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Fortescue OKs Queens Valley development; Barrick aims to fully acquire Acacia

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Fortescue OKs Queens Valley development; Barrick aims to fully acquire Acacia

TOP NEWS

Fortescue greenlights US$287M development of Solomon Hub's Queens Valley

Fortescue Metals Group Ltd.'s shares were down 8.2% in May 22 afternoon trading on the ASX as the company approved the US$287 million development of the Queens Valley mining area at its Solomon Hub iron ore operations in Western Australia's Pilbara region. Developing the Queens Valley mining area, which is estimated to have a life of 10 to 15 years, will allow the company to maintain production of the low-alumina Kings Fines product.

Barrick Gold offers to acquire remaining Acacia Mining shares

Barrick Gold Corp. offered to buy all the shares it does not already own in Acacia Mining PLC through a share-for-share exchange of 0.153 of a Barrick share for each Acacia share. The deal implies a US$787 million value for Acacia and total consideration of US$285 million for minority shareholders. Barrick owns a 63.95% stake in Acacia, according to S&P Global Market Intelligence data. Barrick said it made the offer after the Tanzanian government said it was not willing to settle its disputes directly with Acacia.

Stelco eyes more than US$500M in deals in North America

Stelco Holdings Inc. is eyeing deals in North America worth more than US$500 million after the U.S. lifted steel and aluminum tariffs on Canada and Mexico, Bloomberg News reported, citing Executive Chairman Alan Kestenbaum. The deals could include scrap-centric mini-mills that are benefiting Nucor Corp. and Steel Dynamics Inc., the report said. Galvanized steel, cold-rolled steel and slab steel are also areas of interest, Kestenbaum said.

DIVERSIFIED

* BHP Group expects the market for thermal coal to decline over time amid a rise in demand for renewables, CFO Peter Beaven said in a presentation. Beaven also said an abundant supply of lithium and substitution of cobalt would reduce BHP's interest in these battery metals.

BASE METALS

* The Zambian High Court appointed law firm Lungu Simwanza & Co. as a provisional liquidator of Vedanta Resources PLC's Konkola Copper Mines PLC unit shortly after Zambian President Edgar Lungu revealed government plans to take over the unit's copper assets in the country and bring in a new investor, Reuters reported, citing a court document.

* Law firm Baker McKenzie started a new probe into the US$5.3 billion expansion of Rio Tinto's Oyu Tolgoi copper mine in Mongolia, focusing on claims made by a former employee, described as a whistleblower, regarding challenges the company experienced with the expansion, The Australian Financial Review reported.

* The Fuerabamba community in Peru set up a new blockade at MMG Ltd.'s Las Bambas copper mine after talks failed with the company over compensation for road access, Reuters reported. The community had blocked the site for more than two months before reaching a deal with MMG in April.

* URU Metals Ltd. intends to submit a mining right application to extend the validity of the mineral rights at its Zebediela nickel project in South Africa for a further 30 years after the current prospecting right expires in December 2021, which will allow the project to advance toward production.

* Hudbay Minerals Inc. started interviewing potential advisers about divesting a 30% stake in the Rosemont copper project in Arizona, Bloomberg News reported, citing sources, who also said the sale process is expected to begin shortly. Financial bidders such as private equity firms could be interested, although Hudbay may also decide to keep the stake, the report said. In March, Hudbay bought United Copper & Moly LLC's 7.95% project interest for US$75 million.

* Glencore PLC's Glencore AG unit signed a memorandum of understanding to supply cobalt feedstock and finance the recommissioning of First Cobalt Corp.'s namesake refinery in Ontario.

* Nickel Mines Ltd. secured an A$80 million funding package from Decent Investment International Pvt. Ltd., an associate of Nickel Mines operating partner Shanghai Decent Investment (Group) Co. Ltd., to fund its US$121.4 million purchase of an additional stake in the Ranger nickel project in Indonesia.

* Vedanta Ltd. won bids for the Thanewasna and Dubarpeth copper licenses covering 1,584.9 hectares in Maharashtra, India. Exploration will start in due course.

* Kazakhstan's refined copper output rose 8.8% year over year to 149,499 tonnes in the first four months of 2019. Refined zinc production fell 1.5% to 108,184 tonnes, and crude steel output dipped 0.2% to about 1.5 million tonnes, Reuters reported, citing Statistics Committee data.

PRECIOUS METALS

* Acacia Mining advised its shareholders to take no action on the takeover proposal from Barrick Gold while the company is reviewing the offer. The company noted that it continues to be excluded from the discussions between Barrick and the Tanzanian government.

* Precious and base metals miner Stuhini Exploration Ltd. completed its initial public offering of 4,083,000 common shares at 20 Canadian cents per share for total proceeds of C$816,000. The shares were listed on the TSX Venture Exchange on May 21.

* Eastern Goldfields Ltd. received binding commitments for a total of A$30 million for its offer of convertible notes of A$22.4 million and 1-for-1 nonrenounceable entitlement offer of A$7.6 million. The capital raising was a condition for a previously announced recapitalization transaction under an agreement with creditors to settle its debt through a cash repayment or the issue of new equity.

* An updated estimate for Viva Gold Corp.'s Tonopah project in Nevada increased contained gold in the measured and indicated categories by 41% to 262,000 ounces within 8.8 million tonnes grading 0.93 g/t gold at a 0.25 g/t cutoff grade.

* Newcrest Mining Ltd. unit Newcrest Operations Ltd. started drilling at Greatland Gold PLC's Havieron gold-copper project in Western Australia as part of its 75% earn-in agreement. The initial drill program of about 10,000 meters will look to define the extent of the mineralization along strike and at depth, testing to 1,000 meters below surface.

* Northern Shield Resources Inc. unit Seabourne Resources Inc. secured an option to acquire the Root and Cellar gold project in Newfoundland by spending C$2.2 million on exploration, paying C$165,000 and issuing 3 million shares within four years.

* East Africa Metals Inc. received approval for mining licenses over the Mato Bula gold-copper and Da Tambuk gold deposits, part of the Adyabo project in Ethiopia.

* Canarc Resource Corp. received a government land-use permit for exploration on the Hard Cash gold property in Nunavut, Canada, until June 29, 2024.

* Amani Gold Ltd. is planning to acquire a majority interest in 10 gold exploration permits in the Democratic Republic of the Congo collectively known as the Gada project.

BULK COMMODITIES

* The Queensland government in Australia canceled a A$12,190 fine on Adani Enterprises Ltd. affiliate Abbot Point Operations Pty. Ltd. over the unauthorized release of sediment water during Cyclone Debbie in 2017, The Australian reported. Meanwhile, Queensland Premier Annastacia Palaszczuk has asked Adani to work with the state regulator to come up with a timeline to secure approvals for its Carmichael coal mine, Reuters reported.

* British Steel Corp. Ltd. may go under and about 5,000 jobs are on the line unless the U.K. government agrees to grant a £30 million emergency loan May 21, Reuters reported, citing a source close to the situation. Administrators EY may be appointed as early as May 22 should the company fail to secure the loan. In a separate Reuters report, the company said funding negotiations are still ongoing.

* Norsk Hydro ASA ramped up production at its Albras aluminum joint venture with Nippon Amazon Aluminium Co. Ltd. after being cleared to restore normal output at its Alunorte refinery. Full operations at Albras are expected in the second half.

* Alcoa Corp. and U.K.-based charity Eden Project will invest A$150 million to turn the defunct Anglesea coal mine in Victoria, Australia, into an ecotourism attraction, Reuters reported.

* Tata Steel Ltd. and Tata Motors Ltd. have combined debt of about US$27 billion, or over half of Tata Group's total debt, Bloomberg News wrote. This excludes a US$9 billion debt for Tata Steel BSL Ltd. and Tata Teleservices (Maharashtra) Ltd., which are under restructuring.

* Thyssenkrupp AG's supervisory board unanimously approved CEO Guido Kerkhoff's realignment strategy, including the listing of the company's elevators business.

* Russian aluminum producer United Co. Rusal PLC obtained a license to develop a nepheline mine near its largest refinery, Achinsk, in southern Krasnoyarsk Krai in Siberia.

* Cadence Minerals PLC signed a nonbinding heads of terms with IndoSino Pte. Ltd. to acquire up to 27% of DEV Mineração SA's Amapa iron ore project in Brazil. A binding investment agreement is expected shortly.

SPECIALTY

* Neometals Ltd.'s updated definitive feasibility study for its Barrambie vanadium-titanium-magnetite project in Western Australia outlined a posttax net present value, discounted at 10%, of A$199 million, a 15% internal rate of return and a 5.1-year payback period. The operation requires an initial capital expenditure of A$692 million, including contingency. Sustaining capex was pegged at A$123 million.

* Technology Metals Australia Ltd. executed a nonbinding memorandum of understanding with CNMC Ningxia Orient Group Co. Ltd. for vanadium off-take from the company's Gabanintha project in Western Australia. CNMC will initially purchase 2,000 tonnes of vanadium pentoxide per year on a take-or-pay basis.

* Lithium Australia NL estimated a maiden inferred resource of 185 million tonnes at 0.33% vanadium pentoxide at its Youanmi complex in the midwest region of Western Australia.

* A gauge of 38 Chinese rare earth companies' shares rose 6.7% after President Xi Jinping visited one of the country's major rare earths facilities, bringing the industry into the spotlight and highlighting its strategic importance to the U.S., the South China Morning Post wrote.

INDUSTRY NEWS

* Responding to speculations of the acquisition of BGC Contracting Pty. Ltd., NRW Holdings Ltd. said it is not pursuing, or in advanced talks for, any acquisitions to the value speculated in media reports. The Australian recently reported that NRW is in advanced talks to acquire BGC in a deal of up to A$600 million.

* President Donald Trump's decision to remove tariffs on imports of Canadian and Mexican steel and aluminum marks a major step toward the passage of the U.S.-Mexico-Canada Agreement, but it could embolden Democrats to make more demands on labor rules to pass the trade deal.

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