 million in cash and 1.5 million shares.

* Ariab Mining Co. Ltd., a Sudanese company and gold producer, is seeking to list publicly on the Toronto and Dubai stock exchanges, CEO Nasr Elhussein told S&P Global Market Intelligence. According to Elhussein, the listing will likely go ahead in the third or fourth quarter of 2018.

* Russia's Otkritie bank acquired a 7.56% stake in gold and silver producer Polymetal International Plc, Reuters reported, citing Alexander Dmitriev, the bank's managing director. Dmitriev did not elaborate how the bank had become a Polymetal shareholder, but noted that it does not plan to off-load its stake in the miner.

* First Majestic Silver Corp. suspended mining operations at its La Encantada silver mine in Mexico after four miners died at the 790 ramp due to gas intoxication. Operations will resume Oct. 4, but the 790 ramp area will remain closed until authorities complete an investigation into the accident.

* Harmony Gold Mining Co. Ltd.'s Kusasalethu gold mine in South Africa resumed full production following a temporary shutdown in August, African News Agency reported. The operations were suspended pending an investigation after a seismic event killed five workers.

BULK COMMODITIES

* South Africa's Solidarity trade union said it received a favorable three-year wage agreement from the Chamber of Mines following extensive coal industry negotiations, Mining Weekly wrote. According to the report, the wage offer ranges between 5.5% and 7.5%, with a 7.5% increase at Anglo American Plc, Exxaro Resources Ltd. and Glencore and a 7% increase from Kangra Coal Ltd., among other offers.

* Noble Group Ltd. completed the sale of its Noble Americas Gas & Power Corp. unit to Mercuria Energy America Inc. for US$185 million, which is less than the previously reported US$248 million announced in July.

SPECIALTY

* Galaxy Resources Ltd. denied The Australian Financial Review report which said the company has secured a lithium off-take agreement with Japan's Panasonic Corp., which supplies batteries to Tesla. Galaxy said it is in informal discussions with a number of companies, including Panasonic, but has not signed any agreements yet, Mining News reported.

* Birimian Ltd.'s pre-feasibility study for its Goulamina lithium project in southern Mali confirmed its potential technical and economic viability, and considered five possible development scenarios. The study estimated a project operational mine life of nine years to 14 years, processing between 14.0 million tonnes at 1.39% lithium oxide and 20.6 million tonnes at 1.31% lithium oxide. The project is estimated to have a net present value, discounted at 10%, of between US$85.6 million and US$126.4 million.

* European Metals Holdings Ltd. and the Czech government signed a memorandum of understanding over the Cinovec lithium-tin project that stressed, among other things, domestic processing of potential lithium products and a possible government investment in the project.

* A scoping study for Kidman Resources Ltd.'s Earl Grey lithium project, part of the Mount Holland property in Western Australia, estimated preproduction CapEx at US$111 million, including a 20% contingency. The posttax net present value of the mine is pegged at US$565 million, discounted at 10%, with a 57% internal rate of return.

INDUSTRY NEWS

* Peru's environment ministry modified the country's environmental impact assessment reporting process for exploration projects. From now on, only six types of projects would have to undergo this evaluation, including those involving more than 20 drilling platforms and over 10 hectares of drilling works, according to a resolution published in the country's official gazette El Peruano.

* Brazil's Mines and Energy minister, Fernando Coelho Filho, denied claims that the government will increase the financial compensation for mineral exploration tax only to increase government revenue. Coelho said the reform aims to bring the Brazilian mining legal framework closer to that of other mining jurisdictions. The change would increase tax revenue by 80%, according to Coelho, news agency Estadão reported.

* "The best time to invest in commodities is now," a fund manager told delegates at The Mining Show in Dubai, United Arab Emirates. "There is a huge disconnect between the equity markets and the commodity markets," Willem Middelkoop, co-founder of the Commodity Discovery Fund, said. "It is only a question of time before we see a rerating of commodities and a rerating of commodity equities."

* Large mining players have begun moving into Afghanistan for initial exploration, S&P Global Market Intelligence learned on the sidelines of The Mining Show in Dubai, United Arab Emirates. Estimates suggest Afghanistan has mineral resources worth trillions of dollars. However, there is little up-to-date data available, meaning there is a need for extensive exploration work to tap into this wealth.

* In a bid to attract investors and mining companies, Nigeria has come up with a new mining law that promises 100% foreign ownership for up to 25 years, a corporate tax of 20% to 30%, 3% to 5% royalties, tax holidays for an initial three years and exemption from customs tax for mining equipment imports.

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.