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Cash holdings of mining companies decline 1.8% in Q3

A review of 1,597 companies listed on the Australia, London, New York and certain Canadian stock exchanges with comparable data shows the mining industry's aggregate cash holdings decreased 1.8% to US$45.16 billion at the end of the third quarter from US$46.01 billion at the close of the second quarter.

The current iteration of this review excludes a number of large Australia- and London-based mining companies that report cash holdings biannually.

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Companies trading on the TSX Venture Exchange, based in Calgary, Alberta and known for housing small-capitalization juniors, saw the largest decline in aggregate cash holdings, at nearly 20%. The 809 companies on the exchange held US$1.29 billion at the end of the third quarter, compared to US$1.60 billion at the end of the prior quarter.

Mason Graphite Inc., the TSX-V-traded company with the highest market capitalization, saw its cash holdings decline 15% quarter over quarter to US$26.2 million. Despite being a quarter-over-quarter decrease, the company booked a 148% increase year over year. Some companies on the TSX-V managed to buck the quarter-over-quarter downward trend. Barkerville Gold Mines Ltd., for instance, saw cash holdings increase nearly 140% quarter over quarter to US$20.2 million.

Toronto Stock Exchange aggregate cash holdings were also down quarter over quarter, dropping 5% to US$18.69 billion, with 186 companies reporting comparable data. Barrick Gold Corp., the largest company on the exchange in terms of market capitalization, saw cash holdings decline nearly 19% quarter over quarter to US$1.70 billion. Kinross Gold Corp. and Avesoro Resources Inc., two other major companies on the exchange, saw cash holdings fall significantly, by 49% and 32%, respectively.

In the absence of major ASX companies reporting their cash holdings, Appendix 5B-reporting juniors dominated the list that included 571 Australian companies with an aggregate cash holding of US$2.56 billion at the close of the third quarter, down 2.6% from the end of the second quarter.

Australia-based Pilbara Minerals Ltd., which focuses on producing lithium, saw cash holdings decline more than 26% quarter over quarter to US$65.6 million. Altura Mining Ltd., another lithium producer in Australia, saw cash holdings tumble 64% to US$7.6 million at the close of the third quarter. The decreases come as lithium producers feel the effects of plummeting prices in China. Producers of other commodities managed to buck the trend, with graphite producer Syrah Resources Ltd. realizing a 77% increase in cash holdings and Lynas Corp. Ltd., which focuses on rare earths, seeing a 52% increase.

For 24 companies on the NYSE, overall cash holdings booked a slight quarter-over-quarter uptick to US$18.09 billion. Freeport-McMoRan Inc. saw its cash holdings increase 18% to US$4.56 billion, rounding out a strong third-quarter performance that included profit increases thanks in part to stronger-than-expected copper and gold sales.

While aggregate cash holdings for companies on the NYSE increased, many companies saw significant quarter-over-quarter declines. Cash holdings for FMC Corp. dropped 46% to US$176.5 million, while cash holdings for Albemarle Corp. declined approximately 29%, ending the third quarter with US$641.2 million in cash holdings.

Given the semiannual reporting of London-listed miners, only seven companies on the exchange were included in the current iteration, reflecting a 7% quarter-over-quarter increase in aggregate cash holdings to US$4.53 billion in the third quarter. PJSC Novolipetsk Steel saw cash holdings jump 24% quarter over quarter to US$1.20 billion, after recording an 82% increase year over year in net profit for the three-month period. However, several of the larger companies on the exchange saw declining cash holdings, including PAO Severstal, down 23% to US$1.05 billion, and SolGold PLC, dropping 35% to US$39.4 million.

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