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In This List

Mongolia to improve Oyu Tolgoi deals; Energy Resources' A$476M offering halted

Mining Insights Newsletter June 2020

A Decade of Underperformance for Gold Discoveries

State of the Market: Mining Q1-2020

Mining Exploration Insights - April 2020


Mongolia to improve Oyu Tolgoi deals; Energy Resources' A$476M offering halted

TOP NEWS

Mongolian Parliament approves resolution to improve Oyu Tolgoi deals

The Mongolian Parliament unanimously approved a resolution instructing the government to improve the investment and financing agreements covering Turquoise Hill Resources Ltd.'s 66%-owned Oyu Tolgoi copper-gold mine. The resolution tells the government to improve the implementation of the 2009 investment agreement, the 2011 shareholder agreement, and the 2015 underground mine development and financing plan, which was recently validated by a Mongolian court.

Regulator halts Energy Resources of Australia's A$476M offering

The Australian Takeovers Panel suspended Energy Resources of Australia Ltd.'s A$476 million renounceable entitlement offer after flagging a possible takeover by Rio Tinto at the expense of minority shareholders. The panel ruled that Rio Tinto cannot make a compulsory acquisition of shares in Energy Resources of Australia without shareholder approval.

Report: US Army to invest in rare earths plant

The U.S. Army will invest in a rare earths plant as part of the country's efforts to boost the domestic supply of the minerals used in military weapons and technology, Reuters reported, citing a government document. The Army reportedly asked miners for a proposal on the cost of a pilot plant, with responses due Dec. 16. Ucore Rare Metals Inc., Texas Mineral Resources Corp., and a joint venture of Lynas Corp. Ltd. and privately held Blue Line Corp. are among the expected respondents, the report said.

DIVERSIFIED

* Commodities trader Trafigura Group Pte. Ltd.'s metals and minerals segment booked a full-year 2019 gross profit of US$1.30 billion, or 44% of the overall group's record profit of US$3.0 billion. It said results in 2020 could be better than 2019 as the market environment remains favorable for oil and metals. "Prices remain relatively volatile and uncertainty is being enhanced by a tense geopolitical environment, protracted trade negotiations and specific disruptions, such as the implementation of the IMO 2020 rule change limiting sulfur emissions from the global shipping fleet."

BASE METALS

* First Quantum Minerals Ltd. has not received any takeover offers from potential bidders, including from Rio Tinto, since September, Bloomberg News reported, citing a phone interview with First Quantum President Clive Newall. In the report, Newall said that while management was surprised by Jiangxi Copper Co. Ltd.'s US$1.12 billion purchase of an almost 18% stake, there is no chance that would lead to a takeover.

* German copper producer Aurubis AG booked a 3% yearly increase in operating earnings before taxes to €67 million for the fourth quarter of its fiscal 2019 while recording a 42% decrease for the full year to €192 million driven by one-off impairment losses in the flat rolled products segment and maintenance shutdowns. The company recommended a dividend of €1.25 per share, down from €1.55 in the previous year.

* Indonesia is set to double royalties on nickel ore sales to 10% while adjusting the rates for other minerals such as copper, bauxite and aluminum, Reuters reported. The copper ore royalty was increased to 5%, and the copper concentrate royalty was set at 4%. The bauxite royalty was doubled to 7%, and the aluminum royalty was cut to 2%. The regulations also include a 5% royalty on nickel pig iron sales.

* Cadillac Ventures Inc. granted Northern Fox Resources Inc. an option to earn up to a 61% interest in the Thierry copper property in Ontario.

* Quaterra Resources Inc. secured two options to acquire 678 unpatented mining claims collectively called the Butte Valley porphyry copper-gold prospect in Nevada.

PRECIOUS METALS

* IAMGOLD Corp. exercised in advance its option to increase its stake in the Nelligan gold project in Quebec to 75% by delivering a maiden resource estimate and paying Vanstar Mining Resources Inc. about C$2.4 million. IAMGOLD can earn a further 5% stake by delivering a feasibility study on Nelligan.

* Ora Gold Ltd.'s scoping study for its Crown Prince gold deposit in Western Australia expects the project to produce 22,444 ounces and generate about A$21.1 million net operating surplus, including royalty payments. Predevelopment activities are estimated to cost A$1.4 million, including 30% contingency and mobilization.

* Patagonia Gold Corp.'s deal to acquire up to an 80% interest in the San Jose gold project in Uruguay from Trilogy Mining Corp., American Mining Holdings Ltd., Ecovent SA and Minerales Cala SA, was terminated.

* Goldstar Minerals Inc. secured an option to acquire the early-stage Anctil and Nemenjiche gold properties in Quebec from Les Ressources Tectonic Inc., with closing expected Feb. 15, 2020. The company can acquire the properties by paying an aggregate C$570,000, spending C$2.2 million on exploration over three years, and granting a 2% net smelter royalty, which can be bought back for C$5 million.

* Finnish gold explorer Endomines AB is considering redomiciling to Sweden from Finland through a cross-border merger. The company intends to continue its dual listing, with the main listing at Nasdaq Helsinki.

* Goldrea Resources Corp. is in negotiations to acquire the ground, known as Dixie Lake Baby, adjacent to the TNT Discovery on BTU Metals Corp.'s Dixie Halo gold project in Ontario.

BULK COMMODITIES

* German conglomerate thyssenkrupp AG is looking to improve margins at its elevators unit to make the unit more attractive to potential buyers and plans to decide on the unit's future in the first quarter of 2020. The company aims to increase the segment's adjusted EBIT margin to a range of 11.5% to 13.0% by fiscal 2020/2021 through measures that will boost efficiency and cut costs.

* German potash and salt miner K+S AG is considering selling a stake in the Bethune potash project in Saskatchewan, which the company values at nearly €5 billion, Reuters reported, citing an unnamed company spokesperson. The company said it was considering selling stakes in businesses in North America as ongoing cost-cutting initiatives will not generate enough savings to meet its target of net debt as 2.7x EBITDA by the end of 2020, from the recent level of 4.3x EBITDA.

* The National Union of Mineworkers in South Africa will march Dec. 13 to condemn the escalating violence at Rio Tinto's Richards Bay titanium mine that forced the mining giant to mothball the property, a decision that may lead to job losses, Mining Weekly reported.

* Zanaga Iron Ore Co. Ltd. and Glencore PLC's joint venture company, Jumelles Ltd., entered into a framework agreement with China Overseas Infrastructure Development and Investment Corp. Ltd. for potential cooperation on advancing infrastructure and financing requirements for the Zanaga iron ore project in the Republic of Congo. The priority is to explore the development of iron ore output of about 2 million tonnes per annum at Zanaga.

* SRG Global Ltd. secured preferred tenderer status for a five-year, A$90 million contract to provide services at Alcoa Corp.'s Kwinana alumina refinery in Western Australia, Australian Mining wrote.

* Edenville Energy PLC signed two new contracts to supply washed coal from its flagship Rukwa coal project in Tanzania. The company will supply up to 6,000 tonnes and up to 3,000 tonnes, respectively, of washed coal per month to industrial customers in Rwanda and Uganda.

SPECIALTY

* A report from the administrators of lithium miner Alita Resources Ltd. identified a number of legal violations, including the possibility that it may have been trading insolvent two months before it collapsed, The Australian Financial Review wrote. The report also suggests that China Hydrogen Energy Ltd. and its Liatam Mining unit will become Alita's new owners, the report said.

* South Africa's Department for Energy and Mining issued an approval to Renascor Resources Ltd. to extract a 60-tonne bulk sample from the company's Siviour graphite project. Ore extracted from the bulk sample will be used in a pilot plant production trial in China.

* Kenmare Resources PLC secured a US$110 million term loan facility and a US$40 million revolving credit facility mainly to repay US$64 million in senior and subordinated project loans obtained for the Moma titanium mine in Mozambique and for working capital purposes. The facilities will also provide for a future mine closure guarantee facility of up to US$40 million.

INDUSTRY NEWS

* Harmony Gold Mining Co. Ltd. resumed underground shifts at its nine mines in South Africa after state utility Eskom Holdings SOC Ltd. scaled back rolling blackouts. Petra Diamonds Ltd. said it resumed mining operations, which are running at a 20% load curtailment in line with Eskom's requirements.

* Madagascar is looking to double its royalties on nickel, cobalt, precious metals and gemstones to 4% from 2%, Reuters reported, citing a draft mining law that also proposes that the government take at least a 20% interest in any marketable mining production. The bill, confirmed by the country's mines minister, Fidiniavo Ravokatra, includes a jump in mining royalties for raw precious stones to 8% from 2%, a 6% royalty on rough industrial stones and a 3% royalty on cut industrial stones.

* Exploration budgets for Canada have fallen by 9%, or US$134 million, year over year in 2019 to US$1.31 billion, dropping the country to second place behind Australia from first place in 2018, according to the Metals and Mining Research team of S&P Global Market Intelligence. The decrease exceeds the global average decrease of 3% in 2019 and, in dollar terms, is second only to Mexico, whose allocations have fallen by US$155 million.

* Trade union United Steelworkers International backed the approval of a revised United States-Mexico-Canada Agreement, which it believes has better terms compared with the original deal and the existing North American Free Trade Agreement.

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