Mining Breaks

Australian miner Alkane Resources expects to exceed its increased minimum guidance of 30,000oz gold in the June year (FY20) despite the impacts of the COVID-19 pandemic on its 100%-owned Tomingley project in central NSW.
MD Nic Earner says government restrictions and Alkane’s own measures to protect employees, contractors and local communities have enabled operations to continue, although potential remains for interruptions if large numbers of employees test positive, supplies are reduced or more strict regulations are introduced.
Alkane says the mine retains about 250,000t of low-grade surface stockpiles in addition to its underground resources.

Allegiance Coal has completed the terms sheet with New York-based private credit asset manager Nebari Natural Resources Credit Fund 1 LP for a $US25M loan contributing to the start-up capital requirements of its New Elk hard coking coal mine in SE Colorado, USA.
The 36-month loan is still subject to Nebari’s technical, legal and business due diligence and Allegiance completing the mine acquisition and raising the balance of start-up capital for the mine start-up and initial debt repayment to Cline Mining.
Allegiance aims to return the New Elk mine to production in mid-2020.

West Australian multi-disciplinary engineer has won non-process infrastructure contract variations worth a combined $A20M at iron ore major Rio Tinto’s Koodaideri and Mesa K operations.
At Rio’s $US2.6B Koodaideri development, Primero has been awarded optional additions under the $A115M EPC contract awarded in Dec 2019 with overall completion date remaining mid-2021.
The variations on its Mesa K contract awarded last month at Rio’s Robe Valley sustaining projects cover additional civil works on the Mesa J PP2 wet processing facility. Completion is due this year.
Primero says it’s still on track with its FY20 contracted order book guidance but, with site activities yet to begin on major contracts at Koodaideri and Fortescue Metals’ Christmas Creek mine and the uncertainty of the COVID-19 pandemic, its $195M guidance remains under review.

Gold miner Red 5 has made an over-subscribed $A125M, $0.18cps share placement for the development of an integrated, bulk open pit/underground mine and stand-alone 4Mtpa processing plant for the King of the Hills Gold Project in Western Australia’s E Goldfields.
The final project FS is due for completion in the Sep 2020 qtr.
The cash will come in 2 tranches -- 171.5M shares ($30.87M) expected to settle April 3 2020 and 522.94M shares ($94.13M) settling May 12 2020 following shareholder approval.
Red 5 M/D Mark Williams says the deal will see Red 5 evolve into a multi-asset, mid-tier gold producer over the next 2-years, significantly de-risking funding for King of the Hills, now well established as one of Australia’s premier emerging gold projects.

West African producer Perseus Mining has nearly doubled forecast production in an updated life of mine plan for its Edikan gold project in Ghana.
Based on updated proved and probable reserves of 1.6Moz (45.7Mt @ 1.1g/t) announced last month, the new plan estimates total production of 1.307Moz over 6.2 years from July 2020 – 95% higher than previously. AISC is predicted to improve 5% to $US870-890/oz.
Average output is predicted to rise to 231,000ozpa over the next four years.
Perseus says forecast after-tax cashflows of $US356M at a $1,300/oz gold price show Edikan can contribute materially to development funding of the Yaouré gold mine in Côte d’Ivoire.

South American gold miner Troy Resources has regained normal operations at its 100%-owned Karouni mine in Guyana since its restart in Jan, ending a 3-month shutdown following the death of an employee in an embankment collapse.
Troy says, with the mill at full capacity, operating parameters are back at the levels prior to its suspension.
It comes as continuing infill RC drilling at the Hicks orebodies lifted overall Karouni proved and probable ore reserves to 86,500oz (1.3Mt @ 2g/t) – depleted for June 2019-Feb 2020 production.
Troy is now reassessing the Hicks 1 and 2 pit designs incorporating recent drilling and gold price increases.

Canyon Resources continues to line up logistical solutions as it progresses towards a June qtr PFS release date on its 100%-owned Minim Martap bauxite project in central Cameroon.
The Australian-based explorer has secured potential berth and storage allocations at Douala port and progressed access talks with rail authority Camrail supporting its initial low-capex, low-opex first stage development.
Projects director James Durrant says Canyon has achieved alignment with key stakeholders on progressing access agreements, including a second-stage expansion with the deepwater Kribi port.

West Australian battery metals explorer Liontown has deferred the start of a DFS on its 100%-owned Kathleen Valley lithium-tantalum project, opting instead for an upgraded PFS following its significant resource increase last month, including the delineation of a high-grade (>1.5% Li2O) zone at depth.
The change of strategy also follows a reassessment of its funding position due to the impact of COVID-19.
To conserve cash, CEO David Richards and COO Adam Smits will accept 40-45% reductions in cash remuneration and non-exec directors have deferred all fees from April 1.
Liontown will deliver a new resource estimate after drilling continued to demonstrate continuity of high-grade mineralisation at Kathleen Valley, 670km NE of Perth.

START THE WEEK: WHAT YOU NEED TO KNOW
Growing numbers of resources sector projects and mining companies report disruptions to production and financial performance around the world as the global COVID-19 coronavirus pandemic continues its exponential growth.
As well as committing to observe official restrictions on travel, personnel and freight movements and business activities, companies have implemented their individual health and safety procedures to protect their workers and their families, local communities and indigenous landholders.

YOU MAY HAVE MISSED
They may be hard to find, but there is still some mining sector news around that does not relate directly to coronavirus. (Note that some of the following articles may be accessible only by subscribers)

• NEW HIGGINSVILLE OPERATION SEES RNC CUT FY19 LOSS TO $7M
• ENDEAVOUR $1B SEMAFO BID TO TAKE NEW ENTITY BEYOND 1Moz pa
• UNIVERSAL COAL: TERRACOM LAUNCHES MANDATORY BUY-OUT
• CENTERRA GOLD: FY/CY19 TURNAROUND TO $93.5M LOSS

COMMODITIES
LME ($US), Mar 27 –
Aluminium 1,506.00
Copper 4,774.00
Zinc 1,848.50
Nickel 11,225.00
Lead 1,690.00
Tin 14,355.00
Cobalt 29,500.00
Gold 1,622.50
Silver 14.380

COMEX ($US), Mar 27 –
Gold 1,654.00
Silver 14.625
Copper 2.167
Platinum 742.5
Palladium 2,145.40

LBMA price data ($US), pm Mar 27 –
Gold 1,617.30
Silver 14.31500
Platinum 742.00
Palladium 2,253.00

NYMEX ($US) 62% Fe CFR China, Mar 27 –
Iron ore 88.49

CALENDAR
Public holidays –
Mar 30: Bridge Public Holiday (Argentina)
Mar 30-Apr 4: Public Holiday (Bangladesh)
Mar 31: Day of the Veterans Holiday (Argentina)
Apr 1: National Holiday (Cyprus)
Apr 2: Veterans Day (Argentina)
Apr 2: Rama Navami (India, Nepal)
Apr 2: Children’s Day Holiday (Taiwan)
Apr 2: Hung Kings Festival (Vietnam)
Apr 3: Tomb Sweeping Day (Taiwan)
Apr 4: Peace Day (Angola)
Apr 4: Qing Ming Jie (China)
Apr 4: Tomb Sweeping Day (Hong Kong, Taiwan)
Apr 4: Aliyah Day (Israel)
Apr 4: Independence Day (Senegal)
Apr 4: Children’s Day (Taiwan)
Apr 5: Ching Ming Day (China, Taiwan)
Apr 5: Arbor Day (Korea)

With its South African manganese and export coal operations in COVID-19 lockdown, South32 has announced cutbacks of $US150M in sustaining capital expenditure and $10M in exploration activity over the next 15 months.
South32 has also suspended the remaining $121M of its current on-market share buy-back scheme, subject to review by early Sept.
CEO Graham Kerr says it's seeking more “meaningful” operating cost reductions to retain its strong balance sheet through a possibly extended price downturn.
South32 now expects to complete the PFS on its Hermosa zinc-lead-silver project in USA in the Sept 2020 qtr while working with 50% JV partner BaoWu to preserve the value of the mothballed Eagle Downs metallurgical coal project in Australia beyond the investment decision planned by end-2020.

The introduction of stricter travel and mandatory quarantine measures by the Mozambique government have led Syrah Resources to suspend production at its Balama graphite operation.
After announcing earlier in the week it was keeping Balama working, Australian-based Syrah says the additional COVID-19 measures will limit the mobility of a significant portion of the mine workforce.
Sales of finished product will continue to be dispatched, although it acknowledges the situation could change due to travel restrictions.
Syrah, which suspended distribution of samples from its battery anode plant in Louisiana, USA this week, says an estimated $US64.6M cash balance at end-March will support it through an extended period of uncertainty.

UK-based Universal Coal has dropped its legal action and advised remaining shareholders to accept TerraCom’s cash-plus-shares offer after the Australian bidder lifted its entitlement past 90% of its shares and launched steps for the mandatory acquisition of the reminder.
After fighting the $A294M offer all the way, Universal says the stand-out shareholders are entitled under the UK Companies Act to receive the full offer value of 10c plus 0.6026 TerraCom shares for each of their Universal shares.

One of the world’s largest and lowest cost manganese exporters, the Tshipi Borwa mini in the Kalahari Manganese Field in the Northern Cape province, has joined other South African operations moving into care & maintenance as part of the national 21-day lockdown aimed at slowing the spread of coronavirus.
Australian-based Jupiter, which holds 49.9% of the project, says operator Tshipi é Ntle Manganese Mining can continue critical maintenance, security and pit dewatering among other essential services, readying for a quick return to production.
Estimated C&M costs are ZAR25M, which can be met from Tshipi’s existing cash reserves. The shallow opencast mine exported a record 3.51Mt manganese ore in FY19.

Western Australia-focused RNC Minerals has cut its Dec 2019 year (FY/CY19) net loss to $C6.9M from the previous year’s $8.4M loss on overall increased gold production from its 2 WA operations led by the recently acquired Higginsville gold mine/mill operations.
The result was on gold production up to 64,277oz from 62,233oz and sales to 65,225oz vs 62,806oz, with output from the Beta Hunt Gold Mine at Kambalda, near Kalgoorlie, sliding to 47,642oz from 62,233oz, offset by 16,635oz from the nearby Higginsville operations, acquired in June 2019.

West Australian miner Saracen faces about a 3-month delay in commissioning the expanded mill at its Carosue Dam operations due to possible delivery delays sparked by the COVID-19 pandemic in delivery of critical lead items including the mill (ex-China) and mill motor (ex-France).
Saracen now expects to commission the 3.2Mtpa mill in the March 2021 qtr, from the Dec 2020 qtr previously.
COVID-19 measures have helped Saracen deliver estimated record group production of 150,000-155,000oz gold for the current qtr (Q3FY20), but there is no certainty operations will not be impacted in the June qtr.
It’s FY20 guidance of 500,000oz-plus remains under review.

South African coal miner MC Mining has confirmed its 70%-owned Uitkomst colliery is being placed on care & maintenance during the 21-day national lockdown in response to the COVID-19 pandemic.
MC Mining had been seeking clarification on the mine’s status under the lockdown announced this week, but says its mechanised underground operation will allow a relatively quick ramp-up once the restrictions end.
The Australian-based company has suspended its production guidance for the June year (FY20) until it can quantify the full impact of the lockdown.

Philippines miner Metals Exploration has warned it cannot guarantee it will be able to continue to sell gold doré from its Runruno gold project on Luzon island because of growing logistical challenges caused by the COVID-19 pandemic.
As an export business, the mine is exempt from Philippines government directives restricting international transport of people and goods.
Metals Exploration says it has been able to continue operations despite supply chain interruptions of mining consumables and spare parts, but the world-wide closures of transport routes may end up forcing it to modify or curtail operations.

The widespread shutdowns of international air travel due to the COVID-19 virus have left Azerbaijan miner Anglo Asian seeking alternative logistics and refining options for gold doré from its Gedabek and Gosha mines.
While mining and production are exempt from government restrictions and continue as normal despite restrictions affecting staff rotations, Anglo Asian says it’s been unable to ship gold doré to its refiners in Switzerland since early March. The refinery operations have also been temporarily suspended by the Swiss government.
Copper concentrate production continues to be transported by road.
Anglo Asian is maintaining its FY2020 production guidance at 75,000-80,000oz gold equivalent.