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First Quantum contemplates US$1.5B option on Northern Dynasty's Pebble project

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Essential Metals & Mining Insights - September 2021


First Quantum contemplates US$1.5B option on Northern Dynasty's Pebble project

TOP NEWS

First Quantum contemplates US$1.5B option on Northern Dynasty's Pebble project

First Quantum Minerals Ltd. entered a framework agreement with Northern Dynasty Minerals Ltd. for a potential option deal between a First Quantum unit and Northern Dynasty over the latter's Pebble copper project in Alaska. The First Quantum unit will pay US$150 million in equal tranches of US$37.5 million for the initial four-year option period. First Quantum will earn a 50% interest in Pebble LP, which owns the Pebble project, after investing an additional US$1.35 billion in the operating company.

Torex suspends El Limon-Guajes worker contracts amid blockade

As a blockade of the El Limon-Guajes gold mine in Mexico drags on, now in its 46th day, Torex Gold Resources Inc. suspended employment contracts with its workforce, effective Dec. 16, after reporting last week that the majority of the workers had voted to return to work. Torex said it will reconsider the contract suspension if the blockade is cleared by the end of Dec. 20, but it did not sound optimistic. The company said Los Mineros had increased its efforts over the weekend, threatening to cut power to the mine and blocking food and water from reaching police at the site.

Vale calls Moatize strike illegal, declines bonus increase

Vale SA said it would not pay bonuses demanded by its striking workers at the company's Moatize coal plant in Mozambique and called the labor action illegal, Reuters reported. The workers are demanding two bonuses, including a 14th salary and a retention bonus, the company said.

DIVERSIFIED

* Mineral Commodities Ltd. opened an office in Tehran as it looks to explore and develop copper, gold, cobalt, nickel, zinc and potash-lithium projects in Iran. The company's wholly owned Iranian subsidiary, Madan Rahjo Kanyab Co., entered into agreements to acquire existing operations and for joint ventures with local partners.

BASE METALS

* The zinc market remained relatively quiet over the past month, typical at this time of the year when market participants are engrossed in following-year contract negotiations on sale volumes, contract treatment charges and premiums. Although spot treatment charges are expected to rise in the second half of 2018, and 2018 contract treatment charges should also reflect the anticipated increase in concentrate supply, Metals & Mining Research Team at S&P Global Market Intelligence expects smelters to benefit from persistently low treatment charges through to the end of this year amid increased competition for concentrates.

* PJSC Norilsk Nickel Co. signed a five-year, US$2.5 billion term loan facility agreement with a consortium of international financial institutions.

* China's refined copper production in November jumped nearly 10% year over year to 786,000 tonnes, the highest rate in at least three years, Mining.com reported, citing data from the National Bureau of Statistics. Meanwhile, zinc output for the month rose 7.5% to 603,000 tonnes.

* Variscan Mines Ltd. secured a binding option to acquire the Rosario copper project in northern Chile's Atacama region.

* MMG Ltd. made its first shipment of approximately 10,500 wet tonnes of zinc concentrate, part of the commissioning of the Dugald River zinc project in Queensland, Australia.

PRECIOUS METALS

* Aura Minerals Inc. and Rio Novo Gold Inc. signed a merger agreement under which Aura will acquire Rio Novo's outstanding share capital by issuing 0.053 of an Aura common share for each Rio Novo share held.

* Aztec Minerals Corp. entered into an option deal to acquire a 75% interest in a package of mineral properties in the Tombstone mining district of Arizona from Baroyeca Gold & Silver Inc. and its U.S. subsidiaries.

* Avocet Mining Plc entered into an agreement to sell all of its assets in Burkina Faso, including the Inata gold mine, together with certain receivables, to the Ghana-based Balaji Group for a total of US$5 million.

* West Wits Mining Ltd.'s JORC 2012-compliant resource estimate at its 66%-owned Witwatersrand Basin project in South Africa increased to 3.3 million ounces from 1.4 million ounces. The resource is contained in 29.6 million tonnes of ore at a grade of 3.4 g/t of gold, at a 2 g/t cutoff.

* Alacer Gold Corp. posted initial reserves for the Çakmaktepe deposit at the Çöpler operations in Turkey as well as a 70% increase in indicated resources at the Çakmaktepe and Bayramdere deposits. The company's interest in the Çöpler property ranges from 50% to 80%.

* Calidus Resources Ltd.'s total indicated and inferred resource at its Warrawoona gold project in Western Australia increased 74% to 10.5 million tonnes at 2.11 g/t of gold for 712,000 ounces.

* Aphrodite Gold Ltd. shareholders approved the proposed acquisition by Spitfire Materials Ltd., in which the latter will issue 1 share for every 2.8959 Aphrodite shares.

BULK COMMODITIES

* Bauxite Resources Ltd.'s board recommended that shareholders reject Mercantile OFM Pty. Ltd.'s takeover offer to buy 1 of every 2 fully paid shares in Bauxite Resources that it does not already own for 9 Australian cents apiece. The miner said an independent expert found that the offer is neither fair nor reasonable.

* Rio Tinto plans to increase the number of autonomous trucks at its iron ore operations in Pilbara, Western Australia, to 30% of its total fleet of about 400 haul trucks, from 20%, The West Australian reported, citing comments from the company's iron ore CEO, Chris Salisbury.

* Metals trader Liberty House Group's executive chairman, Sanjeev Gupta, said the company is looking to acquire factories in the Middle East, possibly involving buying manufacturers of steel or aluminum, among others, Bloomberg News reported.

* Meanwhile, Reuters cited Gupta as saying that the group is in talks to purchase and build more U.S.-based steel and industrial assets next year, after buying ArcelorMittal's Georgetown Steelworks at the weekend. The Georgetown steelworks, which includes a 540,000 tonne-per-annum electric arc furnace and a 680,000 tpa rod mill, is expected to restart in the spring.

* Fitch raised the long-term issuer default rating and senior unsecured rating of China Metallurgical Group Corp. from BBB to BBB+, with a stable outlook on the issuer default rating.

* Brazil's crude steel output rose by 15.30% year over year to 3.03 million tonnes in November, Metal Bulletin reported, citing figures released by national steel institute Aço Brasil.

* The Japan Iron and Steel Federation estimates Japanese crude steel output in the business year starting in April 2018 to increase slightly from the current year amid higher demand, but production in the current year ending March 2018 is likely to be little changed from 10.517 million tonnes in the preceding fiscal year, Reuters reported.

* JSW Group's JSW Techno Projects Management Ltd. unit confirmed it will buy a 49% interest in iron ore pellets manufacturer Brahmani River Pellets Ltd. from Aryan Mining & Trading Corp Pvt. Ltd. for an undisclosed amount. According to Reuters, the deal comes after Tata Steel Ltd. backed out of buying the Brahmani stakes in the absence of regulatory approvals.

* Fortescue Metals Group Ltd.'s stock price tumbled by as much as 17% this year as it failed to meet Chinese steel mills' demand for high-grade iron ore following the country's crackdown on heavily polluting steel mills, Bloomberg News reported.

* Tokyo Steel Manufacturing Co. Ltd. will raise steel bar and U-shaped steel-sheet pile prices by as much as 4.6% for a second consecutive month as a result of local and international market conditions and expected higher market prices, Reuters reported.

SPECIALTY

* Chilean development agency Corfo and lithium miner Sociedad Quimica y Minera de Chile SA agreed to suspend the ongoing arbitration proceedings for 30 days in a renewed push to resolve a dispute over mining claims, Reuters reported, citing Corfo.

* Technology Metals Australia Ltd. announced an initial resource estimate for the Southern Tenement area of its Gabanintha property in Western Australia, which hosts inferred resources of 21.5 million tonnes at 0.9% vanadium oxide, or V2O5, and 10.1% titanium dioxide, or TiO2. The resource includes a high-grade area of 10.4 million tonnes at 1.1% V2O5 and 12.6% TiO2.

* Savannah Resources Plc completed an initial estimate of lithium resources for the Reservatorio deposit of the Mina do Barroso lithium project in northern Portugal, with inferred resources containing 32,000 tonnes of lithium oxide within 3.2 million tonnes grading 1.0% lithium oxide.

* Namibia Rare Earths Inc. received environmental clearance certificates pertaining to its application for a mining license on the Lofdal heavy rare earths project in northern Namibia.

* Lucapa Diamond Co. Ltd. plans to schedule the next sale of alluvial diamonds from the Lulo project in Angola for early 2018. The sale parcel will include 2,160 carats of Lulo production, and includes the exceptional 129 carat and 78 carat Type IIa D-color diamonds recovered from mining Block 6 in November.

* The Mexican environmental authority granted Great Panther Silver Ltd. all required permits for the construction and operation of the new phase two tailings storage facility at its Topia silver mine in Durango, Mexico.

* The state government of Nebraska conditionally approved tax incentives for NioCorp Developments Ltd.'s Elk Creek superalloy project that are possibly worth more than US$100 million over the first 10 years of the project's commercial operations.

* Bass Metals Ltd. kicked off recommissioning of the Graphmada graphite mine in Madagascar.

INDUSTRY NEWS

* The Trump administration has dropped climate change from the list of national security threats contained in a new report, reversing what had been a key component of its predecessor's argument for reducing carbon emissions, promoting clean energy and other environmental regulations.

* Queensland's Mid Year Fiscal and Economic Review is forecasting a net surplus of A$485 million in 2017-18, three times higher than the budget forecast, on the back of record export figures, and strong resources royalties, ABC reported. Coal royalties for the year are now expected to be A$3.16 billion, which is A$414 million higher than forecast six months ago.

* South Africa's Chamber of Mines said that Deputy President Cyril Ramaphosa was elected as president of the African National Congress and will succeed Jacob Zuma as the party's leader.

* A landslide on the slopes of the Mount Merapi volcano in Indonesia's Java Island killed at least eight people mining sand and stones and injured another eight, Reuters reported, citing Sutopo Purwo Nugroho, a spokesperson for the country's disaster mitigation agency.

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