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Wesfarmers lobs A$1.5B bid for Lynas; MMG's Las Bambas copper mine issues worsen

Mining Exploration Insights December

Mining Exploration Insights: Dip in gold drilling weighs on results

Mining Exploration Insights: Is the exploration sector back on recovery?

State of the Market: Mining Q2-2019


Wesfarmers lobs A$1.5B bid for Lynas; MMG's Las Bambas copper mine issues worsen

TOP NEWS

Wesfarmers makes A$1.5B bid for Lynas

Rare earths producer Lynas Corp. Ltd.'s ASX shares were up more than 31% during morning Asia trading hours on West Australian diversified major Wesfarmers Ltd.'s A$1.5 billion cash bid for it. Wesfarmers announced its non-binding indicative proposal to acquire Lynas for A$2.25 per share, a 44.7% premium to the target's last closing price of A$1.55. Lynas has thus far only said that the bid was unsolicited and "highly conditional," that its shareholders need not take any action just yet.

MMG to declare force majeure on copper shipments from Las Bambas mine

MMG Ltd. will declare force majeure under sales contracts for copper produced at the Las Bambas mine in Peru after protests by the local Fuerabamba community are expected to "progressively impact" production. Protests made by the local community near the entrance of the mine are now disrupting the transport of personnel, as well as inbound and outbound logistics of the operation. Meanwhile, the Fuerabamba community in Peru vowed not to participate in negotiations aimed at ending the road blockade following the arrest of its president and its lawyers over allegations of extortion, Reuters reported.

Newmont dangles US$470M special dividend ahead of Goldcorp merger

In the wake of widening shareholder pushback against a planned merger with Goldcorp Inc., Newmont Mining Corp. said it would offer a special dividend of 88 US cents per share worth about US$470 million to premerger shareholders. Van Eck Associates Corp. had said the deal gave away too much to incoming Goldcorp shareholders, but expressed support in response to the dividend decision. Paulson & Co. Inc. also said it will no longer oppose the deal, according to Bloomberg News.

DIVERSIFIED

* Earth AI Pty Ltd., a company harnessing artificial intelligence and big data in the search for mineral resources in Australia, will apply for gold and base metals permits in New South Wales and Western Australia in September after inaugurating its own automated rig in April targeting copper, zinc and vanadium in the Northern Territory.

BASE METALS

* Construction of Minsur SA's Mina Justa copper-gold mine in Peru is on schedule, with 20% completed to date. The company expects to end works in mid-2020 and start operations by the end of that year, daily Gestión reported, citing CEO Juan Luis Kruger.

* Pancontinental Resources Corp. secured an option to acquire the 4,170-hectare St Laurent project in Ontario as part of its battery and energy metals exploration plan. The project contains an advanced exploration target hosting a 600-meter anomaly with associated nickel-copper-cobalt-gold-platinum-palladium mineralization.

* Codelco dismissed Canadian engineering firm SNC-Lavalin Group Inc. after the latter allegedly did not honor its obligations under a US$260 million contract that included building sulfuric acid plants at the Chuquicamata copper mine in Chile, Reuters wrote.

* Glencore PLC resumed normal operations at its McArthur River zinc mine, which were suspended in the wake of Cyclone Trevor, according to a separate Reuters report.

* An updated pre-feasibility study for Pacifico Minerals Ltd.'s Sorby Hills lead-silver-zinc project in Western Australia outlined a pretax net present value, at an 8% discount, of A$243 million, with a 62% internal rate of return and 16-month payback period from commercial production.

* Erris Resources PLC's soil sampling at its Abbeytown zinc project in Ireland identified three new targets up to 1.25 kilometers southwest of the mine.

* CanAlaska Uranium Ltd. agreed to buy the past-producing Manibridge nickel mine in Manitoba from Pure Nickel Inc.

PRECIOUS METALS

* Zijin Mining Group Co. Ltd.'s net profit attributable to shareholders for 2018 rose 16.7% to 4.09 billion yuan, thanks to increased production. President and Vice Chairman Lan Fusheng on March 25 said the company is seeking M&A opportunities and 5 billion Chinese yuan of its capex this year will be used on M&A.

* Independence Group NL has received offers for its 30% interest in the Tropicana gold mine in Western Australia, but the company wants to understand the mine's true value before making any decision, The Australian reported. Managing Director Peter Bradford also confirmed that the company has started a sale process for its shuttered Long nickel mine in Western Australia.

* Eric Sprott will retire as the chairman and board member of Kirkland Lake Gold Ltd. following the company's May 7 annual general meeting of shareholders. Jeff Parr will assume the role as interim chairman.

* Lonmin PLC Chairman Brian Beamish conceded that the company, which is being acquired by Sibanye Gold Ltd. in a £285 million all-share deal, does not have enough funds to make new investments needed to avoid layoffs.

* Galantas Gold Corp. plans to increase gold processing at its Omagh gold processing plant in Northern Ireland. The company plans to achieve production of 2,000 to 2,500 troy ounces of gold in concentrate per month in 2020/2021.

* Caledonia Mining Corp. PLC is looking to make further investments in Zimbabwe amid a currency crisis, Reuters reported, citing CFO Mark Learmonth, who said the company is considering acquiring brownfield projects using some of the surplus cash generated from its Blanket gold mine.

* Westgold Resources Ltd. agreed to sell its Higginsville gold operations to RNC Minerals for A$25 million in cash and A$25 million in shares.

BULK COMMODITIES

* An initial independent assessment of the existing Camrail rail network located adjacent to Canyon Resources Ltd.'s Minim Martap bauxite project in Cameroon concluded that it has the capacity to transport commercial tonnages of bauxite.

* Fitch Ratings assigned a BB- long-term issuer default rating to United Co. Rusal PLC, with a stable outlook, following the company's removal from the U.S.'s Office of Foreign Assets Control's list of specially designated nationals and blocked persons.

* A Brazilian court required Vale SA to suspend 13 dams in a decision that delayed the restart of its Brucutu iron ore mine, the company's biggest mine in the state of Minas Gerais. The March 22 decision of the Court of Santa Bárbara covers the Sul dam, which receives discharge from the concentration plant at Brucutu. The company did not provide a timeline on the mine's restart.

* Rio Tinto, BHP and Fortescue Metals Group Ltd. reported that their Australian operations suffered some impact after cyclones Trevor and Veronica battered the country over the weekend, Reuters wrote. Fortescue expects its iron ore shipments of between 1.5 million and 2 million tonnes to be delayed due to Veronica.

* Kore Potash PLC received an engineering, procurement and construction proposal for its Kola mine, part of the Sintoukola potash project in the Democratic Republic of the Congo, from the French Consortium of Engineering Companies. The company noted that the proposal was delivered after the Feb. 28 due date, but added that it will consider all development options for Kola.

* An update for Cazaly Resources Ltd.'s definitive feasibility study for its Parker Range iron ore project in Western Australia slashed capex costs by 23% to A$130 million from A$169.5 million outlined in a previous study. Operating costs were also reduced 12% to A$48.85 per tonne from A$55.29/t.

* Kalium Lakes Ltd. signed a 10-year off-take deal to supply K+S AG with 90,000 tonnes of sulfate of potash products annually from the Beyondie project in Western Australia.

* Warrior Met Coal Inc. closed a restricted payment offer for up to US$150 million of its 8.00% senior secured notes due 2024 at 103% of the aggregate principal amount and a separate tender offer for US$150 million of the notes at 104.25%.

* Mexico reimposed a 15% steel tariff on countries with which it does not have free trade deals, Reuters reported, citing the government's official gazette.

* European antitrust regulators launched an in-depth probe into Novelis Inc.'s proposed US$2.6 billion acquisition of aluminum products-maker Aleris Corp.

* Norsk Hydro ASA's extruded solutions division is now running at 60% capacity following last week's cyberattack.

SPECIALTY

* Pilbara Minerals Ltd.'s scoping study for the stage three expansion at the Pilgangoora lithium-tantalum project in Western Australia estimated a posttax net present value, discounted at 10%, of A$3.73 billion. The stage three project includes increasing the overall plant throughput to 7.5 million tonnes per annum, compared to 5 mtpa in stage two, at an estimated incremental capital cost of A$225.8 million.

* Separately, Pilbara Minerals reported minimal damage at the Pilgangoora operations caused by cyclone Veronica. However, the company flagged minor shipment delays over the coming week as the Pilbara Ports Authority continued to suspend ship-loading activities within Port Hedland.

* Greenland Minerals Ltd.'s optimization studies at its Kvanefjeld rare earth project in Greenland cut capital costs by 44% to US$175 million, including indirect costs and contingency, compared to a 2016 feasibility study.

* Capital pool company Spirit Banner II Capital Corp. entered a binding letter to purchase all of Five Star Diamonds Ltd.'s six diamond projects in Brazil. Five Star intends to change its name to Star Royalties Ltd. and continue as a royalty and stream company.

* Starting April 5, Chile will accept bids from companies looking to develop battery materials using discounted lithium produced by Sociedad Quimica y Minera de Chile SA as part of the company's 2018 deal with the authorities, Reuters reported.

* Finnish energy company Fortum Oyj will start recycling lithium-ion batteries while piloting "second-life" applications where electric vehicle batteries are used for stationary energy storages after they are no longer fit for their original purpose.

* The U.S. Federal Trade Commission withdrew Tronox Ltd.'s proposed takeover of Saudi Arabia-based National Titanium Dioxide Co. Ltd. from adjudication as it considers the company's divestiture plan.

* Relentless Resources Ltd. put its IPO — originally slated for February — on hold while it aims to potentially quadruple the net present value of its heavy mineral sands projects in New South Wales, Australia.

INDUSTRY NEWS

* Australia's miners have issued a scathing report suggesting the country's lack of major tax reform in nearly 20 years has seen it fall behind in competitiveness while other competing mining countries have lowered their company tax rates.

* Western Australia's volume of spodumene concentrate sales in 2018 rose 24% over 2017 to a record of 2.1 million tonnes. Meanwhile, gold sales volumes increased for the third year in a row to 212 tonnes in 2018, their highest level since 1998.

* The European Union completed its preparations for a no-deal Brexit as the U.K. seems increasingly likely to crash out of the bloc without a withdrawal agreement April 12, according to the European Commission.

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