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Higher iron ore, coal prices set to boost Australian export earnings

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Higher iron ore, coal prices set to boost Australian export earnings

TOP NEWS

Rising iron ore, coal prices to buoy Australian export earnings

The expected value of Australia's resources and energy export earnings in 2016 and 2017 have been revised up by A$12 billion from the December 2016 estimate, to A$215 billion, representing a 32% increase year over year. The higher earnings forecast largely reflects the increase in iron ore prices and thermal coal prices during the March quarter, the government's Office of the Chief Economist wrote.

Pan American mulls US$1B investment in Navidad silver project

Pan American Silver Corp. intends to invest about US$1 billion in the Navidad silver-lead-gold project in Argentina's Chubut province if it reaches an agreement with the provincial government to reopen the shuttered project, Reuters reported. Authorities closed the project in 2013 as the region imposed a blanket ban on cyanide and open pit mining on their territory.

Barrick Gold to look for more Chinese partners

Barrick Gold Corp. will explore further cooperation opportunities with Shandong Gold Mining Co. Ltd. while continuing to search for more Chinese partners, according to Chief Innovation Officer Michelle Ash. Barrick spokesman Andy Lloyd told S&P Global Market Intelligence that the company's deal to sell 50% of its Veladero gold mine to Chinese state-owned Shandong Gold was more than a simple divestment.

BASE METALS

* Freeport-McMoRan Inc. and Codelco reportedly reached an agreement to relocate the desalination plant planned for their El Abra joint venture to a lower height than the mine's current location as part of a larger expansion plan for the project, a source told Diario Financiero. Codelco reportedly sold to Freeport the underground mining rights on the property, located 2,400 meters above sea level. The difference in altitude would allow the company to reduce costs of water treatment and pumping to the concentrator plant.

* U.S.-focused base metals explorer Alderan Resources launched an IPO to raise up to A$8.5 million and list on the ASX in late May.

* RBC Daily reported that an investment group from the United Arab Emirates close to the family of the Emir of Dubai is preparing a proposal for the purchase of Botswana's BCL, which is being sued by PJSC Mining and Metallurgical Co. Norilsk Nickel for US$271.3 million plus damages resulting from the botched sale of a 50% stake in the Nkomati mine in South Africa.

* Junior Western Australian copper-gold explorer RNI NL received competing offers for the company and its assets.

PRECIOUS METALS

* Moody's said Barrick Gold's sale of a 50% stake in the Veladero mine for US$960 million is credit positive, as it expects the gold major to use some of the proceeds to reduce debt. The rating agency also noted that the company's plans to possibly jointly develop Pascua Lama will reduce execution risk associated with the project, should it proceed with construction.

* Coeur Mining Inc. produced 3.9 million ounces of silver and 88,218 ounces of gold in the first quarter, improving over the 3.4 million ounces of silver and 78,072 ounces of gold in the corresponding year-ago period.

* Mike Hubbard, the CEO of Goldcorp Inc.'s and Teck Resources Ltd.'s US$3.5 billion gold joint venture, NuevaUnion, said he trusts that the project in Chile will receive support from communities in the Atacama region's Alto Huasco province as a result of early community engagement efforts. The communities previously opposed El Morro and managed to get its environmental permit revoked, daily El Mercurio reported.

* Canadian Platinum Corp. terminated a deal to acquire the Copper Hill gold-copper project in Nevada from a private U.S. company.

* Somboon Yindeeyoungyuen, director-general of Thailand's Department of Primary Industries and Mines, said the shutdown of Kingsgate Consolidated Ltd.'s Chatree gold mine in the country was executed in line with the government's order, aimed at minimizing adverse effects from mining activities in the country, Thai Rath reported.

* Hengxing Gold Holding Co. Ltd. proposed a 10 Hong Kong cent per share cash dividend for 2016 after its net profit surged 279% on a yearly basis to HK$227.2 million, as revenue increased 158% to HK$819.5 million. Gold production likewise rose, by 53% to 66,604 ounces at 28% lower all-in gold production costs of US$609 per ounce.

* Focus Minerals Ltd. completed a mineral resource update for the Brilliant deposit in the Coolgardie region of Western Australia, which resulted in a 26% increase in the combined resource, to 5.89 million dry tonnes at 2.5 g/t of gold for 475,500 ounces of contained gold.

* El Capitan Precious Metals Inc. said the concentrate processing machine at its namesake polymetallic project in New Mexico is now fully operational at planned capacity. Initial shipments of precious metals product have been sent to prospective buyers to determine the pricing.

* An updated mineral resource estimate for Barkerville Gold Mines Ltd.'s Barkerville Mountain deposit at its flagship Cariboo gold project in British Columbia pegged measured and indicated resources of 158,800 ounces of gold contained within 684,900 tonnes grading 7.21 g/t of gold, using a cutoff of 3.50 g/t of gold.

* An updated preliminary feasibility study for Miranda Gold Corp.'s Lucky Shot gold-silver joint venture project, part of the Willow Creek property in Alaska, estimated initial CapEx of US$15.1 million with payback after taxes expected in 1.88 years. Using a 7.5% discount rate, the project has an after-tax net present value of US$7.1 million and offers an internal rate of return of 21.80%.

BULK COMMODITIES

* With the supply of coking coal from Australia at risk in the aftermath of Cyclone Debbie, countries including China, Turkey, India and Japan are looking are looking for alternative sources, fueling a rally in prices, The Sydney Morning Herald reported, citing a shipping source. The supply disruptions are set to benefit Russia, Mongolia, Mozambique and the U.S.

* Fortescue Metals Group Ltd. is seeking customers for its iron ore in steel-producing nations apart from China to take advantage of the expected demand growth from infrastructure projects in countries such as India, Vietnam and the Philippines, the miner's CFO, Elizabeth Gaines, told Bloomberg News.

* Magnetite Mines Ltd.'s board signed an agreement with Lodestone Equities Ltd. and lone shareholder Coffee House Group Ltd. for a proposed merger.

* Kommersant reported that the founder and co-owner of the Kolmar Coal Co., Anatoly Mitroshin, sold his 20% stake to partner Sergei Tsivilev, who is now the largest shareholder in the coal miner, with a 40% stake. Mitroshin left the business at the peak of prices for coking coal, but Kolmar and partners need about 50 billion Russian rubles to increase production and construction of a port terminal, and a fall in coal prices can make the company unprofitable.

* The Western Australian government disputed claims that updated iron ore price assumptions were not included in the state's latest economic and fiscal overview delivered this week. According to the Treasury, the iron ore price assumption for the 2016-2017 financial year has been revised up by US$3.40 per tonne, to US$73.70 per tonne.

* ArcelorMittal unit ArcelorMittal South Africa Ltd. is planning to raise 3.5 billion South African rand through a borrowing-based facility as part of a capital-raising plan, Bloomberg News reported.

* Arconic Inc. is divesting its Fusina aluminum mill in Italy to Slim Aluminium. The company expects to record restructuring-related charges representing the loss on sale of about US$60 million after tax for the first quarter.

* The Chinese commerce ministry expressed concern over the European Union's decision to impose an antidumping duty of between 18.1% and 35.9% on the country's hot-rolled steel coil, Reuters reported.

SPECIALTY

* The battle between takeover target Lepidico Ltd. and suitor Lithium Australia NL stepped up a notch, with the latter hiring a corporate adviser to review an independent expert report prepared for Lepidico by BDO Corporate Finance (WA) Pty. Ltd. Lithium Australia said it has identified areas of concern regarding the analysis and conclusions reached in the report.

* Neometals Ltd. is selling out of the Mount Marion lithium project in Western Australia and placed its 13.8% stake in project owner Reed Industrial Minerals Pty. Ltd. on the sale block for about US$96.0 million.

* Gem Diamonds Ltd. recovered a 114-carat, D color Type II diamond of exceptional quality from the Letseng mine in Lesotho.

* The Russian Federal Security Service is said to be investigating PJSC Alrosa's Moscow office in relation to the sale of several of the company's noncore assets between 2011 and 2013, Reuters reported.

INDUSTRY NEWS

* Chinese President Xi Jinping arrived at U.S. President Donald Trump's Florida resort as the two leaders kicked off their first summit, CNN reported. The heads of state are expected to discuss a range of topics, including trade relations and the threat from North Korea.

* Gold and oil futures rose more than 1% after the U.S. fired 59 cruise missiles at a Syrian government air force base in retaliation for a gas attack days earlier that killed dozens of civilians.

* Federal Reserve Bank of San Francisco President John Williams said the U.S. central bank will likely begin reducing the size of its balance sheet later this year, Bloomberg News wrote. Williams also said he continues to believe that a total of three interest rate hikes will be appropriate this year.

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