Mining Breaks

START THE WEEK: WHAT YOU NEED TO KNOW
Like the city that has been its home for 30 years, Australia’s annual Diggers and Dealers mining forum in Kalgoorlie this week has survived due to the resilience and commitment of its organisers and the industry that it celebrates.
The 2021 event has attracted close to 2,500 delegates, in the ballpark with some of its biggest years, despite the international and interstate travel restrictions and lockdowns that have effectively shut it off to all except a West Australian audience.
The extraordinary strength of the mining sector in the face of the pandemic has attracted 55 speakers from a full range of companies producing or exploring for rare earths, gold, base metals, battery metals, iron ore, bauxite, potash and uranium.
All presentations over the three days of the forum will be available via a free live-streaming service.

COMMODITIES
LME ($US), Jul 30 –
Aluminium 2,624.00
Copper 9,747.50
Zinc 3,039.00
Nickel 19,892.00
Lead 2,424.00
Tin 35,965.00
Cobalt 52,425.00
Gold 1,814.20
Silver 25.480

COMEX ($US), Jul 30 -
Gold 1,817.20
Silver 25.547
Copper 4.4825
Platinum 1,048.40
Palladium 2,656.20

LBMA price data ($US), pm Jul 30 –
Gold 1,825.750
Silver 25.490
Platinum 1,044.000
Palladium 2,658.000

NYMEX ($US) 62% Fe CFR China, market close Jul 30 –
Iron ore 211.99

YOU MAY HAVE MISSED
(Some articles may be accessible only by subscribers)

• RIO TINTO $2.4B TO BACK JADAR BATTERY MINERAL PROJECT
• TVI PACIFIC SEIZES OPPORTUNITY IN THAWING PHILIPPINES ENVIRONMENT
• OCEANAGOLD’S DIDIPIO RESTORATION TO PUSH FULL YEAR GUIDANCE
• KIRKLAND LAKE GOLD DELIVERS EARNINGS RECORD 
• FORTESCUE METALS HITS NEW FY IRON ORE RECORD

CALENDAR
Conferences -
Aug 2-4: Diggers & Dealers, Kalgoorlie (Australia)

Companies -
Aug 5: SSR Mining Q2, Denver (USA)
Aug 5: Glencore HY Financials, Baar (Switzerland)

Public holidays -
Aug 2: Canada (Provincial Observances)
Aug 2: Guyana (Emancipation Day Observance)
Aug 2: Iceland (Commerce Day)
Aug 2: Ireland, Scotland (Bank Holiday)
Aug 2: North Macedonia (Republic Day)
Aug 2: Zambia (Farmers Day)
Aug 3: Niger (Nigerien Independence Day)
Aug 3: Venezuela (Flags Day)
Aug 4: Ghana (Founder’s Day)
Aug 4: Venezuela (National Guards Day)
Aug 5: Burkina Faso (National Day)
Aug 5: Croatia (Homeland Thanksgiving Day)
Aug 6: Bolivia (Independence Day)
Aug 6: El Salvador (San Salvador Celebration)
Aug 6: Rwanda (Umuganura Day)
Aug 7: Colombia (Battle of Boyaca Day)
Aug 7: Cote d’Ivoire (Independence Day)
Aug 8: Brazil (Fathers Day)
Aug 8: Japan (Mountain Day)
Aug 8: Tanzania (Farmers Day)

With its iron ore production capacity clawing back to 330Mtpa from the shutdowns and suspensions triggered by the 2019 Brumadinho tragedy, global mining giant Vale has posted record proforma adjusted EBITDA of $US11.24B for the June qtr (Q2FY2021), up from $8.47B in the previous period.
The result was driven more by higher realised prices for iron ore and pellets than volumes, which were offset by higher costs for freight, maintenance and services.
The Brazilian company’s prime ferrous minerals business generated EBITDA of $10.68B (Q1: $7.81B), with higher prices and volumes partly offset by higher C1 and freight costs.
Base metals delivered $0.87B ($0.72B) EBITDA, after labour disruptions at Sudbury in Canada reducing profit from its nickel operations.
Coal operations produced $164M negative EBITDA, a further blowout from $159M in Q1, but Vale expects the EBITDA should begin to reflect the benefit of its Nacala Logistics Corridor integration in Mozambique from Q3.

New producer Salt Lake Potash has halved production guidance and is seeking more funding after striking commissioning issues at the newly completed process plant at its flagship Lake Way SOP project in Wiluna, Western Australia.
Its new sulphate of potash production target for the year to June 2022 of 85,000-105,000t, down from 165,000-185,000t, allows for a suspension of plant feed for up to 14 weeks following an initial processing campaign to produce material for initial customer sales.
SO4 revised its ramp-up strategy after experiencing excessive grade variability in salt formation, resulting in lower average potassium and higher halite content.
CEO-MD Tony Swiericzuk says the project fundamentals remain positive, but the delay in the ramp-up profile will leave the company requiring further funding by end-2021 to continue operations.

West Australian company Mineral Resources has again expanded its iron ore assets with agreement to acquire a 40% stake in the Red Hill Iron Ore JV, a mineral resource of 820Mt @ 56.44% Fe in the West Pilbara region.
MRL will pay explorer Red Hill Iron $400M in staged cash payments and 0.75% royalty on future iron ore sales for its 40% interest in the project. The remaining 60% of the JV is held by Baosteel’s Aquila Resources, AMCI Group and POSCO.
MD Chris Ellison says its participating interest in Red Hill fits MRL’s strategy to unlock stranded Pilbara iron ore deposits into a long-life sustainable business centred on its proposed Ashburton Hub development.

Australian copper explorer Encounter Resources has joined the rush to take advantage of strong market interest in new floats, announcing plans to demerge its 100%-owned West Tanami gold project in WA through an IPO of its subsidiary Hamelin Gold.
The West Tanami project covers 2,275sqkm of an emerging but significantly under-explored gold province. Hamelin’s listing is expected to occur in the Dec 2021 qtr.
MD Will Robinson says Hamelin will attract stronger investor attention and valuation as a standalone entity.
The demerger will allow Encounter to focus on its growing copper portfolio in WA’s Paterson province, the Greater McArthur Superbasin in the NT where it has partnered with BHP to explore the Elliott copper project and the West Arunta region of WA.

Zimbabwe platinum miner Zimplats Holdings posted June qtr (Q4FY21) total production of 153,643oz 6E, recovering from the 137,093oz in the previous period due to mine closure following a fatal wall collapse. Cash costs improved to $US655/oz ($710/oz).
Ngwarati mine, closed in Feb following the high wall collapse, reopened for production on July 1.

Indian-backed Griffin Coal has declared force majeure at its thermal coal mine in the West Australian town of Collie, supplier to one of the state’s largest power stations, over the impact of record winter rainfall that has frequently halted opencut mining operations.
As WA’s south west posts the highest rainfall levels on record for the month of July, general manager Joao Paulo da Silva Fernandes announced the suspension of deliveries to customers who include the Japanese-owned 400MW Bluewater power station.
Fernandes says rainfall and the need to clean up pits after storms halted overburden excavation and prevented it exposing sufficient coal, ABC Radio reported.
State energy minister Bill Johnston queried the need for declaring force majeure, noting the nearby rival Premier mine was operating normally.

International miner OceanaGold aims to issue updated guidance for its FY2021 gold production shortly to include the planned resumption of mining at its Didipio operation following the renewal of its formal financial/technical assistance agreement by the Philippines government.
Excluding Didipio, OceanaGold has revised full year guidance for its remaining mines - Haile in USA, Waihi and Macraes in NZ - to 350,000-370,000oz at AISC of $US1,200-1,250/oz.
At Didipio, President-CEO Michael Holmes says re-hiring and training of skilled local staff with a view to selling 18,500oz gold and 3,500t copper in concentrate by early Q4. He says restoring 1.6Mtpa full underground production could take up to 12 months, subject to recruitment and COVID-19 risks.

Attributable gold equivalent production from Canadian miner Kinross Gold’s global operations spanning the Americas, Russia and West Africa have fallen to 538,091oz AuEq in the June 2021 qtr (Q2 21) from 558,777oz in Q1 21, with sales easing to 547,819oz from 548,084oz, cutting net earnings to $US119.3M from $149.5M and adjusted net earnings to $156.5M from $192.8M.
The bottom line came despite revenue up to $1,000.9M from $986.5M, with net cash flow from operating activities up to $388.2M from $279.8M, adjusted operating cash flow easing to $363.8M from $399.6, but free cash flow jumping to $182.8M from $75.6M. Production cost of sales, on a by-product basis, rose to $802oz from $756oz as was AISC to $1,069oz from $975oz.
Kinross remains on track to meet revised production guidance of 2.1M AuEq oz and continues to expect production to increase in 2022 and 2023 to 2.7Moz AuEq and 2.9Moz AuEq respectively. The company finished Q2 21 with cash/equivalents of $675.6M after repaying $500M in debt, with total liquidity of about $2.2B at June 30, 2021, from 1,056.1M.

Lower gold production and a $US213.8M after tax impairment charge have seen miner Alamos Gold post a June 2021 qtr (Q2 21) $223.7M turnaround from Q1 21 net earnings of $51.2M to a $US172.5M net loss.
Adjusted net earnings fell to $38.7M from $49.1M on operating revenues down to $195.1M from $227.4M, with cash before working capital and cash taxes down to $97.2M from $119.6M and cash from operating activities slipping to $86.7M from $99.3M.
The bottom line was on gold production falling to 114,200oz from125,800oz and sales to 107,581oz from 126,482oz at cash costs sold up to $791oz from $757oz and AISC sold to $1,136oz from 1,030oz. Production from the Young-Davidson mine in Canada eased to 45,100 from 48,000oz and Island Gold, also in Canada, to 33,200oz from 42,200oz, while Mulatos, Mexico, rose a little to 35,900oz from 35,600oz.
The company finished Q2 21 with cash/equivalents of $233.9M.

Despite a very profitable June 2021 qtr (Q2 21), with net earnings jumping to $US268.4M from Q1 21’s $154.2M, Canadian precious/base metals producer Lundin Mining has lowered FY/CY 21 production expectations for all its commodities, except nickel, which rose.
The company’s operations in Brazil, Chile, Portugal, Sweden and the US generated adjusted earnings up to $226.3M from $144.4M on revenue jumping to $872.3M from $681.5M for a gross profit up to $380.2M from $252.5M, primarily due to higher realized metal prices and other price adjustments. Adjusted EBITDA jumped to $480.7M from $354.4M, with cash flow from operations rocketing to $419M from $158.7M and adjusted operating cash flow to $431.6M from $279.8M
The Q2 21 bottom line was on copper-in-conc up to 63,457t from 57,354t, zinc to 34,833t from 33,365t and gold to 41,000oz from 34,000oz, but nickel sliding to 4,774t from 5,354t.
The revised Dec 2021 year (FY/CY 21) guidance (100% basis) is for copper to 255,000t-267,000t from 253,000t-272,000t, zinc to 140,000t-146,000t from 141,000-151,000, gold to 158,000oz-166,000oz from 160,000oz-170,000oz and nickel to 18,000t-20,000t from 17,000t-20,000t. Lundin finished Q2 21 with cash/equivalents to $294.9M from $181.3 and net cash up to $153.4M from $8.1M.

Australian strategic minerals producer Suvo has lifted refined kaolin production from its Pittong operations in Victoria to 6,544t for the June qtr (Q4FY21), up from 5,920t in the March qtr - its first in the company’s ownership.
After fielding increasing sales enquiries, Suvo says it expects to reach a decision in the March 2022 qtr on the potential for a material plant upgrade at Pittong.
The company has also commissioned consultants to design a small plant to recover kaolin from Pittong’s waste stockpiles while silica sand could be sold directly into local glass markets.

The world's largest primary silver producer Fresnillo, with 7 mines in Mexico, has had a mostly good year with the major commodities all up, apart from gold, which fell to 200,163oz in the June 2021 qtr (Q2 21) from Q1 21’s 228,193oz, primarily on lower ore grades and volume of ore processed at the Dynamic Leaching Plant at Herradura.
Mainstay silver jumped 17% to 14.9Moz, driven mainly by a sharp improvement in ore grades at San Julián, with lead up to 16,386t from 15,340t also on higher ore grade and volume of ore processed at San Julián, and zinc rose to 27,687t from 25,881t on a higher ore grade at Fresnillo and higher volume of ore processed at San Julián.
The company remains on track to meet FY/CY 21 guidance of 53.5Moz-59.5Moz of silver and 675,000oz-725,000oz of gold. 2021 interim results expected Aug 3, 2021.

Strong performance by its three major assets, and particularly its Fosterville project in Australia, have enabled Canadian-based miner Kirkland Lake Gold deliver record earnings and production in the June qtr (Q2FY2021).
Net earnings rose to $US224.2M, from $161.2M in the previous period, on revenue of $662.7M (Q1: $551.8M) from sales of 364,575oz (308,029oz) at $1,814/oz ($1,788/oz). Gold production was 379,195oz (302,847oz) at AISC of $780/oz ($846/oz).
Strong cashflow more than offset higher capital expenditures and income tax plus a $62M return to shareholders, enabling the company to end the period with cash of $858.4M ($792.2M) with no debt.

Despite record June 2021 qtr (Q2 21) copper production from Capstone Mining’s Cozamin underground copper-silver mine in Zacatecas State, Mexico, to 13.8Mt from Q1 21’s 11.4Mt, overall copper output from the company’s 2 mines fell to 43.3Mt from 47.8Mt and net income to $US49.4M from $127M.
The fall was down to a production drop at the Pinto Valley mine, Arizona, US, to 29.5Mt from 36.4Mt, which saw Q2 21 copper sales down to 43.1Mt from 49.2Mt, with C1 cash costs up to $1.91/lb from $1.70/lb, including Pinto Valley up to $2.33/lb from $1.94/lb and Cozamin to $1.00/lb from $0.91. The realised copper price, however, rose to $4.78/lb from $4.120/lb.
Capstone’s adjusted net income rose to $68.7M from $64.4M, on revenue up to $209.4M from $204.1M and adjusted EBITDA was a record $128.0M from $118.7. Cash flow from operating activities eased to $168.5M from $220.3, with operating cash flow before changes in working capital, down to $140.4M from $245M.
The company finished Q2 21 with net cash up to $171.5M from $44.8M, with net cash up by $126.7M to $171.5M, inclusive of $30M from the gold stream agreement.

Record final quarter shipments have seen Australian miner and services company Mineral Resources lift total iron ore shipments to 17.27Mwmt for the June year (FY21), up from 14.07Mt in FY20. Delays to three shipments caused by port congestion delays at Kwinana, south of Perth, prevented MRL meeting its revised 17.4-18Mt guidance for the year.
Total production reached 19.47Mt (FY20: 14,048t), with its Yilgarn Hub operation contributing 11Mt (7.89Mt) and the Iron Valley and Wonmunna projects in its Utah Point Hub delivering 8.47Mt (6.16Mt).
MRL’s 50%-owned and managed Mt Marion lithium project produced 485,000t (496,000t) spodumene.
The company says anti-COVID state border closures and lockdowns continued to impact operations, including road transport constraints due to shortages of road train drivers.
MRL says construction of the 50,000tpa Kemerton lithium hydroxide plant in WA, a 50-50 JV with Albemarle Corp, is expected to deliver its first battery grade hydroxide by end-2021.

The commencement of commercial production following the refurbishment of its 100%-owned Plomosas mine in Mexico’s Chihuahua state has seen Consolidated Zinc lift its June qtr (Q2) payable metal sales to 632t zinc (Q1: 668t), 158t lead (139t) and 2,006oz silver (361t).
Concentrate sales were 1,446t Zn (719t) and 265t Pb (184t). Plomosas ended the period with stockpiles of 341t Zn concentrate and 2-07t Pb concentrate for sale in the current qtr.
Increased unit diesel prices, higher energy consumption and lower than expected zinc and lead recovery contributed to an increase in C1 cash operating costs to $US1.18/lb payable Zn ($1.08/lb).
CZL says modifications including reinstatement of the secondary crusher are expected to improve Zn and Pb recovery.

Australian iron ore producer Fortescue Metals Group has exceeded its full year guidance - just - with total shipments from its Pilbara system in WA coming in at a record 182.2Mt for FY21, compared to 178.2Mt in FY20. Guidance for the year was 182Mt.
CEO Elizabeth Gaines says the record result was achieved despite the impact of wet weather and COVID-19 restrictions that required many team members to remain on site for extended periods during state lockdowns.
Fortescue’s C1 cost rose to $US13.93/wmt (FY20: $12.94/t).
Average revenue of $135.32/dmt ($81/t) represented 88% (86%) of the Platts 62% CFR index of $154.31/t.
Gaines says FY22 shipments will rise again to 180-185Mt at $15-15.50/t, reflecting its commitment to optimising returns from its integrated operations and marketing strategy.

The acquisition of a 30% stake in the Tropicana project promises a material step-up in scale for Australian miner Regis Resources after posting gold production of 372,870oz at AISC of $A1,373/oz for the June year (FY21), up from 352,042oz at $1,246/oz in the previous year.
The result included two months’ contribution of 17,317oz at $2,121/oz for its share of production from AngloGold Ashanti’s 70%-owned Tropicana mine and a strong 355,553oz from its Duketon Operations.
Regis set FY22 guidance at 460,000-515,000oz at $1,290-1,365/oz, with Duketon to contribute 340,000-380,000oz at $1,340-1,410/oz and Tropicana 120,000-135,000oz at $1,140-1,230/oz. First production from its new Garden Well underground mine is expected in Q4.

New Philippines owner TVI Resource Development is targeting a mining restart in H1 2123 after agreeing to acquire Australian miner Red 5's mothballed Siana gold project, mothballed since 2017 due to the Duterte government’s anti-mining policies, for $US19M cash and up to $35M NSR royalty.
Cliff James, chairman of TVIRD and Canadian-based TVI Pacific, which owns 36% of the company, says the acquisition coincides with positive changes in the Philippines government and financial community towards mining projects. All required permits are in place to bring Siana out of its voluntary care and maintenance.
The acquisition includes the on Mindanao mine's 1.1Mtpa Outotec mill, gravity and CIL facility and all other key infrastructure.
Despite spending over $200M on efforts to develop the mine, Red 5 says the sale is consistent with its strategy to focus on becoming a mid-tier Australian gold producer.