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Reduced cash holdings prevalent among mining companies at close of June

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Reduced cash holdings prevalent among mining companies at close of June

Aggregate cash holdings for 608 companies with comparable semiannual financials listed on the Australia, London and Hong Kong stock exchanges was up a modest 0.4% at US$67.17 billion at the end of the first half of 2019, compared to US$66.93 billion at the close of the second half of 2018.

For the 937 companies that report cash balances to the Toronto, Shanghai and New York bourses on a quarterly basis, cash on hand was down 10.8% at US$32.89 billion at the end of the June quarter, from US$36.89 billion at the close of the March quarter. For some Toronto-listed companies with fiscal periods not aligned with the calendar year, quarterly information reflected is for the most recent reporting period end date.

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The 22 companies with comparable data listed in the London Stock Exchange had aggregate cash balances of US$27.35 billion at the close of the first half, down 3.4% from the preceding half-year period. Rio Tinto saw cash on hand drop 36.3% half over half to US$6.86 billion, due in part to dividends and asset purchases.

PJSC Norilsk Nickel Co. and Antofagasta PLC saw their respective cash balances surge 151.3% to US$3.49 billion and 111.6% to US$2.19 billion, helped by strong inflows from operations. Compared to the first half of 2018, Norilsk Nickel's first-half 2019 EBITDA rose 21% to US$3.72 billion, while copper producer Antofagasta's EBITDA jumped 44.4% to US$1.31 billion.

The 553 companies on the ASX, including Appendix 5B-filers, had combined cash holdings of US$26.96 billion, increasing 9.0% from the prior half-year period. Mining giant BHP Group's cash balance was nearly flat over the period at US$15.61 billion, as inflows from operating and investing activities were offset by outflows for financing activities.

Iron ore producer Fortescue Metals Group Ltd.'s cash holdings were 94.8% higher at US$1.87 billion, as fiscal-year 2019 underlying EBITDA jumped 90% from the previous year to US$6.05 billion aided by strong iron ore pricing. Conversely, Alumina Ltd. posted an 82.0% decline in cash on hand to US$33.0 million, primarily due to dividend payouts and debt repayment.

Appendix 5B-filer Gold Road Resources Ltd.'s cash on hand climbed 43.2% to US$44.4 million, helped by borrowings.

At the Hong Kong stock exchange, the 33 mining companies with comparable semiannual filings held a total cash balance of US$12.86 billion at the end of the first half of 2019, down 7.3% from the prior half. Zijin Mining Group Co. Ltd., which had the largest market value on the exchange, had cash on hand of US$1.38 billion, 6.1% lower. Gold miner Zhaojin Mining Industry Co. Ltd. saw a 210.0% increase in cash balance to US$515.3 million, while diversified miner MMG Ltd.'s cash on hand fell 59.8% to US$242.0 million due in part to debt repayment and other financing costs related to borrowings.

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For the 17 companies on the NYSE, cash holdings at the end of the second quarter totaled US$9.29 billion, 18.5% lower than the previous three-month period. Newmont Goldcorp Corp., the combined entity formed after Newmont Mining Corp.'s acquisition of Goldcorp Inc., had cash balances 48.5% lower quarter over quarter at US$1.83 billion. Repayment of Goldcorp debt upon completion of the takeover constituted its largest cash outflow.

Gold miner Agnico Eagle Mines Ltd. saw cash holdings fall 37.5% to US$118.7 million, driven largely by capital spending.

An aggregate cash balance of US$14.54 billion was reported in the second quarter for the 161 companies listed on the Toronto Stock Exchange down 4.5% from the first quarter. Cash inflows from operations offset by outflows for investing and financing in the second quarter left cash holdings flat on a quarterly basis for Barrick Gold Corp. at US$2.15 billion and Lundin Mining Corp. at US$735.1 million.

Proceeds from borrowings contributed to a 449.4% quarter-over-quarter surge in cash on hand to US$398.9 million for precious metals royalty and streaming company Franco-Nevada Corp.

Combined cash on hand for the 729 companies listed on the TSX Venture Exchange, which is known for housing small-capitalization juniors, was up 6.3% quarter over quarter at US$1.05 billion. Victoria Gold Corp. logged a 437.8% jump in cash balances to US$50.3 million, bolstered primarily by financing activities. Canadian diversified miner New Pacific Metals Corp. posted a 150.9% gain in cash balance to US$21.3 million on the back of proceeds from the issuance of common shares.

For the Shanghai Stock Exchange, the 30 mining companies with comparable quarterly data had combined cash holdings at US$8.01 billion as of June 30, 13.6% lower than at the end of the March quarter. Cash outflows for investing activities helped drive down cash balances for bourse market-cap leader Shandong Gold Mining Co. Ltd. and aluminum producer Guangdong Hec Technologyholding Co. Ltd. Cash on hand was 10.8% lower on a quarterly basis at US$421.0 million for Shandong Gold and down 74.5% at US$198.8 million for Guangdong Hec.

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