TOP NEWS
Sibanye Gold makes £285M all-scrip bid for Lonmin
South Africa-based Sibanye Gold Ltd. agreed on terms of an all-share offer to wholly acquire Lonmin Plc in a deal valuing the latter at about £285 million. Each Lonmin shareholder will receive 0.967 of a new Sibanye share. The offer values each Lonmin share at 86.3 British pence and represents a premium of about 35% to the closing price of 63.8 pence Dec. 13. Investec said the move was "doubtless welcome news to long suffering Lonmin shareholders averting the need to dig into their pockets once again to refinance the company." The bank said it remained to be seen if there is scope to turn around the Marikana underground mines to be profitable.
Liberty House may make play for Rio Tinto's Dunkerque aluminum smelter
Liberty House is considering a bid for Rio Tinto's Dunkerque smelter as the company looks to off-load its aluminum assets in France, Reuters reported, citing "three sources with direct knowledge of the matter." The UK-based GFG Alliance, which comprises Gupta's Liberty House Group and SIMEC, was previously reported to be looking to expand its aluminum business.
Larger players account for almost a 3rd of global exploration spending
The mining companies with the 20 largest exploration budgets this year allocated a total of US$2.48 billion for exploration during the year, accounting for 31% of the US$7.95 billion global exploration budget, according to SNL Metals and Mining Research.
DIVERSIFIED
* UBS lifted its target price for BHP Billiton Group stock to A$31.50 per share, increasing from A$30 per share, while maintaining a buy rating on the stock, The Sydney Morning Herald reported. "We believe another wave of cash returns to shareholders is likely in the February 2018 reporting period. The continuation of this theme is likely to continue to attract the marginal global investor, who we believe is underweight mining, back to the sector," the investment bank said.
BASE METALS
* The governments of Argentina and Chile signed an agreement that would facilitate the removal of 40 million tonnes of mineral waste dumped by Antofagasta Plc's Los Pelambres copper project on the Cerro Amarillo tailings deposit, on what is today part of Glencore Plc's El Pachon copper project in Argentina. The deal follows an Argentine federal judge ruling ordering Los Pelambres to begin relocating the waste to a dump on Chilean soil by Dec. 15, daily El Cronista reported.
* Finders Resources Ltd. said 37.58% of its shareholders informed the company that they will reject Eastern Field Development Ltd.'s takeover offer of 23 Australian cents per share. The company added that Eastern Field had received acceptances equivalent to less than 1% of Finders' shares as of Dec. 11.
* Codelco is set to end the year with a gross debt of US$13.9 billion, below the US$14.1 billion reported in 2016. It is the first time this figure will decline since 2008, Chairman Oscar Landerretche said in a master class given to MBA students, daily Pulso reported.
* Peruvian environmental watchdog OEFA ordered Southern Peru Copper Corp. to suspend loading and transporting copper concentrate on trucks to the port terminal of Ilo in the Moquegua region while it investigates claims that it is affecting the health of nearby residents, daily La República reported.
* Golden Rim Resources Ltd. kicked off a scoping study at its 73%-owned Paguanta zinc-silver-lead project in Chile.
* Evrim Resources Corp. signed an agreement with a subsidiary of Antofagasta Plc allowing the latter to acquire a 70% stake in the former's Axe copper-gold property in British Columbia by completing payment and spending milestones over 10 years.
* Hindustan Copper Ltd. restarted its Kendadih copper mine, part of the Indian Copper Complex in India's Jharkhand state, after securing all statutory clearances. The mine has been shut since February 2000 due to economic reasons.
* PolyMet Mining Corp. filed a revised permit to mine application for its NorthMet copper project in Minnesota, which provides for US$75 million in financial assurance for the first two years of construction as well as US$544 million to cover closure and reclamation costs.
PRECIOUS METALS
* Following the takeover bid for Lonmin, RBC Capital Markets upgraded Lonmin shares to sector perform from underperform with a target price of £1 per share from 50 British pence each. The analysts said they had expected Sibanye-Stillwater to eventually make a bid for Lonmin given that this was, in their view, its fourth and final step in the platinum group metals strategy, which started with the acquisition of the Rustenburg operations from Anglo American Platinum Ltd. in 2015.
* A feasibility study on Alamos Gold Inc.'s Lynn Lake gold project in Manitoba outlined total gold production of 1.5 million ounces over a 10.4-year mine life at all-in sustaining costs of US$745/oz sold. Preproduction CapEx was pegged at US$338 million with payback in 4.6 years. The project will have an after-tax net present value of US$123.4 million, at a 5% discount rate, and an internal rate of return of 12.5%.
* Hunan Gold Corp. Ltd.'s parent, Hunan Gold Group LLC, secured authorities' approval to issue convertible bonds of no more than 1.2 billion Chinese yuan within the next 12 months.
* Maritime Resources Corp. secured an option to earn a 100% interest in the Strugglers Pond gold property in the Whisker Valley land package in Newfoundland and Labrador.
* Encounter Resources Ltd. secured over 4,200 square kilometers of new gold tenements in the Tanami region of Western Australia. The tenements are being assessed under the project generation alliance with Newcrest Mining Ltd. and will enter into a 50/50 joint venture if approved.
* Teranga Gold Corp. and private company Sodim Ltd. agreed to create a joint venture for the exploration and development of the Afema land package in Ivory Coast, which covers more than 1,400 square kilometers and includes a historical gold resource.
* Canadian Mining Corp. canceled the previously announced purchase of the Ghana gold project from Crust Resources Corp. without giving further details.
* Axe Exploration Inc. is seeking to evaluate new opportunities and eventually redirect its business to cryptocurrency and blockchain as part of its ongoing efforts to increase shareholder value.
BULK COMMODITIES
* National Australia Bank Ltd., or NAB, stepped up its fight to tackle climate change, vowing to stop funding new thermal coal projects and increase lending to renewable energy projects. "While we will continue to support our existing customers across the mining and energy sectors, including those with existing coal assets, NAB will no longer finance new thermal coal mining projects," the bank said.
* ASX-listed Kore Potash Ltd. intends to seek a secondary listing on the Johannesburg Stock Exchange in addition to plans to list on London Stock Exchange's AIM. Both listings are likely to be completed in early 2018.
* The Chinese government approved the construction of an open pit coal mine in Inner Mongolia owned by state utility China Guodian Corp., Reuters reported. The mine will cost about 4.2 billion Chinese yuan and will have a capacity of 15 million tonnes.
* Chinese primary aluminum production in November dropped 16.8% on a yearly basis to 2.35 million tonnes as the country's winter production cuts on smelters started in mid-November, Reuters reported, citing data from China's National Bureau of Statistics.
* Ezz Steel Co.'s net loss in the first nine months of the year swelled to 1.39 billion Egyptian pounds, or 2.55 pounds per share, from the year-ago loss of 564 million pounds, or 1.04 pounds apiece. Net sales in the period, however, surged 97% year over year to 29.35 billion pounds. The company said it was unable to meet its working capital requirements due to adverse conditions in the Egyptian financial environment, an extremely high level of interest rates and a shortage of liquidity in the banking system.
* Norsk Hydro ASA decided to upgrade and start the second production line at the Husnes smelter in Norway, which will double the production of primary aluminum at the operations to about 190,000 tonnes of aluminum per year.
* Ternium SA unit Ternium Mexico SA de CV confirmed a temporary "technical halt" of iron ore production at its Aquila mine in Mexico's Michoacán state, which has been affected by a political protest blocking access for vehicles going to and from nearby federal highway Mexico 200. The miner's decision affects 650 union workers and about 500 contractor workers, daily Cambio de Michoacan reported.
* Fertoz Ltd. signed a memorandum of understanding to advance the use of its organic rock phosphate blends into Providence Grain Group Inc.'s grain and inputs business. The companies are working on turning the MOU into a definitive distribution and sales agreement centered on the prairie provinces of Canada.
* U.S. thermal coal production and consumption are projected to remain relatively flat in the year ahead, while metallurgical coal will continue to experience price volatility, according to Moody's 2018 outlook. The rating agency estimates thermal coal production will settle at 788 million tons in 2018, a trivial decrease from this year's 790 million tons but a plunge of 27.3% from 1.084 billion tons in 2010.
* Acacia Coal Ltd. decided to unwind its option to acquire 74% of the Riversdale anthracite colliery in South Africa, citing uncertainty for public companies to develop projects in the country.
* As it continues to consider whether to appeal its recent legal loss to Clive Palmer, Citic Ltd. will kick off a campaign aimed at promoting the economic benefits of its A$12 billion Sino-Iron magnetite project in Western Australia, The Australian wrote. The campaign will feature economic modeling showing the mine will spend an additional A$51 billion on goods and services procurement over the next 40 years as well as A$8.7 billion on wages for workers.
SPECIALTY
* The environmental court of Antofagasta in Chile ordered Sociedad Quimica y Minera de Chile SA to temporarily and partially close the water extraction wells in the Salar de Llamara. The company expects a negative impact targeted production capacity of 14,000 tonnes per year of iodine that is under construction.
* Energy Metals Ltd. estimated a JORC 2012-compliant maiden resource at the Malawiri deposit, part of its Ngalia Regional property in Australia's Northern Territory.
* Black Rock Mining Ltd. tapped CPC Project Design to conduct a definitive feasibility study for its Mahenge graphite project in Tanzania. The engineering study will commence in early January 2018.
* Volt Resources Ltd. will proceed with the issue of US$40 million in structured debt funding for developing the first stage of the Bunyu graphite project in Tanzania.
* Westwater Resources Inc. agreed to acquire Alabama Graphite Corp. in an all-stock deal. The transaction will see Alabama Graphite shareholders receive 0.08 of a Westwater share for each share held. The management and board of both companies unanimously support the proposed merger.
INDUSTRY NEWS
* Former Anglo American Plc executives Sebastian Kreft and Frank Jackel launched Metalshub, a digital marketplace for platform-based trading of metals and ferroalloys, Metal Bulletin reported. The platform is initially handling chrome, manganese, molybdenum, nickel, niobium and vanadium.
* Saudi Arabia will form an export bank with US$8 billion in capital to back foreign sales by its industrial and mining projects, Reuters reported, citing Energy, Industry and Mineral Resources Minister Khalid al-Falih.
The Daily Dose is updated as of 7 a.m. ET and scans news sources published in Chinese, English, Indonesian, Malay, Portuguese, Russian, Spanish, Thai and Ukrainian. Some external links may require a subscription.
