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Nevsun agrees to C$1.86B all-cash takeover by Zijin Mining

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


Nevsun agrees to C$1.86B all-cash takeover by Zijin Mining

TOP NEWS

Nevsun agrees to C$1.86B all-cash takeover by Zijin Mining

Zijin Mining Group Co. Ltd. entered into a definitive agreement for an all-cash takeover of Nevsun Resources Ltd. in a C$1.86 billion deal. The C$6.00 per share offer is a 26% premium over the C$4.75 per share hostile takeover bid for Nevsun launched by Lundin Mining Corp. in late July.

Randgold restarts Tongon operations, further cuts FY'18 gold output guidance

Randgold Resources Ltd. has restarted normal operations at its Tongon gold mine in the Ivory Coast after management lifted the lock-out imposed on workers after a protracted illegal strike. The company further slashed the output guidance for the year to 230,000 ounces, which was previously cut to 250,000 ounces due to the strike. Meanwhile, discussions between the management, workers, community leaders and the government for ending the occasional industrial unrest at the mine will resume where they were interrupted by the strike in July.

BHP to acquire Guyana Goldfields' SolGold stake for £27.4M

BHP Billiton Group signs an agreement with Guyana Goldfields Inc. to acquire the latter's 6.1% interest in SolGold PLC, the majority owner and operator of the Cascabel porphyry copper-gold project in Ecuador, for around £27.4 million. BHP CEO Andrew Mackenzie said the investment will provide the company with exposure to a high-quality copper exploration project.

DIVERSIFIED

* AMG Advanced Metallurgical Group NV expects its full year 2018 EBITDA to exceed US$190 million on the back of improving market conditions across its critical materials portfolio. EBITDA in 2017 rose 25% year over year to US$125.5 million.

BASE METALS

* Consolidated Zinc Ltd. approved the development plan for its Plomosas zinc-lead-silver project in northern Mexico and will immediately start mining the high-grade Tres Amigos mineralization. The company also entered agreements with Grupo México SAB de CV to process the Plomosas ore through the latter's concentrator plant at Santa Eulalia and sell the product to their San Luis Potosi smelter.

* Belgravia Capital International Inc. filed a complaint with the Ontario Securities Commission against Tartisan Nickel Corp. CEO Mark Appleby for allegedly diverting funds from the explorer's treasury, failing to disclose a lawsuit filed by Belgravia in mid-June and potentially tipping a third party to allow it to avert losses on the sale of its shares.

* OAO Metalloinvest spinoff Baikal Mining Co. LLC kicked off construction of a mining and metallurgical plant at the Udokan copper project in Russia, Reuters reported. The plant will have the capacity to process up to 12 million tonnes of ore per year after its launch in 2022, producing cathode copper and sulfide concentrate. Udokan is the largest undeveloped copper deposit in Russia, with total reserves of around 26.7 million tonnes.

* Helix Resources Ltd. and Japan Oil, Gas and Metals National Corp. reached a joint venture deal, where JOGMEC will earn 60% interest in the Samuel copper project in Chile by funding exploration of up to US$2.4 million.

* Broken Hill Prospecting Ltd. said Cobalt Blue Holdings Ltd. secured a 70% stake in the Thackaringa cobalt project in New South Wales, Australia, after completing the second stage of the earn-in deal.

PRECIOUS METALS

* DRDGold Ltd. is hedging 50,000 ounces of gold, spread equally over nine months, at between 565,000 and 609,000 South African rand per kilogram cash, which will be settled at the end of each month. In fiscal 2019, the company expects to produce 148,000 to 154,000 ounces of gold at a cash operating cost of about 490,000 rand per kilogram from its Ergo operation in South Africa.

* Following news that Guatemala's Constitutional Court reversed an earlier decision by the country's Supreme Court to restore the mining permit for the Escobal silver-gold-lead mine, Tahoe Resources Inc. Executive Chairman Kevin McArthur told S&P Global Market Intelligence that in a best case scenario, it would take about six months to have a mine permit reinstated at Escobal. He also cast the rejection in a positive light, saying it added procedural certainty to Tahoe's attempt to get Escobal running smoothly.

* Coeur Mining Inc. declared commercial production at its Silvertip silver-zinc-lead mine in British Columbia, effective Sept. 1. The company said the mine is on track to reach an average processing rate of 750 tonnes per day by year-end and 1,000 t/d by early 2019. Due to the improved visibility of Silvertip's production and stronger-than-expected performance of its Rochester mine in Nevada, Coeur raised its full-year output guidance to between 36.1 million and 39.5 million ounces of silver equivalent.

* Goldcorp Inc. said bulk sample extraction at the Borden gold project in Ontario started two months ahead of schedule, with a pre-feasibility study for the Century gold project, also in Ontario, on track for completion in the fourth quarter. Meanwhile, the Coffee gold project in the Yukon Territory completed the adequacy review phase of its permitting process, with production expected to begin in 2021, and the pyrite leach project at Penasquito gold mine in Mexico has completed construction, with commissioning further accelerated to the third quarter, two quarters ahead of schedule.

* Avocet Mining Plc transferred 30% of its Tri-K gold project in Guinea to Managem S.A., taking the latter's stake in the joint venture to 70%, under the deal signed in 2016.

* East Africa Metals Inc. secured draft model agreements from Ethiopia's Ministry of Mines, Petroleum and Natural Gas for its Mato Bula and Da Tambuk gold projects, part of its Adyabo property. The company must fulfill the outlined conditions in order to obtain a mining license for each project.

BULK COMMODITIES

* The Department of Environment and Science in Queensland, Australia, is taking Adani Enterprises Ltd.'s Abbot Point Bulkcoal Pty. Ltd. to court over an unauthorized discharge of sediment water from the Abbot Point coal terminal during Cyclone Debbie in early 2017. The department said that the discharged water was more than eight times above the levels authorized in a temporary emissions license.

* Alumina production of Alcoa Corp. is likely to take a hit as a result of the ongoing strike at the company's three alumina refineries and two bauxite mines in Western Australia, Reuters reported, citing the Australian Workers' Union National Secretary Daniel Walton. "Fully staffed, refineries should produce about 26,000 tonnes of alumina per day. Currently more than half the operational staff responsible for this work are on strike," Walton said.

* Rio Tinto is offering Japanese buyers a premium of US$112 per tonne of aluminum shipments in the fourth quarter, unnamed sources told S&P Global Platts. The offer, which includes London Metal Exchange cash and cost insurance and freight in Japan, is lower by 15% from the US$132/t premium on aluminum shipments in the third quarter. The report added that another producer is offering a premium of US$115/t of aluminum shipments. Japan is Asia's biggest aluminium importer and the premiums it agrees to pay each quarter serves as a benchmark for the region.

* U.S. Steel Corp. agreed to extend labor talks with the United Steelworkers for the negotiation of a new collective bargaining deal, the Star Tribune reported.

* Mongolian Minister of Mining and Heavy Industry Dolgorsuren Sumiyabazar said the country is ready to work with foreign investors on the Tavan Tolgoi deposit, one of the world's largest untapped coking and thermal coal deposits, with a total estimated reserve of 6.4 billion tonnes, Xinhua news agency reported. The Mongolian parliament in June approved the sale of up to 30% of the Tavan Tolgoi coal property through a partial IPO of state-owned Erdenes Tavan Tolgoi LLC.

* Nan Nan Resources Enterprise Ltd. secured regulatory approval to resume production at its Kaiyuan coal mine in China. The company was ordered to suspend operations in April after the site's mining rights and work safety permit expired.

* The U.S. saw a 25.8% growth in coal exports during the second quarter compared to the year-ago period, shipping about 7.8 million more tonnes overseas, according to data compiled by S&P Global Market Intelligence. India was the largest importer, buying 5.1 million tonnes of U.S. coal, a 24.5% year-over-year increase and a 600,000-tonnes decrease from the first quarter.

SPECIALTY

* Black Rock Mining Ltd. secured environmental approval for its Mahenge graphite project in Tanzania. It will submit a mining license request after completion of a definitive feasibility study.

* AfrAsia Bank Ltd. CEO Sanjiv Bhasin says more institutional money is flowing into Africa, with Battery Minerals Ltd. having received indicative terms from some financial backers for its Montepuez graphite project in Mozambique amid financiers' concerns about graphite hopefuls' ability to secure debt funding. Mauritius-based Bhasin, whose bank facilitates deals for institutional debt and equity for African projects, told S&P Global Market Intelligence that the "frequency and quantum" of such money into the continent is increasing, and said he did not detect at the Africa Down Under conference in Perth, Australia, any expressions of concern for miners' ability to raise debt.

* Neo Lithium Corp. is in discussions with potential U.S., European and Asian joint venture partners for a US$490 million deal to fund development of its Tres Quebradas lithium mine in Argentina, Bloomberg News reported, citing CEO Waldo Perez. The company will use the funds to advance the project in its entirety, and does not plan to seek off-take agreements, the executive added.

* Altura Mining Ltd.'s namesake Altura mine at Pilgangoora officially opened on Sept. 5 having become Western Australia's seventh lithium project to start production, but short-to-medium term uncertainty persists as to whether the fall in lithium carbonate prices this year thus far is cyclical or not.

* Australian lithium companies operating in Argentina are facing an unexpected 8% tariff on export revenue, following Argentine President Mauricio Macri's plans to impose export taxes, The Australian reported. Shares in Orocobre Ltd. went into a trading halt before the market opened following the news of the export taxes, while shares of Lake Resources NL and Galaxy Resources Ltd. fell 6% and 3.7%, respectively. Argosy Minerals Ltd. stayed trading but said it was seeking more information.

* Frontier Diamonds Ltd. recovered a 111.45-carat diamond during the processing of material from the Bellsbank kimberlite pipe exploration project and tailings from the Sedibeng mine in South Africa.

* Denison Mines Corp. reached a deal to acquire Cameco Corp.'s 24% stake in the Wheeler River uranium project in Saskatchewan for about C$16 million in shares. The deal will result in Denison holding a 90% interest in the joint venture.

* Dark Horse Resources Ltd. secured a purchase option for the San Jorge lithium brine project in Argentina's Catamarca province for US$4.5 million in staged payments over five years and annual exploration commitments totaling about US$3 million.

* Kibaran Resources Ltd. secured a guarantee from Tanzania's Mining Commission for a 10-year renewal of the Epanko graphite project's mining license, pending the fulfillment of requirements under the country's mining act.

* Lake Resources reached a deal with Lilac Solutions Inc. for the use of the latter's proprietary ion exchange technology, to be used as a rapid and low-cost method to directly extract lithium from brines at the Kachi project in Argentina.

INDUSTRY NEWS

* New Western Australia Chamber of Minerals and Energy CEO Paul Everingham downplayed fears of a skills shortage in the resources sector and saw a potential wage increase of as much as 5% as a welcome development, The West Australian reported.

* South Africa's mining and quarrying industry in the second quarter grew 4.9% quarter on quarter, contributing a positive 0.4 percentage point to the country's GDP, according to data from Statistics South Africa. The improvement was sparked by an increase in production of metal ores such as platinum group metals, copper, and nickel.

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