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Newmont buying Goldcorp for US$10B; Glencore forwarded US$1B in loans to Gertler

Greenhouse gas and gold mines Nearly 1 ton of CO2 emitted per ounce of gold produced in 2019

Essential Metals & Mining Insights - September 2020

Essential Metals & Mining Insights - August 2020

State of the Market: Mining Q2-2020


Newmont buying Goldcorp for US$10B; Glencore forwarded US$1B in loans to Gertler

TOP NEWS

Newmont buying Goldcorp in US$10B all-scrip deal

Newmont Mining Corp. is acquiring Goldcorp Inc. in a US$10 billion all-share deal to create Newmont Goldcorp, with completion expected in the fourth quarter. Newmont offered 0.3280 of its share for each Goldcorp share. The combined company will target US$1.0 billion to US$1.5 billion in divestitures over the next two years to optimize gold production at a sustainable, steady-state level of 6 million to 7 million ounces per year. Newmont CEO Gary Goldberg said the merger is expected to generate up to US$100 million in annual pretax synergies. Goldberg added that potential buyers are already making inquiries about the assets the company is divesting as a result of the merger.

Glencore facilitated nearly US$1B in loans to US-sanctioned Gertler

Glencore PLC forwarded nearly US$1 billion in loans and advances to help fund U.S.-sanctioned businessman Dan Gertler's investments in the Democratic Republic of the Congo, where he is accused of corruption, The Wall Street Journal reported, citing the Paradise Papers. According to the documents obtained by the news outlet, the loans were made over an approximately 10-year period. The amount, which was more than previously reported and later confirmed by the Swiss trader, showed the financial ties between Glencore and Gertler during their decade-long partnership in the DRC.

AMCU to expand strike to Sibanye Gold's platinum operations

The Association of Mineworkers and Construction Union will move forward with the plan to expand its gold strike to Sibanye Gold Ltd.'s Rustenburg platinum group metals mines in South Africa, Fin24.com reported. Sibanye expects the planned action to cripple operations at Rustenburg, where the union has a large membership, company spokesman James Wellsted said.

BASE METALS

* Jinduicheng Molybdenum Co. Ltd. expects to record a net profit attributable to shareholders of between 345 million Chinese yuan and 395 million yuan for 2018, representing a year over year growth of between 222% and 268%, with EBITDA pegged to increase by between 517% and 616% from 50.7 million yuan of the previous year, to range between 313 million yuan and 363 million yuan.

* Orion Minerals Ltd. increased the indicated and inferred resource estimate for its Prieska project in South Africa to 30.5 million tonnes at 3.7% zinc and 1.2% copper, including an updated resource for the open pit.

PRECIOUS METALS

* Bankers and analysts cited by Reuters said Newcrest Mining Ltd., Kinross Gold Corp. and B2Gold Corp. may be next in line to merge with rivals following the announcement of the US$10 billion Newmont-Goldcorp merger.

* Alamos Gold Inc. produced 125,600 ounces of gold in the fourth quarter of 2018, up from 120,300 ounces it produced in the same quarter of 2017. Full-year 2018 gold production reached a record 505,000 ounces, significantly up from the year-ago production of 429,400 ounces and within the revised 2018 guidance of between 480,000 and 520,000 ounces. The higher production was driven by strong performance at the Mulatos mine in Mexico and record output at the Island gold mine in Ontario.

* Peru's Cia. de Minas Buenaventura SAA reported 2018 gold production of about 1.03 million ounces, near the midpoint of full-year guidance, and gold sales of 496,367 ounces. Total silver production for the year was 26.2 Moz, near the lower end of the guided range, while sales were 23.9 Moz.

* Goldcorp said gold production for the fourth quarter of 2018 increased 25% from the previous quarter to 630,000 ounces, beating guidance, with full-year production of 2.3 million ounces. Additionally, the company said it achieved commercial production under budget and ahead of schedule at the Penasquito gold project in Mexico in December 2018.

* Coeur Mining Inc.'s fourth-quarter 2018 silver equivalent production reached 9.8 million ounces, down from the year-ago silver equivalent output of 10.8 million ounces. Full-year 2018 production came in at 35.6 million ounces of silver equivalent, down from 39.4 million silver equivalent ounces it produced in 2017 and failing to meet its revised guidance of between 36.1 million and 39.5 million silver equivalent ounces.

* First Majestic Silver Corp. reported a 37% increase in production to a record high of 22.2 million silver equivalent ounces for 2018, falling within the company's annual guidance. The company anticipates 2019 total production at 24.7 million to 27.5 million silver equivalent ounces.

* Golden Rim Resources Ltd. has hit 10 meters at 4.1 g/t gold at the Red Hill prospect in its Kouri project in Burkina Faso which managing director Craig Mackay said could lead to a second, satellite resource bigger than the first, though broker Hartleys says it is very early days yet. Mackay told S&P Global Market Intelligence that the continuity of the mineralization and grades particularly impressed the junior, particularly given it is the only second area into which Golden Rim has put a concentration of holes.

* Agnico Eagle Mines Ltd.'s gold output is expected to grow to approximately 2 million ounces per year by 2020 as the company remains focused on growing its production base and investing in its exploration and development projects, the Metals and Mining Research team at S&P Global Market Intelligence wrote.

* MX Gold Corp. reached two agreements to sell its remaining assets in an arm's length transaction to Cameo Cobalt Corp. in a cash and shares deal, plus a 50% net profit interest in the properties.

* Canoe Mining Ventures Corp. canceled its proposed reverse takeover of OpenPort Ltd., a Hong Kong-based blockchain logistics solutions company.

* Australian billionaire Kerry Stokes cut his stake in Saracen Mineral Holdings Ltd. to just below 5% after selling almost 10 million shares for A$30 million, The Australian reported.

* White Gold Corp. inked a binding letter agreement to acquire the QV gold project in Canada's Yukon Territory from Comstock Metals Ltd. for a total of C$2.6 million in cash, shares and share purchase warrants.

BULK COMMODITIES

* Fortescue Metals Group Ltd. could benefit from Rio Tinto's inability to meet certain shipment commitments through a potential price tailwind for lower-grade iron ore, The Australian reported, citing Shaw and Partners analyst Peter O'Connor.

* An independent expert report by Grant Thornton, commissioned by Golden Investments (Australia) Pte. Ltd., found that Stanmore Coal Ltd. was valued at between 84 Australian cents to A$1.10 per share, a far cry from the between A$1.48 per share and A$1.90 per share assessment by Stanmore's independent expert, BDO Corporate Finance, The Australian Financial Review's Steet Talk reported. Previously, the Australia-listed coal miner rejected a 95-cent-per share takeover offer by Golden Investments, which it said "significantly undervalues" the company.

* Japan set a 30-day deadline for South Korea to respond to its request for government talks over forced labor by South Koreans before and during World War II, after a South Korean court granted a request to seize Nippon Steel & Sumitomo Metal Corp.'s assets in the country, The Korea Herald reported.

* In 2019, China's steel industry will shift its focus to improving capacity structure from cutting overall capacity, Reuters reported, citing Yu Yong, chairman of China Iron and Steel Association. The plan includes optimizing production structure, adjusting the layout of steel mills and pushing mergers and acquisitions.

* Dissident Altona Energy PLC shareholders failed in their bid to oust Qinfu Zhang and Chi Ma as directors, after resolutions calling for their removal were not passed in a general meeting.

SPECIALTY

* Blackstone Resources AG committed to spend €200 million on a new battery production project in Germany. The project's first phase is targeted to have an initial capacity of 100 million battery cells per annum, or the equivalent of 25,000 to 100,000 electric vehicle batteries.

* PJSC Alrosa opened a new subsidiary in Zimbabwe, called Alrosa (Zimbabwe) Ltd., as the company plans to develop new mining operations in the country. Alrosa experts, including geologists and mining engineers, are set to arrive in Zimbabwe in February.

* Newfield Resources Ltd.'s Sierra Diamonds Ltd. subsidiary received a large scale mining license, valid for a period of 25 years, for its Tongo diamond project in Sierra Leone.

* Tertiary Minerals PLC plans to lodge an appeal with the Swedish government against the Swedish Mining Inspectorate's decision to reject the company's exploitation permit for its Storuman fluorspar project in Sweden.

* Montero Mining & Exploration Ltd. posted an initial resource estimate for the Uis lithium-tin tailings project in Namibia for an inferred resource of 14.4 million tonnes at 0.37% lithium as lithium oxide and 17.1 million tonnes at 0.05% tin as tin oxide.

* Image Resources NL completed the loading of the first bulk shipment of nominally 10,000 wet tonnes of heavy mineral concentrate produced from its Boonanarring mine in Western Australia.

INDUSTRY NEWS

* Veteran resources executive Norm Seckold, who co-founded one of the ASX's biggest 2018 metals and mining IPOs Nickel Mines Ltd., has joined a chorus of analysts saying resource stocks will continue to suffer throughout this year even amid robust commodities demand, unless the U.S.-China trade war ends. However, Alto Capital Investment Manager Tony Locantro told S&P Global Market Intelligence that "there's no just no appetite for resource stocks at the moment" with China's weak manufacturing numbers and concern over its credit bubble weighing on stocks, along with the trade war.

* Argentina could become more attractive to investors as it is set to join the Extractive Industries Transparency Initiative, an international transparency standard for managing oil, gas and mineral resources, Reuters reported. The global initiative requires member countries to disclose their dealings with companies, including earnings from taxes and royalties.

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