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In This List

Hecla to acquire Klondex for US$462M in cash, shares

State of the Market: Mining Q1-2020

Mining Exploration Insights - April 2020

Mining Exploration Insights December

Mining Exploration Insights: Dip in gold drilling weighs on results


Hecla to acquire Klondex for US$462M in cash, shares

TOP NEWS

Hecla to acquire Klondex for US$462M in cash, shares

Hecla Mining Co. will acquire Klondex Mines Ltd., which holds the Fire Creek, Midas and Hollister gold mines in Nevada, in a deal valuing the latter at US$462 million. The Canadian assets of Klondex will be spun out to its existing shareholders. Meanwhile, striking workers at Hecla's Lucky Friday silver mine in Idaho commemorated the one-year anniversary of the labor action, Mining.com reported. United Steelworkers had said its members "overwhelmingly voted" to remain on strike and continue pushing for better labor standards.

Vale CEO seeks new dividend policy based on cash flow

Vale SA CEO Fabio Schvartsman is leaning toward a new dividend policy that is hinged on the company's cash flow generation instead of its financial results, the Financial Times reported. The company's board is expected to decide on the policy this month as Vale aggressively cuts debt to set the stage for steadier cash returns to shareholders over the coming years.

BHP to keep Escondida's copper output at 1.2 million tonnes over next 10 years

BHP Billiton Group's 57.50%-owned Escondida copper mine in Chile is expected to produce between 1.13 million and 1.23 million tonnes of copper this year, and the company intends to keep producing about 1.2 million tonnes of copper per year from the mine for the next 10 years, The Australian reported. The company said the ramp-up at the mine is almost complete, after investing about US$8 billion in the project over the past six years.

DIVERSIFIED

* Glencore PLC won a tender to supply diesel and marine diesel to Angolan state oil company Sonangol, while Total was awarded the tender for the supply of gasoline, Reuters reported, noting that the two firms beat long-time supplier Trafigura.

BASE METALS

* Colombia's constitutional court said in a ruling that South32 Ltd.'s Cerro Matoso nickel mine must "provide comprehensive and permanent attention" to indigenous and Afro-Colombian communities affected by the mine's operations and directed the company to pay damages to these communities collectively through a special fund, Reuters reported.

* KGHM Polska Miedz SA expects daily copper ore output at its Sierra Gorda mine in Chile to increase by 18% to 130,000 tonnes in 2019, from the current 110,000 tonnes of ore per day, Reuters reported, citing CFO Stefan Swiatkowski.

* Codelco Chairman Oscar Landerretche Moreno revealed that due to higher copper prices, the miner made a profit of US$2.88 billion in 2017, Mining.com reported, citing a report published in local paper La Tercera. The state-owned miner had posted a pretax profit of US$435 million for 2016, swinging year over year from a loss of US$2.19 billion.

* Carnavale Resources Ltd. signed a deal to acquire gold tenements M28/0378, E28/1477 and E28/2226, forming the Grey Dam nickel-cobalt project and part of KalNorth Gold Mines Ltd.'s Kurnalpi gold project in Western Australia, for A$110,000.

* Alara Resources Ltd. signed a heads of agreement with South West Pinnacle Exploration Ltd. to form a joint venture providing drilling and mineral exploration services in Oman.

* Rox Resources Ltd. restructured its Bonya copper joint venture with Arafura Resources Ltd. The revised deal sees Rox divesting 11% of its 51% interest in the joint venture minerals in exchange for a 40% stake in the tungsten and molybdenum mineralization at the project, previously wholly owned by Arafura.

* PT Timah Tbk. is targeting output of 2 million tonnes of tin per annum by 2021, Indonesia's Antara News Agency reported. The company's tin ingot output reached 31,000 tonnes in 2017, with 60% derived from offshore mining, said Trenggono Sutioso, the company's business and commercial development director.

* Avanco Resources Ltd. posted a maiden resource estimate for the Pantera copper project in Brazil of 20.8 million tonnes at 1.7% copper and 0.2 g/t of gold containing 350,000 tonnes of copper and 140,000 ounces of gold in the inferred category.

PRECIOUS METALS

* An updated feasibility study for the Wafi-Golpu gold-copper joint venture between Newcrest Mining Ltd. and Harmony Gold Mining Co. Ltd. estimated a net present value, discounted at 8.5%, of US$2.60 billion, an internal rate of return of 18.2% and a 9.5-year payback period. Total CapEx fell from US$6.38 billion to US$5.38 billion.

* Alio Gold Inc. agreed to acquire Rye Patch Gold Corp. through an all-share deal valuing the latter at about C$128 million.

* Anaconda Mining Inc. plans to make a formal bid to acquire Maritime Resources Corp., offering 0.364 of a common Anaconda share for each Maritime share. Anaconda had submitted an offer to Maritime on Jan. 29 and will now take the offer straight to Maritime shareholders.

* Nkwe Platinum Ltd. received a nonbinding proposal from 60.47%-shareholder Zijin Mining Group Co. Ltd. for the latter to acquire Nkwe's issued share capital it does not already own for 8 Australian cents each.

* Beadell Resources Ltd. and Golden Harp Resources Inc. agreed to a deal that will see every 14.25 Beadell shares exchanged for 1 post-consolidation Golden Harp share. The merged entity will be named Americano Mining Inc.

* Sierra Metals Inc. said a strike initiated by a group of unionized contract workers at its polymetallic Yauricocha mine in Peru ended following negotiations between the two sides. The labor action will not have any impact on the company's 2018 production and cost guidance.

* Pacific Topaz Resources Ltd. signed a nonbinding letter of intent to acquire privately held mineral exploration company Western Atlas Resources Inc. Closing is anticipated within 50 to 75 days, subject to various approvals.

* Panex Resources Inc. signed an earn-in agreement to acquire up to an 80% interest in Scotgold Resources Ltd. unit Scotgold Resources Portugal Ltda., which holds the Pomar license.

BULK COMMODITIES

* South Africa's Moti Group is looking to double its investments in Zimbabwe to US$500 million after President Robert Mugabe was replaced, with the company looking to spend US$250 million over the next four years on interests ranging from chrome ore mining to fertilizer and diamond polishing, Bloomberg News reported. Moti has about US$250 million invested in Zimbabwe, mostly in the mining sector.

* According to The Economic Times of India, shares of state-owned National Mineral Development Corp. Ltd. fell over 4% on March 19 after the company decided to skip dividend payments for fiscal 2018.

* Several trade unions in India's coal mining sector are uniting in opposition to the government's plan to open up coal mining in the country to private miners, though the forms of protest differ, Mining Weekly wrote.

* Norsk Hydro ASA will invest 500 million Norwegian kroner to upgrade the water treatment system at its Alunorte alumina refinery in Brazil. The planned upgrade is expected to be completed within the first quarter of 2019. The company has also expanded the scope of the ongoing independent review of the refinery and will launch an internal audit after an infraction notice from Para state's Secretariat of Environment and Sustainability.

* Rio Tinto tapped Swiss investment bank UBS Group AG to explore a possible listing of the company's Pacific Aluminium Pty. Ltd. unit on the ASX, Reuters reported, citing two industry sources.

* BHP and Vale SA joint venture Samarco Mineração SA appointed Rodrigo Alvarenga Vilela the interim CEO, replacing Roberto Lúcio Nunes de Carvalho, Metal Bulletin reported.

* China Shenhua Energy Co. Ltd.'s commercial coal output slipped 10.4% year over year to 22.4 million tonnes in February, while monthly coal sales dropped 13% to 33.5 million tonnes.

* Alumina refineries in China's Henan province may delay the planned restart of operations due to rising costs for bauxite amid a supply shortage, Reuters reported, citing Antaike. Alumina refineries and aluminum smelters in parts of the country slashed their production by 30% during the November to March heating season to combat air pollution.

* The European Commission called for industry feedback on a 10-page list of U.S. products that could be subject to import tariffs, in case the U.S. government does not grant the EU exemption, Reuters reported. The commission earlier said it could retaliate by setting duties of 25% on a range of U.S. products.

* Effective March 19, the U.S. Department of Commerce will start accepting requests for product exclusions from the country's newly implemented steel and aluminum import tariffs, but the agency could take up to 90 days to make determinations.

* Meanwhile, the White House said President Donald Trump is in negotiations with several countries on the possibility of granting exemptions to the trade tariffs, Reuters reported.

* According to a report by German magazine Der Spiegel, the U.S. is seeking to cap exports of the metals from Europe at 2017 levels in exchange for providing the EU exemption from the steel and aluminum tariffs, Reuters reported.

* Goa's mining industry body sought clarity from the Indian government on the suspension of iron ore mining operations in the state and warned that failure to resume activities could result in job losses, Press Trust of India reported.

* Tokyo Steel Manufacturing Co. Ltd. will retain the prices of its products at current levels for the second straight month in April to allow the market to absorb three consecutive months of rate hikes, Reuters reported.

SPECIALTY

* Investors enamored with Australian and Toronto-listed graphite plays should take heed that the market could be turned on its head within five years as multiple disruptors lie in their path, experts warned. Warwick Grigor, who started Sydney-based private investment bank Far East Capital Ltd. Research Division with Fortescue Metals Group Ltd. Chairman Andrew Forrest, told S&P Global Market Intelligence that the graphite market is at a "critical point," with known strong demand ahead but that will not have an impact for another three years potentially.

* Chile's new government has not made a decision on whether to support a petition filed by state development agency Corfo to block the sale of Nutrien Ltd.'s 32% stake in Sociedad Quimica y Minera de Chile SA to China's Tianqi Lithium Industries Inc. and will review the consequences of the move, Reuters reported, citing a government official.

* Prospect Resources Ltd. updated its pre-feasibility study on the Arcadia lithium project in Zimbabwe, estimating a pretax net present value, discounted at 10%, of US$340 million, a 77% internal rate of return and a two-year payback period.

INDUSTRY NEWS

* As Kazakhstan prepares to implement more measures this year to attract mining investment, Western Australia, on whose regime its new mining code is based, has warned about resources companies' methods of reducing tax payments. The Asian country's tax code was amended Jan. 1 to remove the profit tax for miners and allow exploration deductions, and S&P Global Market Intelligence has learned that more amendments are on the way later this year.

* Over 40 companies that are now part of Canada's growing marijuana sector started in the mining or oil and gas sectors, changing businesses as the country moves to legalize marijuana. According to Bloomberg News, almost half of Canada's marijuana companies started out in the resource sector.

* Junior Australian exploration companies lauded the passage of the Treasury Laws Amendment (Junior Minerals Exploration Incentive) Bill 2017 through the Senate. According to Mining Weekly, included in the bill is a tax credit arrangement that will allow companies with no mining income to renounce and pass future tax deductions to their Australian resident investors.

* Major miners have not shied away from backing Colombia-focused juniors in the past year, suggesting their appetite for new developments and discovery in Colombia may be picking up. "I think it's going to explode over the next two or three years," Continental Gold Inc. CEO Ari Sussman said. "We're seeing the beginning stage of an influx of large companies into Colombia."

* Mali is in talks with mining companies for the revision of the country's mining code but could implement the new law unilaterally if an agreement is not reached, Reuters reported, citing Economy Minister Boubou Cisse.

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.