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Nevsun rejects Lundin's hostile takeover bid, kicks off strategic review


Essential IR Insights Newsletter - April 2023


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Nevsun rejects Lundin's hostile takeover bid, kicks off strategic review


Nevsun rejects Lundin's hostile takeover bid, kicks off strategic review

Nevsun Resources Ltd.'s board rejected the hostile takeover offer from Lundin Mining Corp. and kicked off a strategic review to evaluate its options. The company said it is evaluating four proposals from major and midtier companies it received as part of its recent strategic investment process, which include their willingness to acquire up to a 19.9% stake in Nevsun and partner to develop the Timok copper project in Serbia.

Rio Tinto ponders listing Iron Ore Co. of Canada stake

Rio Tinto is pondering a float of its stake in Iron Ore Co. of Canada Inc. on the Toronto Stock Exchange to focus on its flagship iron ore assets in Australia's Pilbara region, Reuters reported, citing banking and industry sources. While the mining giant owns 59% of the company, it is deemed noncore for Rio Tinto's iron ore business, and the company unsuccessfully sought to sell its stake for between US$3.5 billion and US$4 billion in 2012.

ThyssenKrupp swings to fiscal Q3 loss on industrial-solutions unit woes

ThyssenKrupp AG posted a group attributable net loss of €131 million for its fiscal third quarter, compared to a year-ago profit of €120 million. Net sales inched up 2% to €11.12 million, with its European steel segment's net sales totaling €2.50 billion, up from €2.34 billion a year ago. Commenting on the results, Executive Chairman Guido Kerkhoff said, "The bottom line is that we are not satisfied with the current results ... There's no point in sugar-coating it. Notably, the cash flow is unsatisfactory, and that is not a situation which can be sustained long term. We have to improve significantly across all our businesses."


* Aurubis AG's operating earnings before taxes fell 16% year over year to €78 million in its fiscal third quarter, due to a scheduled repair shutdown that cut concentrate processing at its Hamburg Hamburg smelter in Germany. The company's sales, however, rose 8% to €2.98 billion.

* CITIC Metal Group Ltd. provided Ivanhoe Mines Ltd. with an interim loan of US$100 million in accordance with a term loan facility, which is an integral part of a long-term strategic cooperation and investment agreement between the parties. The interim funds have an annual interest rate of 6% and will be repaid from the proceeds of the C$723 million strategic investment by CITIC.

* Sunstone Metals Ltd. signed a letter of intent to divest its Viscaria copper project in Sweden in exchange for a 30% shareholding in Copperstone Resources AB. The transaction is valued at around A$41 million.

* India's environment court granted Vedanta Ltd. conditional access to its Tuticorin copper smelter in Tamil Nadu for administrative purposes, Reuters reported. The court did not allow the company to resume operations at the plant, which was closed in May amid violent protests over environmental concerns.

* Vedanta Resources PLC's Zambian unit suspended work at its Konkola copper mine after a miner was killed in an underground accident at one of the shafts, Reuters reported. An investigation is underway.

* Trevali Mining Corp. said a contract worker was fatally injured in an accident at the company's Perkoa zinc mine in Burkina Faso. The underground operations were suspended following the accident, and an investigation is underway.

* New Century Resources Ltd. kicked off hydraulic mining operations at the Century zinc mine in Queensland, Australia.


* Franco-Nevada Corp. is leaning away from gold, its main source of revenue, in terms of acquisition targets in the mining sector. "There are some good opportunities that we're looking at that are on the mining side but are nongold," said President and COO Paul Brink said during a second-quarter earnings call.

* Miners trading at steep discounts might consider going private, Royal Gold Inc. President and CEO Tony Jensen said in opening remarks during a fiscal year-end conference call. "Operators have limited access to equity markets, and few wish to issue equity today because of large market value discounts," Jensen said. "We would not be surprised to see precious metals miners going private in this market, something I certainly haven't seen before in this sector."

* Randgold Resources Ltd.'s second-quarter profit attributable to shareholders dropped to US$52 million from US$84 million a year ago. Gold sales slipped to US$411.5 million, from US$422.1 million a year ago, due to lower sales volumes, partially offset by higher sales prices.

* Randgold expects to resume operations at the Tongon gold mine in Cote d'Ivoire by mid-August, the Financial Times reported, citing CEO Mark Bristow. The company was forced to halt Tongon earlier in July due to a workers' strike at the site. Randgold recently said it was engaging with the government to resolve the situation. The company lowered Tongon's 2018 production forecast to 250,000 ounces from 290,000 ounces of gold projected earlier. Additionally, Bristow told Reuters that the Democratic Republic of the Congo has not applied the new mining code to the miner yet as the two sides are still negotiating.

* Hecla Mining Co. swung to a net profit of US$11.9 million in the second quarter from a year-ago loss of US$24.2 million as sales climbed to US$147.3 million from US$134.3 million. The company recorded a gain on base metal derivative contracts of US$16.8 million in the quarter, compared to a year-ago gain of US$2.5 million.

* Pretium Resources Inc. swung to a second-quarter net profit of US$31.1 million from a year-ago net loss of US$2.5 million. Revenue in the period totaled US$146.5 million.

* SSR Mining Inc.'s income from mine operations declined to US$14.7 million in the second quarter from US$21.4 million a year earlier. Revenue in the period fell to US$60.8 million from US$72.5 million.

* A group of investors led by private equity firm EMR Capital Group agreed to sell a 95% stake in the Martabe gold mine in Indonesia in a deal valuing the operation at US$1.21 billion, including assumed debt, The Australian Financial Review reported. Deal Street Asia reported that Indonesia's PT Danusa Tambang Nusantara is buying the mine.

* Newcrest Mining Ltd. expects to record a noncash, posttax impairment of US$260 million to US$270 million for its fiscal 2018 due to a reduction in the carrying values of the Telfer and Namosi mines. Meanwhile, the company's free cash flow for the year ended June 30 is expected at about US$600 million.

* Torex Gold Resources Inc. produced 78,796 gold ounces in dore and 1,300 ounces in carbon fines in the second quarter. Gold sold for the quarter totaled 77,646 ounces for total proceeds of US$101.1 million

* Doray Minerals Ltd. said it is conducting a standard re-entry at the Deflector gold-copper mine in Western Australia to ensure there are no further hazards at the site before restarting operations. Operations at the mine were temporarily halted due to a fire involving an underground loader.


* Lawyers pursuing a class action lawsuits against BHP Billiton Group in Australia over the Samarco dam disaster in Brazil said their arguments have been "vindicated" by the miner's settlement of a class action in the U.S., adding that losses suffered by members of the Australian class action will likely be larger than those of the U.S. investors, The Australian Financial Review reported.

* National Mineral Development Corp. Ltd. said its net profit in the first quarter of its fiscal 2019 reached 9.75 billion Indian rupees, up 1% year over year. Iron ore production in the quarter reached 6.98 million tonnes, while sales totaled 6.78 million tonnes.

* Evraz PLC's first-half attributable net profit soared to US$1.11 billion from US$53 million a year ago. Consolidated revenue for the period grew 24% to US$6.34 billion due to higher prices for semifinished and construction steel products. The company declared an interim dividend of 40 U.S. cents per share, up from 30 cents per share a year earlier.

* Alcoa Corp. has signed a group annuity contract to transfer about US$290 million in assets and related obligations of defined benefit pension plans for certain U.S. retirees and beneficiaries to Athene Annuity & Life Co., a subsidiary of Athene Holding Ltd.

* Alcoa said that production at its Western Australian operations was not affected by a recent industrial action, which is expected to last until Aug. 17, Mining Weekly reported.

* Meanwhile, Thyssenkrupp CEO Guido Kerkhoff said he has the supervisory board's backing to continue the German group's current strategic path for now, "with all businesses under one roof", Reuters wrote.

* GrowMax Resources Corp. shareholders Kulwant Malhi and BullRun Capital Inc. said the company refused to recognize their requisition of a shareholders' meeting for the removal and replacement of the company's board. The shareholders claim that the shareholder interests have been severely undermined by the incumbent board, through their decisions to award excessive salaries over the past several years, failure to advance any existing projects, and inability to seek out new growth opportunities.

* India's Serious Fraud Investigation Office, or SFIO, said that businessman Neeraj Singal was arrested for allegedly siphoning off funds from Bhushan Steel Ltd., the Financial Times reported. SFIO said that Singal and fellow "promoters", or controlling shareholders, had "used a multitude of complex, fraudulent manoeuvres to divert/siphon-off funds amounting to [hundreds of millions of dollars] raised ... from public sector banks."

* ArcelorMittal restarted a 1.10 million tonne-per-annum blast furnace at its ArcelorMittal Zenica doo long steel mill in Bosnia and Herzegovina, following a comprehensive rebuild, Metal Bulletin reported, citing equipment provider Danieli Corus.

* Brazilian steel producer Cia. Siderúrgica Nacional could announce the sale of its European steel assets by October, Metal Bulletin wrote.

* China Coal Energy Co. Ltd.'s 800 million Chinese yuan debt offering will be listed on the Shanghai Stock Exchange on Aug. 10. It will use the proceeds to repay bank loans.

* Ukraine-focused iron ore pellets-maker Ferrexpo PLC increased its 2017 pre-export finance credit facility to US$400 million from US$195 million and extended the tenor to four years from three.


* PJSC Alrosa raised about US$1.5 million from the sale of polished diamonds in a U.S. tender. The company sold 111 stones of standard color weighing a total of 308.97 carats in its first tender after the reopening of its New York office. Meanwhile, Vedomosti reported that Jewelry House Mouawad Group confirmed that it purchased the 51.38-carat round stone Dynasty from Alrosa. The whole Dynasty collection was sold for US$10 million.

* Altura Mining Ltd. is suspending efforts regarding a control deal confirmed in March and will focus on ramping up production at the Pilgangoora lithium mine in Western Australia to full capacity over the coming months.


* Andrey Belousov, top economic adviser to Russian President Vladimir Putin, proposed in letter that the government should increase taxes on mining companies, including PJSC Norilsk Nickel Co. and Alrosa, as additional budget revenues are needed to help pay for Putin's commitment to boost spending after his re-election this spring, Bloomberg News reported. The tax proposal could raise as much as 500 billion Russian rubles per annum.

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