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Moody's cuts US Steel; China limits commodity data amid corruption probe; Reservoir to buy Freeport project stake for US$135M

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


Moody's cuts US Steel; China limits commodity data amid corruption probe; Reservoir to buy Freeport project stake for US$135M

TOP NEWS

Moody'sdowngrades US Steel

Moody'sdowngraded U.S. SteelCorp.'s corporate family rating to B3 and its probability ofdefault rating to B3-PD, from B1 and B1-PD, respectively. It also cut thesenior unsecured notes rating to Caa1 from B2 and the industrial revenue bondratings to Caa1 from B2 with a negative outlook. Moody's said the downgrade wasdue to "significant deterioration in U.S. Steel's performance and debtprotection metrics," and the rating agency expects the steelmaker toreport losses this year as the "oil and gas industry fundamentals willremain weak and volatile in the near term and weigh on U.S. Steel's operatingperformance."

Doubtsover Chinese commodities data deepen

China's National Bureau of Statistics willnot release first-quarter production data for several commodities as thecountry's corruption watchdog, the Central Commission of Discipline Inspection,is probing the illegal sale of state statistics by government officials,Reuters reported. According to Barclays Capital analyst Miswin Mahesh, "Itwould mean that import data and ship tracking will have to pay a larger role,although it would still not be able to give a good estimate for local demand,given China is now also a net exporter of refined products." The regulatorrecently said hundreds of staff members at the statistics bureau had used datafor personal gain.

ReservoirMinerals Inc. exercised its right of first offer to acquire 's 55%interest in the Timokproject's upper zone, as well as increased its interest to 60.4% in the lowerzone, by paying US$135 million. Freeport will retain the remaining interest inthe Lower Zone.

DIVERSIFIED

* Rising metallurgical coal, copper and zinc prices and a strongperformance in the first quarter have helped Teck Resources Ltd. shares rise nearly threefold in2016, prompting analysts to boost their earnings estimates for the company'ssecond quarter by over 5x on average, Bloomberg News reported.

BASE METALS

* ReservoirMinerals Inc. exercised its right of first offer to acquire 's 55%interest in the Timok project's upper zone, as well as increased itsinterest to 60.4% in the lower zone, by paying US$135 million. Freeport willretain the remaining interest in the Lower Zone.

*Boliden AB posted anet profit in the firstquarter of 656 million Swedish kronor, or 2.4 kronor per share, down from ayear-ago net profit of 896 million kronor, or 3.27 kronor per share. Revenuefor the three months dropped to 8.85 billion kronor, from 10.41 billion kronora year ago, mainly due to lower metal prices, partially offset by higherproduction.

*The governor of Catamarca province in Argentina, Lucía Corpacci, said theAlumbreracopper joint venture, owned by Glencore Plc, Goldcorp Inc. and Yamana Gold Inc., would not be closing for another year.The mine had initially planned to finish operations by the end of 2017.However, since the federal government eliminated export duties for mining andenergy companies, Alumbrera decided to continue operating, local daily El Ancasti reported.

*Antofagasta Plcsubsidiary Antofagasta Minerals SA's Los Pelambres copper mine in Chile submitted anenvironmental impact report for its US$1.1 billion investment plan, which is akey to improving the mine's competitiveness and keeping its current productionstable at 400,000 tonnes of fine copper per year, daily La Tercera reported,citing Antofagasta CEO Iván Arriagada.

*Panoro MineralsLtd.'s preliminary economic assessment of its copper-molybdenumproject in Peru estimatedafter-tax net present value, discounted at 7.5%, of US$225 million, a 15.1%internal rate of return and a payback period of 4.1 years. The designthroughput is estimated at 40,000 tonnes per day with an operational life ofmine of 24 years. Initial project capital costs, including contingencies, areexpected to total US$603 million.

*Amur Minerals Corp.said measured, indicated and inferred resources at its Ikenskoe/Sobolevskynickel-copper deposit, part of the Kun-Manie project in Russia, has increasedto 35.3 million tonnes at 0.51% nickel and 0.13% copper for 180,800 tonnes ofcontained nickel and 47,100 tonnes of contained copper, from a previous 2013ore tonnage of 34.1 million tonnes.

*Tongling Nonferrous Metals GroupCo. Ltd. swung to a net loss of 87.1 million Chinese yuan, or 1fen per share, in the first quarter, from a net profit of 52.3 million yuan, or1 fen per share, posted a year ago. Operating income dropped 10.4% to 18.15billion yuan.

*Copper Mountain MiningCorp. produced about 19.0 million pounds of copper in thefirst quarter from its Copper Mountain mine in British Columbia, up from 18.4million pounds a year ago. Gold and silver production, meanwhile, totaled 7,600ounces and 64,700 ounces, respectively, down from 7,800 ounces and 80,300ounces recorded last year.

PRECIOUS METALS

*Endeavour MiningCorp. produced 131,567 ounces of gold during the firstquarter, compared to 123,744 ounces a year ago. All-in sustaining cost improvedto US$900 per ounce from US$946 per ounce. The company is on-track to meet itsfull-year guidance of 535,000 ounces to 560,000 ounces of gold at all-insustaining costs of US$870 per ounce to US$920 per ounce.

*Centamin Plc's profitafter tax for the first quarter increased to US$40.9 million, from US$28.6 million in thesame prior-year quarter. Revenue was up to US$148.1 million in the period, fromUS$135.5 million a year ago on an increase in production and sales of gold andlower all-in sustaining costs.

*Gold prices have crossed the US$1,300 mark per ounce on speculation that U.S.central bank will not immediately tighten policy, Bloomberg News reported.Bullion for immediate delivery has risen 22% this year up to US$1,303.82 perounce.

* ArgonautGold Inc. reported a year-over-year jump in first-quarter net income toUS$4.3 million from US$1.5 million even though revenue fell by 31% to US$35.3million. Net income rose mainly due to a noncash impairment reversal of US$3.6million. Argonaut's gold equivalent production fell 26% to 32,154 ounces in thethree-month period.

* AlmadexMinerals Ltd. has sold its El Encuentro gold project to for US$250,000 anda 2% net smelter return royalty.

* Operations have been suspended at 's gold project inSouth Africa, following the death of two employees on April 30, Mining Weekly reported.The Department of Mineral Resources will launch a probe May 3.

* Ecuador Goldand Copper Corp. agreed with its Condormining Corp. SA unit toterminate the 2012joint venture agreement between Condormining and Minera Guangshou Ecuador SA overthe Chinapintzagold mineral deposit in Ecuador, without disclosing the reason for thetermination. Condormining will retain 100% ownership of the Chinapintza depositand the companies will release each other from all liabilities, claims orobligations under the 2012 deal.

* Red EagleMining Corp. said the development of the San Ramon gold mine and mill project inColombia is approximately 60% complete, while about 90% of equipment deliveredto the project site, all proceeding on budget and schedule.

* IntrepidMines Ltd. said Ravi Underwood has ceased his employment as thecompany's CFO, effective April 29, after Intrepid made the position as part of its reviewto cut costs.

*Sulliden Mining CapitalInc. secured a two-year option to acquire the past-producing gold mine in Quebecfrom First Quantum Minerals Ltd.The Troilus property consists of 81 mineral claims and one surveyed mininglease that collectively cover about 4,700 hectares.

*Nevada ExplorationInc. added 76 new claims covering 550 hectares to its land positionin Nevada's Kelly Creek basin, through staking. The company's land position now spreads over3,100 hectares within the Kelly Creek basin.

*Atacama Pacific GoldCorp. said it is reviewing development options for its oxide golddeposit with the goal of reducing capital costs.

*Eastern GoldfieldsLtd. signed a binding agreement to acquiremore tenements in Western Australia's Eastern Goldfields region from 's GoldstarResources (WA) Pty. Ltd. unit in exchange for A$125,000 in cash and 2 millionunlisted options.

*Northern Sphere MiningCorp. earned an 80% stake in Trueclaim Exploration Inc.'s gold property inOntario after entering a jointventure deal.

* Red HutMetals Inc. said its common shares are now at the Frankfurt Stock Exchange.The secondary listing will allow the company to increase "tradingliquidity and facilitate investment by European investors."

*Havilah ResourcesLtd. has kickedoff the processing of high-grade ore at the gold mine in SouthAustralia. Ore is being sourced from the stockpile generated from mining theinterim sub-pit, as previously reported, and sufficient material is availablefor treatment for several weeks.

*The strong run in OceanaGoldCorp.'s share price led Deutsche Bank to downgradethe stock to sell based on valuation, Fairfax Media Australia reported.

BULK COMMODITIES

*Moody's downgraded U.S. SteelCorp.'s corporate family rating to B3 and its probability ofdefault rating to B3-PD, from B1 and B1-PD, respectively. It also cut thesenior unsecured notes rating to Caa1 from B2 and the industrial revenue bondratings to Caa1 from B2 with a negative outlook. Moody's said the downgrade wasdue to "significant deterioration in U.S. Steel's performance and debtprotection metrics," and the rating agency expects the steelmaker to reportlosses this year as the "oil and gas industry fundamentals will remainweak and volatile in the near term and weigh on U.S. Steel's operatingperformance."

* Production at Coal India Ltd. dropped3.4% year over year to 40.09 million tonnes in April while shipments decreased2.5% to 42.45 million tonnes as stockpiles rose due to weak demand, BloombergNews reported, citing a regulatory filing.

*Alcoa Inc. reached anagreement with the Bonneville Power Administration, which will help improve thecompetitiveness of its Intalco aluminum smelter in Ferndale, Washington state.With the agreement, the facility will not curtail at the end of the second quarter.

* The Federal Court of Australia gave Arrium Ltd.'s administrators KordaMentha moretime to hold the second creditors' meeting, now with a deadline of February2017, while OZ MineralsLtd. is in advanced talks with administrators for a potentialinvestment in the troubled steelmaker, TheSydney Morning Herald reported. OZ Minerals is looking to build a copperprocessing plant in Whyalla with concentrate to be sourced from the copperproject in South Australia. "We're having discussions with a range ofpotential partners including Arrium," an OZ spokesman said.

* Due to unfavorable market conditions and depressedmolybdenum and tungsten prices, Galway Metals Inc. terminated for its molybdenum-tungsten project in New Mexico. The company will not make theUS$75,000 payments due June 1, 2016 and 2017, or the final payment ofUS$900,000 in 2018. The company plans to preserve its cash balance and willseek opportunities where asset values are depressed.

* AluminiumBahrain BSC reported first-quarter net income of US$11 million, downfrom US$99 million booked a year earlier due to a collapse in aluminum prices.Total sales dropped 24% on a yearly basis to US$549 million.

*Mexican steelmaker DeAcero exports manager Germán Gasca said the dumpingaccusations by rival companies Cap SA and Gerdau SA are unfounded and anticompetitive. Gascacalled CAP and Gerdau's requirement to establish a tariff of least 27.5% forconcrete reinforcing steel rebars "abusive," daily Diario Financiero reported.

*Anglo American Plc'sBrasil Iron Ore Business Unit on April 30 completed the 100th shipment from itsMinas-Rio iron ore complex in Brazil. The shipment of iron ore pellets left thePort of Açu in São João da Barra, Rio de Janeiro state, toward North America, Notícias de Mineração reported.

*According to India's Mines Secretary Balvinder Kumar, has agreedto repurchase 25% ofthe shares out of the 80.93% interest the Indian government owns at a price tobe determined later this month. The buyback is part of the government's driveto raise up to 565 billion Indian rupees to offset the national 2016-17 fiscaldeficit.

*BHP Billiton Group,which manages eight coal mines in Queensland, Australia, may hold an earlydirect vote of workers on a redraft of their enterprise agreement, The Australian Financial Review reported,citing three major coal unions in the Australian state. The unions, in acircular to their members, said management was planning "extreme" and"massive departures" from legacy work agreements.

SPECIALTY

*FMC Corp. recordednet income attributable to shareholders in the first quarter of US$48.3million, or 36 cents per share, reversing the net loss of US$46.8 million, or 35 centsper share, recorded in the year ago period. Guidance for earnings per dilutedshare was raised by 5 cents to between US$2.55 and US$2.85, compared to theadjusted EPS of US$2.47 for full-year 2015.

*Workers at AREVA SA'sCominak uraniummine in Niger initiated a 72-hourstrike May 2, saying they have yet to receive the full payment ofbonuses for meeting financial targets last year, Reuters reported, citing twounions.

* RioTinto's pink diamonds division has unveiledthe largest violet diamond ever recovered from the mine in WesternAustralia. The 2.83-carat polished oval shaped diamond, known as The ArgyleViolet, will be showcased at the 2016 Argyle Pink Diamonds Tender.

* ASX-listed Sayona Mining Ltd. inked a binding term sheet to acquireGlen Eagle ResourcesInc.'s Authier lithium project in Quebec for C$4 million,subject to the completion a 60-day due diligence period.

* AshburtonVentures Inc. signed a definitive agreement with to an option over theThompson Bros. lithium property in Wekusko Lake, Manitoba, while simultaneouslyentering a binding heads of agreement with Manitoba Minerals Pty. Ltd. tofinance all payments and obligations relating to the option over the property.

* GlobexMining Enterprises Inc. acquired three lithium projects in Quebec, in exchangefor undertaking the renewal of certain claims and reserving a 1% net smelterroyalty for the vendor.

* AnsonResources Ltd. signed a nonbinding memorandum of understanding withShanxi Jianbang Group Co.Ltd. toassess using graphite and graphene in the latter's steel products.

* CanadianInternational Minerals Inc. and Noram Ventures Inc. entered into a letter of intent tocollaborate onadvancing the Alberta lithium brine project in west-central Alberta.

*Lanka Graphite Ltd.said a breakthroughtechnique has been developed for graphene production under itsmaterial collaboration agreement with the National Taiwan University of Scienceand Technology. The Liquid Phase Exfoliation technique has potential to lead tomass production of graphene, the company said.

*Athabasca NuclearCorp. entered into a binding letter of intent with toacquire theTorp Lake andPhoenix lithiumclaims in Canada.

*Platypus MineralsLtd. said LepidicoLtd. has granted European Metals Holdings Ltd. an option a license to use theL-Max technology for the latter's Cinovec lithium project in the Czech Republic forA$20,000.

INDUSTRY NEWS

* China's National Bureau of Statistics willnot release first-quarter production data for several commodities as thecountry's corruption watchdog, the Central Commission of Discipline Inspection,is probing the illegal sale of state statistics by government officials,Reuters reported. According to Barclays Capital analyst Miswin Mahesh, "Itwould mean that import data and ship tracking will have to pay a larger role,although it would still not be able to give a good estimate for local demand,given China is now also a net exporter of refined products." The regulatorrecently said hundreds of staff members at the statistics bureau had used datafor personal gain.

*Moody's flagged that more Brazilian companies will face increasing liquidityrisk through next year as surging borrowing costs and the harshest recession indecades affect their ability to service debt, Reuters reported.Despite cost-cutting initiatives, raising funds has emerged as challenge forthe oil and gas, homebuilding, transportation, telecommunications and media,and metals and mining industries, the rating agency added.

The Daily Dose is updated asof 7 a.m. New York time, and scans news sources published in Chinese, English,Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Someexternal links may require a subscription.