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In This List

NLMK's Q3'19 profit plunges 47% YOY; Teck plans to slash C$500M in costs

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


NLMK's Q3'19 profit plunges 47% YOY; Teck plans to slash C$500M in costs

TOP NEWS

Weakening demand hits top Russian steelmaker NLMK's Q3'19 profit

Furnace renovations hurt Russian steelmaker PJSC Novolipetsk Steel's profit for the third quarter as demand and prices weakened amid a global economic slowdown. Profit for the period plunged 47% year over year to US$343 million as revenue fell 18% to US$2.58 billion while cost of sales declined to US$1.75 billion from US$1.93 billion. EBITDA was down 36% year over year to US$654 million.

Teck ratchets up cuts, targeting C$500M in costs

Facing uncertainty in global markets and falling commodities prices in some sectors such as coking coal, Teck Resources Ltd. outlined plans to slash about C$500 million from previously planned spending in 2019 and 2020 without reducing production volumes. On its third-quarter earnings call, Teck CFO Ronald Millos said about C$170 million in cuts would come this year and C$330 million in 2020, with plans to trim about 500 full-time jobs through attrition and freezing some job hires and contract renewals. About 30% of the C$500 million savings target would come from deferred capital projects, Millos said. The planned cuts come as lower commodity prices put pressure on miners to defend margins.

Agnico Eagle's record Q3 gold production meets miner's expectations

Agnico Eagle Mines Ltd.'s record quarterly gold production during the third quarter of nearly 477,000 ounces falls in line with where the company expected to be, CEO Sean Boyd said in an earnings call. As a result of more output and decreased capital spending, the company also expected to generate free cash flow, Boyd said.

DIVERSIFIED

* Newcrest Mining Ltd. raised its fiscal 2020 gold production guidance to between 2.38 million ounces and 2.54 Moz, from 2.35 Moz to 2.50 Moz, following the acquisition of the Red Chris mine in British Columbia. Consequently, the company also increased its copper production guidance for the year to between 130,000 and 145,000 tonnes, from between 110,000 and 120,000 tonnes.

* KAZ Minerals PLC achieved record quarterly copper production of 82,900 tonnes during the third quarter, up from 77,200 tonnes in the same period of 2018, driven by strong performances at its Aktogay and Bozshakol mines in Kazakhstan. Gold production for the quarter totaled 58,500 ounces, rising from 45,200 ounces year over year. Zinc output dropped to 10,500 tonnes from 13,400 tonnes, and silver increased to 944,000 ounces from 941,000 ounces.

* Korab Resources Ltd. and its subsidiaries Australian Copper Pty Ltd and Australian Copper Holdings Pty Ltd have extended the option for Great Fingall Mining Co. NL to acquire the Mount Elephant copper-gold property in Western Australia for a further eight months to June 21, 2020, for a fee of A$10,000. The option was previously extended for six months to Oct. 21.

BASE METALS

* Boliden AB posted a year-over-year jump in third-quarter net profit to 1.41 billion Swedish kronor, or 5.14 kronor per share, from 1.29 billion kronor, or 4.69 kronor per share, due primarily to higher metal prices, improved zinc treatment charges and a stronger U.S. dollar. Operating profit for the period rose to 1.87 billion kronor, from 1.77 billion kronor in 2018, while revenue fell to 11.17 billion kronor from 12.51 billion kronor.

* PT Vale Indonesia Tbk. booked a profit of US$26.3 million in the third quarter, an improvement from the loss of US$6.0 million in the previous quarter. EBITDA in the third quarter totaled US$70.3 million, higher than the US$28.8 million posted in the second quarter. The company produced a total of 19,820 tons of nickel, higher than the 17,631 tons produced a quarter ago.

* Trafigura Group Pte. Ltd. raised its offer to Nyrstar NV shareholders to €22.5 million from €22 million for their remaining 2% stake, Fastmarkets MB reported.

* Pala Investments Ltd.'s acquisition of Cobalt 27 Capital Corp. is expected to be completed during the morning of Oct. 25. The deal involves the creation of a new company, Nickel 28 Capital Corp., which has been renamed as Conic Metals Corp.

* Mindanews reported that Felizardo Gacad Jr., the newly installed chief of the Philippines' Mines and Geosciences Bureau-Region 12, said that the US$5.9 billion Tampakan copper and gold project in South Cotabato is not yet due for commercial production, a clarification made after the Philippine News Agency reported earlier that Gacad said that the Office of the President will lift the order suspending the Environmental Compliance Certificate given to operator Sagittarius Mines Inc. Reuters, meanwhile, reported that the Department of Environment and Natural Resources has recommended lifting the three-year suspension of the environmental permit for Tampakan.

* MMG Ltd. said normal operations resumed at its Las Bambas copper mine in Peru, after the recent removal of road blockades that had threatened production at the site.

PRECIOUS METALS

* Polymetal International PLC is on track to beat its full-year production guidance of 1.55 million gold equivalent ounces by up to 50,000 ounces thanks to the strong performance of its Kyzyl mine in Kazakhstan. The company's third-quarter output grew 7% year over year to 476,000 ounces; Kyzyl was the biggest contributor at 94,000 ounces. That brought the total for the first nine months of 2019 to 1.23 million ounces, up 16% from 1.07 million ounces.

* Yamana Gold Inc.'s net attributable earnings attributable to equity holders in the third quarter amounted to US$201.3 million or 21 U.S. cents per share basic and diluted, a reversal of the US$81.3 million or 9 U.S. cents per share net loss in the same period of the previous year. Gold production totaled 209,923 ounces, lower than the previous year's 268,843 ounces. Silver production, meanwhile, totaled 2.48 million ounces, down from 2.55 million ounces a year ago.

* Silver Lake Resources Ltd.'s board has approved the development of the Santa Underground mine at the Mount Belches mining center in Western Australia.

* Maple Gold Mines Ltd. estimated an indicated mineral resource of 422,000 ounces of gold within 8.6 million tonnes grading 1.52 g/t gold for the Douay gold project in Quebec. The estimated inferred mineral resource, meanwhile, totaled 2.4 million ounces of gold within 71.2 million tonnes grading 1.03 g/t gold.

* Jubilee Metals Group PLC entered an agreement to acquire rights to all earnings from platinum group metals recovered from the Hernic Tailings project in South Africa. Jubilee said it will use its own cash to settle the US$5.1 million payment for the PGM earnings rights.

* G2 Goldfields Inc. has completed its acquisition of all of the issued and outstanding shares of Bartica Investments Ltd.

* Vladislav Sviblov, majority shareholder of Fortiana Holdings Limited, acquired a 4.6% stake in gold mining company Petropavlovsk PLC, Kommersant reported. He considers the asset undervalued and the gold market attractive.

* TMAC Resources Inc. said that construction has started on the Madrid North underground portal. The portal and underground development is targeting the Naartok West zone, enabling access to first production stopes in late 2020. The Madrid North development is expected to provide both near-term operational flexibility and enable medium-term potential growth alternatives at the Hope Bay gold project in Canada.

BULK COMMODITIES

* POSCO's third-quarter net profit attributable to owners of the parent more than halved to 431 billion won from 1.02 trillion won in the same quarter of 2018 as steel segment earnings slumped to 395 billion won from 957 billion won. Revenue declined to 15.988 trillion won from 16.411 trillion won year over year.

* Cia. Siderúrgica Nacional swung to a net loss of 870.7 million reais in the third quarter, including a noncash expense of 863 million reais, compared to a year-ago net profit of 752.2 million reais, mainly due to variation in the exchange rate of the Brazilian real and an update to its shares at fair value.

* Reliance Steel & Aluminum Co. reported a 9.7% year-over-year rise in third-quarter net income to US$162.7 million, while net sales dropped 9.7% to US$2.69 billion. Gross profit margin grew to 30.3%, from 28% a year ago. EPS increased to US$2.40, from US$2.03 a year ago, while costs and expenses fell to US$2.44 billion from US$2.76 billion on a yearly basis. The company reported a 1.8% drop in sales volumes to 1.48 million tons, with the average price falling 8.4% to US$1,807 per ton.

* Tigers Realm Coal Ltd. secured US$15 million in short-term funding from two major shareholders, BV Mining Holding Ltd. and Pine Ridge Holdings Pty. Ltd. Proceeds of the loan will be used to prepay amounts owed to Sberbank under a working capital loan agreement and to provide additional working capital until the company can secure longer-term financing agreements.

* Total U.S. coal production for the week ended Oct. 19 tightened 11.5% year over year to 13.0 million tons from 14.7 million tons, according to data from the U.S. Energy Information Administration. For the 52 weeks ended Oct. 19, production totaled 723.0 million tons, representing a year-over-year decrease of 4.2%, while year-to-date coal output declined 5.2% year over year to 573.0 million tons.

* Magnetite Mines Ltd. entered into an exclusive agreement with NextOre Pty. Ltd. for exclusive use of the latter’s magnetic resonance technology for preconcentration of magnetite and iron ore projects.

SPECIALTY

* Albemarle Corp. posted a preliminary attributable net income of US$155 million, or US$1.46 per share, in the third quarter, higher than the profit of US$129.7 million, or US$1.20 per share, reported in the same quarter of the previous year. The company lowered its full-year 2019 guidance for adjusted EBITDA to between US$1.02 billion and US$1.06 billion, from the previous forecast of US$1.07 billion to US$1.14 billion. Guidance for net sales was also adjusted to between US$3.6 billion and US$3.7 billion, from between US$3.65 billion and US$3.85 billion.

* SRG Mining Inc. signed a binding three-year agreement to supply 27,000 tonnes of graphite to be produced from the Lola graphite project in Guinea. The company said the deal represents 20% of the project's expected output, and it is working to sign more off-takes covering 40% to 60% of the anticipated production.

* Infinity Lithium Corp. Ltd. is leading a consortium trying to secure up to €7 million in funds from the European Union for the San Jose lithium project in Spain.

* Lepidico Ltd. received patent protection in the U.S. for its proprietary lithium chemicals recovery method, known as L-Max, which extracts lithium and certain byproducts from mica minerals to produce lithium carbonate.

* TNG Ltd. said that it has been granted a European patent for its proprietary Tivan hydrometallurgical process for the extraction and recovery of high-purity vanadium.

INDUSTRY NEWS

* Central to mining executives' message at the Future of Mining Americas conference in Denver was the notion that technology and innovation, if handled properly, could serve as a catalyst for improvements in the industry, including safety. Bertrand Odinet, chief information officer and chief innovation officer of Freeport-McMoRan Inc., told S&P Global Market Intelligence that technology has helped the company to better understand its systems and make more targeted investments to optimize assets. It subsequently has received a better return on capital for those investments.

* Ore mining companies operating in Indonesia will need to optimize their use of land given to them under planned new rules, according to energy and mineral resources ministry director Yunus Saefulhak, Reuters reported. The report cited that miners of Indonesia's resources such as nickel, copper and bauxite, often use only a small portion of their concession and sit on massive unexplored area. The government plans to create parameters to measure exploration activities.

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