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Vale back in black with US$1.78B Q1 net income; First Quantum returns to profit in Q1; Buenaventura's Q1 net income jumps 198% YOY

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020


Vale back in black with US$1.78B Q1 net income; First Quantum returns to profit in Q1; Buenaventura's Q1 net income jumps 198% YOY

TOP NEWS

Vale back in blackwith US$1.78B Q1 profit

in the black, posting a netincome of US$1.78 billion in the first quarter compared to a net loss ofUS$3.12 billion in the same period of 2015. Net operating revenues fell by 5.5%to US$5.72 billion as a result of seasonally lower sales volume of iron orefines, base metals and fertilizers, which were partially offset by higher salesprices for iron ore fines. Underlying earnings for the period totaled US$514million or 10 cents per share, compared to an underlying loss of US$679 millionlast year. However, the company's total net debt for the quarter rose by 1.7%to US$27.66 billion due to forex impacts and a negative free cash flow in thequarter.

shifted back into positive territory in the first quarter, net earnings from continuingoperations attributable to shareholders of US$49 million from a net loss of US$78million in the same quarter of 2015. During the quarter, First Quantum achievedits highest quarterly copper production and sales for continuing operations of119,287 tonnes and 131,267 tonnes, respectively.

Buenaventura's Q1net income up 198% YOY

Compañía de Minas Buenaventura SAA posted a year over year in netincome to US$51.6 million for the first quarter of the year, despite a 4% dropin net sales to US$220.6 million. The company achieved the net income on theback of lower total operating costs, and gains from foreign exchange anddeferred income tax.

DIVERSIFIED

*Vale SA in the black,posting a net income of US$1.78 billion in the first quarter compared to a netloss of US$3.12 billion in the same period of 2015. Net operating revenues fellby 5.5% to US$5.72 billion as a result of seasonally lower sales volume of ironore fines, base metals and fertilizers, which were partially offset by highersales prices for iron ore fines. Underlying earnings for the period totaledUS$514 million or 10 cents per shares, compared to an underlying loss of US$679million last year. However, the company's total net debt for the quarter roseby 1.7% to US$27.66 billion due to forex impacts and a negative free cash flowin the quarter.

* Separately, Vale CFO Luciano SianiPires said it didnot seek permission to buy up to 15% of Fortescue Metals Group, BusinessDay reported. "We obviouslydo not have the resources nor the balance sheet to do it right now, so it ismore of a long-term optionality," Pires said. "It is welcome as anoption, but nothing that we want to pursue in the short nor even perhaps in themedium term."

BASE METALS

*First Quantum MineralsLtd. shifted back into positive territory in the first quarter,booking net earningsfrom continuing operations attributable to shareholders of US$49 million from anet loss of US$78 million in the same quarter of 2015. During the quarter,First Quantum achieved its highest quarterly copper production and sales forcontinuing operations of 119,287 tonnes and 131,267 tonnes, respectively.

*Separately, the construction of First Quantum's Taca Taca copper-gold project in Argentinawill beginin 2018, once the environmental impact study is approved and otherprocedures are completed by 2017, ElTribuno reported. The Canadian miner expects to initially invest about US$3billion in the production of 244,000 tonnes of copper concentrate and 110,000ounces of gold per year.

*HudBay Minerals Inc.more than doubled itscopper production during the first quarter to 38,879 tonnes from 15,008 tonnesa year earlier, representing a 159% increase. Meanwhile, first-quarter goldproduction climbed to 27,245 ounces from 23,676 ounces in the same quarter of2015 and silver output grew to 722,916 ounces from 310,867 ounces. Zincproduction rose year over year to 23,376 tonnes from 22,906 tonnes.

*Jiangxi Copper Co. Ltd.'sfirst quarter net profit attributable to shareholders year over year to 201.4million yuan. Total operating revenue climbed 19.66% to 38.85 billion yuan,while total operating costs also rose to 38.57 billion yuan from 32.51 billionyuan.

*Mines and metals processor Industrias Peñoles SAB de CV's net income , on a yearlybasis, in the first quarter to 404.3 million Mexican pesos. Net sales increased24.7% year over year to 19.43 billion pesos, but were partially offset byhigher cost of sales, from cost of metals purchased to third parties and higherproduction costs.

*China Molybdenum Co.Ltd.'s first-quarter net profit attributable to its shareholders plunged53.67% year over year to 141.1 million Chinese yuan, while operating incomealso declined 2.28% year over year to 1.16 billion yuan.

*Sumitomo Metal Mining Co.Ltd. will establishoperations for the recovery of scandium at its nickel plant with aninvestment of about ¥4 billion and has concluded a long-term sales agreement ofscandium oxide with a major U.S.-based fuel cell manufacturer.

*Union workers at Freeport-McMoRanInc.'s 51%-owned Chile-based copper mine accepted the company'swage deal offer, Reuters reported,citing union President Juana Mejias.

PRECIOUS METALS

* Compañía de Minas Buenaventura SAA posted a year over year in netincome to US$51.6 million for the first quarter of the year, despite a 4% dropin net sales to US$220.6 million. The company achieved the net income on theback of lower total operating costs, and gains from foreign exchange anddeferred income tax.

* Nord Gold NV said that its refined gold production decreasedto 209,500 ounces in the first quarter from the very high comparative quarterin 2015, at 266,700 ounces, which included 28,500 ounces of gold doré producedbut not refined at the end of 2014. Lower production was also due to decreasedoutput at the Bissa mine in Burkina Faso and Berezitovoye mine in Russia. Gold sold alsofell 28% year over year to 210,600 ounces.

*Agnico Eagle MinesLtd. booked increased gold production of in the first quarter ofthe year, compared to 404,210 ounces in the same quarter of 2015. TheToronto-based gold producer attributed the gain to higher grades and betterrecoveries at the LaRonde gold-silver mine in Canada, increased throughputat the Goldexgold mine in Canada and the Kittila gold mine in Finland, as well as higher gradesfrom the CanadianMalartic operation.

*Brixton Metals Corp.fully acquired thepast-producing Hudson Bay silver mine in the Cobalt mining camp in Ontario. Thecompany acquired the remaining stake in the property by issuing 27,300 commonshares as well as making a cash payment of C$1,000.

*Silver Bear ResourcesInc. entered into a nonbinding term sheet with its majorshareholders, Inflection Management Corp. Ltd. and A.B. Aterra Resources Ltd.,regarding an approximately US$48.4 million funding package consisting of a US$42.9million secured loan, a working capital facility of US$3.5 million and a contingencyfacility of US$2 million. Funds will be used to proceed with the finaldevelopment, construction and commissioning of its silver project inRussia.

*Torex Gold ResourcesInc. unit Media Luna SA de CV officially inauguratedthe ElLimon-Guajes gold mine in Mexico's Guerrero state, El Financiero reported. With an initialinvestment of US$800 million, the mine has a projected life of 15 years and isexpected to become one of the most important gold operations in the country.

*Goldcorp Inc. becamethe latest victim of a hack attack confirming a ofuncompressed employee data, Bloomberg News reported, citing Christine Marks, aspokeswoman for the company. The stolen data included worker login IDs andpasswords, salary and budget documents, and other sensitive information.

*The Kyrgyz Republic General Prosecutor's Office and other state law enforcementagencies conducted a search at Centerra Gold Inc. unit 's Bishkek-basedoffices to gather documents relating to a criminal case regarding allegedfinancial violationsby the unit. Mine operations, however, remain unaffected, the company added.

*First Mining FinanceCorp. completed the acquisition of the Pitt gold property in Quebec from

*Atlantic Gold Corp.'sDDV Gold Ltd. unit has secured an option to purchase partner 's stake inthe Touquoygold deposit in Nova Scotia.

BULK COMMODITIES

* United Co. RUSAL Plc's aluminum output inchedup to 916,000 tonnes in the first quarter from 900,000 tonnes a yearearlier, but slipped slightly from the December 2015 quarter, Reuters reported.The aluminum giant also said that metals prices are showing signs of improvingdue to global output cuts.

* China's improvedby 39.2% its net profit attributable to shareholders to in the first threemonths of the year compared to the same period of 2015. The group's operatingincome rose 36.1% year over year to 11.77 billion yuan, largely due to a 5.38billion yuan increase in revenue generated by Yanzhou's other businessesbesides coal, offsetting a 2.20 billion yuan decrease in sales revenue from thecoal business.

* Aluminum Corp. of China Ltd.'s first quarter profitattributable to owners of the parent fell by 60% to 19.2 million Chinese yuan from a restated48.0 million yuan in the same period of 2015. The company's bottom line washurt by a 140% rise in income tax expenses to 148.0 million yuan, mainly due tothe write off of deferred income tax assets, and the recognition of deferredincome tax expenses.

* Techint Group subsidiary , one of the largestshareholders of UsinasSiderúrgicas de Minas Gerais SA, will appealBrazil's Administrative Council for Economic Defense's decision that allowedCompanhia SiderúrgicaNacional to elect members of the Usiminas board, Isto e Dinheiro reported.

* The BHP Billiton Group-Vale joint venture posteda net loss of 5.8 billion Brazilian reais in 2015, versus a 2.8 billion reaisnet profit the year previous, due to the November 2015 tailings spill, Valor Econômico reported. The suspendediron mine has spent so far 144.4 million reais of the 9.83 billion reaisprovisioned to cover for potential liabilities and losses. In addition, Samarcoended 2015 with a net debt of 3.44 billion reais.

*Cliffs Natural ResourcesInc. posted first-quarter net income attributable to shareholdersof US$108 million swinging from aloss of US$772.6 million in 2015. Consolidated revenues, meanwhile,fell 32% year over year to US$306 million as cost of goods sold decreased by25% to US$275 million. Total U.S. iron ore production volume was 3.0 millionlong tons, down from 5.4 million long tons recorded a year ago.

*Potash Corp. of SaskatchewanInc. cut its full-year earnings forecast to between 60 U.S. centsand 80 cents per share from 90 cents to US$1.20 per share previously after itsfirst-quarter net earnings slumped to US$75 million from US$370 million booked ayear ago. In response to weaker demand, it curtailed production and loweredexpectations for 2016 potash sales volumes to a range of 8.3 million tonnes to8.8 million tonnes from earlier sales volumes expectations of between 8.3million tonnes to 9.1 million tonnes.

*Brazilian mining major Vale's CEO Murilo Ferreira said the global iron oremarket is in a "better condition than expected," helped by improvingChinese demand, Reuters reported.

* U.K.Business Secretary Sajid Javid highlighted the difficult situation that thegovernment faces with regard to securing a bidder for Tata Steel's troubledU.K. operations, saying that pension liabilities are repelling buyers, Reuters reported."If this pension fund liability is not taken care of, there is no buyersitting out there to buy this business," Javid added.

SPECIALTY

* Two uranium prospecting licenses inNamibia held by Deep YellowLtd. subsidiary Reptile Uranium Namibia (Pty.) Ltd. were for another two years,allowing Deep Yellow to continue work programs on the Omahola project, as wellas the Tumas/Tubas palaeochannel calcrete project. The Ripnes license, however,was relinquished.

* Critical Elements Corp. granted an exclusive rightand option to acquireup to a 70% interest in the Bourier lithium-copper project in Quebec. "Thisoption agreement with Lomiko will allow the Bourier property to be explored indetail for a Lithium pegmatite discovery," Critical Elements President andCEO Jean-Sebastien Lavallee said.

* Western Australia's Department ofMines and Petroleum plans to auctionequipment from the Ellendale diamond site as part of the agency's clean-up ofthe site.

*Russia's Ministry of Economy continues to insist on the possibility ofprivatizing 18.9% of PJSCALROSA's shares, valued at more than 100 billion Russian rubles, Kommersant reported. This is the maximumpacket size that the government may sell without losing control. The FinanceMinistry, however, refuses to consider the proposal to sell more than 10.9% ofthe diamond company.

INDUSTRY NEWS

*According to an exclusive report by SNL Metals & Mining, gold acquisitionswere up in 2015, while base metals transactions slumped. Overall transactionvalue was down slightly; however, gold and base metals proportions switched placesfrom 2014: Gold deals jumped by half in value and base deals dropped by half.Gold acquisitions accounted for 65% of the total price paid last year, comparedwith 39% in 2014.

The Daily Dose is updated as of 7 a.m. London time, and scans newssources published in Chinese, English, Indonesian, Malay, Portuguese, Russian,Spanish, Thai and Ukrainian. Some external links may require a subscription.