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In This List

Norilsk secures up to US$800M credit facility; Anglo selling Foxleigh stake; Mechel to sell Elga interest

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020

Report Outlooks of Lithium and Cobalt

Essential Metals & Mining Insights July 2020


Norilsk secures up to US$800M credit facility; Anglo selling Foxleigh stake; Mechel to sell Elga interest

TOP NEWS

Norilsk Nickel secures up to US$800 million credit facility

PJSC MMC NorilskNickel secured a credit facility of up to US$800 million for an eight-yearperiod to finance theconstruction of the Bystrinskoyecopper-gold-iron project in Russia. The facility was arranged by Sberbank CIB inthe form of project financing without recourse to Norilsk Nickel based on financialresults and the economic assessment of the project.

Anglo American selling 70% stake in Foxleigh coal mine

Anglo AmericanPlc said it is sellingits 70% interest in the Foxleighmetallurgical coal mine in Queensland, Australia, to a consortium led by TaurusFund Management. Foxleigh, an open-cut coal operation that contributed 1.9 milliontonnes of salable production to Anglo American in 2015, was prepared for sale asearly as January 2015.

Mechel to sell 49% stake in Elga project

Russian coal and steel group Mechel OAO agreed to sella 49% stake in its flagship Elga coal mine in Russia to state-owned Gazprombank for 34.3billion Russian rubles, in a deal that provides the troubled miner and steelmakerwith much-needed breathing room from creditors as it prepares to refinance its debtpile. According to the company, the deal also gives Gazprombank the right to sellthe holdings back to Mechel in the future.

DIVERSIFIED

* Documents released as part of the recent data leak — the PanamaPapers — show that mining giant BHPBilliton Group allowedtwo of its British Virgin Islands-based subsidiaries to receive large sums of money,which set off a high risk warning at law firm Mossack Fonseca. A BHP spokeswomansaid the company "does not engage in aggressive tax planning," and bothcompanies were under U.K. tax laws on their worldwide income.

BASE METALS

* PJSC MMC NorilskNickel secured a credit facility of up to US$800 million for an eight-yearperiod to finance theconstruction of the Bystrinskoyecopper-gold-iron project in Russia. The facility was arranged by Sberbank CIB inthe form of project financing without recourse to Norilsk Nickel based on financialresults and the economic assessment of the project.

* Separately, Norilsk Nickel said it plans to linkits dividend to its debt and earnings to adapt to market conditions, Bloomberg Newsreported. Future payments will rely on the company's debt-to-earnings ratio.

* First ColombiaGold Corp. struck a deal to fully acquire Singa Energy Solutions, an energy production andconsulting company. Effective immediately, First Colombia will start operating anddoing business under the new trade name, Singa Energy Solutions. 

* The government of Indonesia has yet to decide on how much itwill pay for a 10.64% stake in Freeport-McMoRanInc.'s local unit PT Freeport Indonesia as the government is still reviewingthe US$1.7 billion price offered by the company, Tempo reported,citing Bambang Gatot, director general of minerals and coal for Indonesia's Energyand Mineral Resources Ministry. "We are still discussing the price for thegovernment to make a verdict. We only need to decide on its price," Bambangadded.

PRECIOUS METALS

* Polymetal InternationalPlc entered into a binding agreement with Glencore Plc unit KazzincLtd. for the acquisitionof Orion Minerals LLP, which holds the Komarovskoye gold deposit in the Republic of Kazakhstan.The company will pay US$100 million in cash and Kazzinc will receive a royalty,capped at US$80 million, linked to future production from Komarovskoye.

* Newmarket GoldInc. said Eric Sprott will purchase10 million common shares of the company from Luxor Capital Partners LP and affiliatesat US$2.25 per share for a total of US$22.5 million.

* Just a few days after achieving commercial production at themine, Torex Gold Resources Inc.temporarily suspended operationsat its El Limon-Guajesgold project in Mexico until further notice due to an illegal blockade. The blockadewas initiated by three families demanding payments from the company for allegedenvironmental damages.

* Joseph Mathunjwa, president of South Africa's Association ofMineworkers and Construction Union, or AMCU, warned that the union may bring Sibanye Gold Ltd. operations to a halt on April 6, to protestagainst the company's three-year wage agreement reached with other unions in October2015.

* Saudi ArabianMining Co., or Ma'aden, on April 1 started commercial production at the Ad Duwayhi gold mine. The company expects to rampup gold production to 180,000 ounces annually by the end of this year. Meanwhile,the start of commercial production at the Jabal Sayid copper mine of its affiliate, Ma'aden BarrickCopper Co., has been delayed from first quarter 2016 to "allow for final mechanicaltesting to be completed." Ma'aden Barrick is jointly owned on a 50/50 basisby Ma'aden and Barrick Gold Corp.

* Following its mergerwith Lake Shore Gold Corp.,Tahoe Resources Inc. announcedcombined guidance for 2016 that included total gold production of between 370,000ounces to 430,000 ounces at all-in sustaining costs of US$950 to US$1,000 per ounceof gold, net of byproduct credits. Meanwhile, silver production will come in atbetween 18 million ounces to 21 million ounces at AISC of US$10 to US$11 per ounceof silver produced, net of byproduct credits. 

* Shares of ImpalaPlatinum Holdings Ltd., or Implats, fellas much as 4.4% and were trading lower at 43.90 South African rand per share inJohannesburg on April 4 after black-controlled Royal Bafokeng Holdings reduced itsstake by 5% to 6.3% in the platinum producer, Bloomberg News reported, citing acompany statement.

* Polyus Gold InternationalLtd., controlled by Suleyman Kerimov's son, is preparing to hold a secondaryoffering on the Moscow stock exchange, Kommersantreported. At the same time, the companyis in talks with Asian investors for the sale of part of its treasury package. Atthe end of last year, Polyus Gold delisted from the London Stock Exchange, and themarket is now speculating on why the company once again is looking to expand itsshareholder base.

* Royal Road MineralsLtd. acquired an option to fully acquire the La Redención gold project in Colombia from MesiasOliver Acosta Benavides, Euberto Ernesto Calderon and Jesus Yerobi Santander.

* Inca MineralsLtd. acquiredthe Santa Rita silver-lead-zinc project in central Peru through a five-year miningoption and assignment agreement.

* Torian ResourcesLtd. acquiredthe Bardoc gold project in Kalgoorlie, Western Australia, which is its eighth acquisitionin the past 12 months. The project covers about 38.6 square kilometers and is ownedby Torian and its major shareholder and joint venture partner,

* Millrock ResourcesInc. acquiredfive new tenures by staking in British Columbia's Golden Triangle region. The newtenures cover a total of 5,391 hectares and join Millrock's Todd Creek and Poly gold properties.

* PT Antam (Persero)Tbk signed a memorandum of understanding with PT Freeport Indonesia and PT Smelting for the of an anode slime processingand precious metal refinery.

* An updatedresource estimate for IDM Mining Ltd.'sRed Mountain goldproject in British Columbia found that the property hosts measured and indicatedresources of 1.6 million tonnes grading 8.36 g/t of gold and 26 g/t of silver for441,500 ounces of gold and 1.4 million ounces of silver. Inferred resources, meanwhile,totaled 548,100 tonnes grading 6.10 g/t of gold and 9 g/t of silver for 107,500ounces of gold and 153,700 ounces of silver.

* The Ontario Superior Court of Justice dismissed the application to commence a proposed securitiesclass action against Eastern PlatinumLtd. filed by a current director and two former directors of the company.

* Three employees of PrimeroMining Corp. died in an aircraft crash-landing near Tayoltita airportin Mexico, Mining Weekly reported.    

BULK COMMODITIES

* Anglo AmericanPlc said it is sellingits 70% interest in the Foxleighmetallurgical coal mine in Queensland, Australia, to a consortium led by TaurusFund Management. Foxleigh, an open-cut coal operation that contributed 1.9 milliontonnes of salable production to Anglo American in 2015, was prepared for sale asearly as January 2015.

* Russian coal and steel group Mechel OAO agreed to sella 49% stake in its flagship Elga coal mine in Russia to state-owned Gazprombank for 34.3billion Russian rubles, in a deal that provides the troubled miner and steelmakerwith much-needed breathing room from creditors as it prepares to refinance its debtpile. According to the company, the deal also gives Gazprombank the right to sellthe holdings back to Mechel in the future.

* Fortescue MetalsGroup Ltd. said it will shiftto an owner-operator model at the Christmas Creek iron ore mining operations withinits Chichester Hubproperty in Western Australia, effective from Sept. 30 upon completion of the currentmining services contract with Downer EDI Ltd.

* South Korean steelmaker POSCO said it plans to invest around U$19 million to builda wire rod processing plant in Jeffersonville, Ind., The Korea Herald reported. Accordingto the company, the plant will cover a 34,000-square-meter area and will have anannual production capacity of 25,000 tonnes of wire rod.

* ArcelorMittal'sArcelorMittal USA unit plans to enterinto a new, five-year senior secured asset-based revolving credit facility of upto US$1 billion. The credit facility is expected to close in the second quarter.

* CIBC World Markets analyst Jacob Bout said willcutthe low end of its predicted earnings guidance of 90 U.S. cents to US$1.20 per sharethat the company provided in late January, owing to the continued decline in potashprices, the Financial Post reported. 

* Brazilian environmental regulator Ibama rejected Votorantimunit Sul-Americana de Metais' license application for the Vale do Rio Pardo ironore project in country's Minas Gerais state as the planned tailings dam is not environmentallyviable, Reuters reported.

* Creditors of ArriumLtd. shot downthe US$927 million recapitalization proposal from U.S.-based GSO Capital PartnersLP, leaving the future of thousands of workers and the Whyalla steelworks in SouthAustralia hanging in the balance.

* Fertoz Ltd.secured2,453 hectares of land prospective for direct application phosphate at Mount Lyne,which will form part of the company's Ferniephosphate project in British Columbia.

* Fitch Ratings downgraded JSW Steel Ltd.'s long-term issuer default rating to BB fromBB+. The outlook remains negative.

* Pan African ResourcesPlc completed the acquisitionof the Uitkomst Collieryfrom Oakleaf Investment Holdings and ShandukaResources (Pty) Ltd. for a revised purchase consideration of 176 millionSouth African rand.

* Paringa ResourcesLtd. starteda bankable feasibility study on BuckCreek No. 2 Mine in Kentucky, following a positive scoping study. Ascoping study into the No. 2 mine found that for capital expenditure of US$44 million,the mine would deliver a 1.8 million-tonne-per-annum operation with a mine lifeof 20 years. "Typically, a coal project in the US at this stage would movedirectly into construction; however, we will complete the BFS to identify key areasfor optimization," company CEO David Gay said.

* Mining services group RCR Tomlinson Ltd. decided to exitthe coal market, citing low profitability in the Australian coal industry duringthe last five years, Australian Mining reported. The company also "intendsto discontinue 12 unprofitable businesses highly exposed to this type of miningservices" as part of its business strategy review.

* Russian Energy Minister Alexander Novak noted that the levelof fatal accidents at Russian coal mines has gone down, but the risk remains high,Vedomosti wrote.

SPECIALTY

* MZI ResourcesLtd. Managing Director Trevor Matthews said the company plans to significantlyextend the production capacity of 110,000 tonnes per annum at its flagship mineral sands projectin Western Australia, The West Australianreported.

* Denison MinesCorp. released the results of a preliminary economic assessment on theWheeler River uraniumproject, which peggedbase case pretax net present value of C$513 million at an internal rate of returnof 20.4% and initial CapEx of C$560 million on a 100% ownership basis. Assumingcontract price of US$44 per pound of U3O8, the Gryphon deposit is expected to produce40.7 million pounds of U3O8, over a seven-year mine life, at a cash operating costof US$14.28 per pound of U3O8, while the Phoenix deposit will produce 64.0 millionpounds of U3O8, over a nine-year mine life, at a cash operating cost of US$22.15per pound of U3O8. The Wheeler project is a joint venture between Denison, and

* Gemfields Plcearned revenuesof about US$33.1 million from the auction of predominantly higher quality roughemerald extracted by 75% subsidiary KagemMining Ltd. and higher quality amethyst from 50% subsidiary in Zambia.

* An updated feasibility study on Nemaska Lithium Inc.'s Whabouchi lithium project in Quebec pegged a posttax net present value of C$1.16 billion at adiscount rate of 8%, an internal rate of return of 30.3% and a payback period ofabout 2.4 years at a base-case scenario.

* Bushveld MineralsLtd. signed a memorandum of understanding between its 84%-owned energysubsidiary, Bushveld Energy Ltd., and UniEnergy Technologies, for cooperationin the development of market opportunities for vanadium-redox flow batteries.

* Alligator EnergyLtd. decided to terminateits farm-in and joint venture agreement with Cameco Corp.'s Cameco Australia Pty. Ltd. unit over the uranium projectin Northern Territory, Australia. The company will now focus on its and Tin Camp Creek uranium projects, it said.

INDUSTRY NEWS

* Pressure is mounting on the Canadian government to address a host ofabuses allegedly committed by Canadian mining corporations in Latin America. Questionablebusiness practices in the region by Canadian miners have been alleged for years,with multiple lawsuits now in play. HudBayMinerals Inc. is accused in the shooting death of an aboriginal leaderin Guatemala, while Tahoe ResourcesInc. is under fire in the shooting of two protesters at its silver-gold-lead-zincmine in Guatemala.

The Daily Dose is updated as of 7 a.m. Hong Kong time, and scans newssources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish,Thai and Ukrainian. Some external links may require a subscription.