Mining Breaks

OZ Minerals has found another year of mine life for its Prominent Hill copper and gold project in South Australia after increasing its underground ore reserve to 40Mt @ 1.7% copper equivalent – after mining depletion.
With the proved underground ore reserve up 50% and about 80Mt of underground resources outside the reserve, the mine life has been extended to 2030 at the expected underground production rate of 3.5-4Mtpa from 2019.
MD-CEO Andrew Cole says Prominent Hill has again demonstrated it can extend mine life by converting its resource base. OZ will continue drilling to convert more material into reserves with the aim of extending mine life year-on-year.

Big Russian gold miner Polymetal has given the green light for the start of construction of its $US234M pre-production capex, 25-year LoM Nezhda Gold Project, based on the 4th largest gold deposit in Russia’s NE Yakutia region, with 1st production planned for Q4 2021 and full ramp-up by Q2 2022.

Ariana Resources has lifted gross income from the new Kiziltepe Gold Mine, part of its 50/50 Red Rabbit JV with Proccea Construction in W Turkey, to $US10.12M for the Sept 2018 qtr (Q3 18) from Q2 18’s $10.07M, with operating cash costs falling to $330oz from $371oz.
The result was on record gold production of 7,588oz from Q2 18’s 7,171oz, already taking Kiziltepe’s total YTD18 output to 19,625oz, compared to FY/CY18 guidance of 20,000oz, with Q4 18 still to come.

Global miner Rio Tinto is returning $US2.1B to its shareholders after completing its off-market buy-back of about 41.2M Rio shares for $2.08B at $A69.69ps, taking 2018 cash returns to shareholders to $US6.4B.
The remaining $1.1B of funds will be returned through the ongoing $3.2B buy-back announced in Sept 2018 from the sale of coal assets.

Arc Infrastructure is hoping to complete repairs on its Esperance- Koolyanobbing rail line in Western Australia this week after 30 empty Mineral Resources iron ore wagons were derailed on Sunday, the 2nd WA iron ore derailment in a week after an unmanned, runaway 3km-long BHP Iron Ore was deliberately derailed further north.
No one was injured in either incident and while Esperance-Koolyanobbing rail line owner/operator Arc expects repairs to the track to be completed this week, it’s not known when the line will re-opened.

Gold miner Ramelius Resources has lifted its $A60M conditional, off-market, hostile takeover offer for explorer fellow Western Australian Explaurum with an additional $5cps non-binding, incomplete cash offer.
The original 1-for-4 share bid remains unchanged. Based on the closing 41cps Ramelius price on Nov 9, 2018, the new offer values Explaurum at 15.25cps, a 48% premium on the existing offer. It’s also a 27.1% premium on the 12cps price under the recent 66.6M, $8M placement agreement with gold miner Alkane Resources for 12.2% of Explaurum, along with a 53.4M options package taking the deal to a potential $15.3M. Alkane says it will not yet trigger the termination of the shares/options deal or call the break fee.
Explaurum has granted Ramelius a limited period of confirmatory due diligence in relation to the Tampia Gold Project near Ramelius’ Edna May Gold Mine in WA. The Explaurum board continues to recommend rejection of the current offer.

Pilbara Minerals has given the go-ahead for the Stage 2 expansion of its 100%-owned Pilgangoora lithium-tantalum project in Western Australia, a forecast $A231M project that will lift output to 5Mtpa from the initial 2Mtpa.
Major works at the mine site 120km SE of Port Hedland are expected to begin on completion of the balance of financing and final environmental approvals.
Pilbara Minerals has already placed 100% of its Stage 2 offtake with customers POSCO, Ganfeng Lithium and Great Wall Motor Co.

Melior Resources expects to begin product haulage in the March 2019 qtr after achieving first production from its refurbished and upgraded Goondicum ilmenite and apatite mine in Queensland, Australia.
The Canadian-based company says Goondicum’s ramp-up towards full capacity of 160,000tpa ilmenite and 40,000tpa apatite will continue through the June qtr. Forecast mine life is 9 years.
Production from the mine, 30km E of Monto, will be trucked to Gladstone for export. Major Chinese producer Hainan Wensheng High Tech Minerals will take 65% of Goondicum’s production under a $US5M loan/offtake agreement.
Melior shareholders vote at its Nov 27 AGM in Toronto on a planned merger with Metallica Minerals.

Sheffield Resources has signed an EPC contract with GR Engineering for the 7.5Mtpa mineral processing plant and associated facilities at its $A463M Thunderbird mineral sands project in Western Australia’s Kimberley region.
The contract for engineering design, procurement and construction is valued at about $A366.3M.
The start of work awaits the finalisation of conditions relating to project financing and a formal investment decision.

START THE WEEK: WHAT YOU NEED TO KNOW
The market should begin to learn very shortly the medium-term implications for BHP Iron Ore of the runaway train that brought its highly sophisticated and massively expensive Pilbara logistics chain to sudden halt shortly after 5am Western Australian time on Monday, November 5.
The deliberate move to divert a driverless, fully laden 3km long train likely to have been travelling at over 100kmh into a 1.5km long siding probably prevented a far greater disaster if it had been allowed to continue running towards Port Hedland 120km away.
Limited operations on the line have reportedly resumed while track repairs continue. Analysts calculate the interruption to rail operations would cost BHP up to 800,000tpd.
Stockpiles at Port Hedland have helped to keep ships loading but, although BHP’s Pilbara mines kept operating, and stockpiling ore, it will be no easy job to find extra capacity in a system already operating at high levels.
CEO Andrew Mackenzie said he was confident BHP wouldn’t let down any customers and did not intend to declare force majeure.

YOU MAY HAVE MISSED

• BUSHVELD MINERALS CUTS VAMETCO VANADIUM GUIDANCE AFTER STOPPAGES 
• GOLD FIELDS FY FORECAST REDUCED BY SOUTH DEEP IMPACTS 
• IMPERIAL METALS BC MINER RECOVERIES REDUCE Q3 LOSS 
• METALLICA MINERALS FINALLY GETS OKAY FOR BAUXITE MINE ROAD 

COMMODITIES
LME ($US), Nov 9 –
Aluminium 1,964.50
Copper 6,088.00
Zinc 2,556.00
Nickel 11,470.00
Lead 1,957.00
Tin 19,310.00
Cobalt 51,000.00
Gold 1,208.10

COMEX ($US), Nov 9 -
Gold 1,210.30
Copper 2.6785
Silver 14.13

NYMEX ($US) 62% Fe CFR China, Nov 9 -
Iron ore 75.58

CALENDAR
Public holidays –
Nov 11: Remembrance Day (UK, France)
Nov 12: Veterans Day (USA)
Nov 15: Republic Day (Brazil)
Nov 17: Freedom and Democracy Day (Czechia)

South African miner Bushveld Minerals has lowered full year production guidance for its Vametco vanadium mine after a 16-day illegal strike and unplanned 7-day kiln maintenance exercise cut Sept qtr (Q3) production to 537mt, down from 629t in the June qtr.
FY2018 production from the Bushveld Complex project is now forecast at 2,600-2,650t, down from 2,850-3,000t.
CEO Fortune Mojapelo says Bushveld can focus on achieving maximum production and efficiencies after increasing its Vametco interest to 74%.

Kibo has submitted its application for a full mining right over its advanced-stage, 85%-controlled Mabesekwa coal independent power project following a formal presentation to Botswana's Mines Department.
The company is continuing a DFS for development of a 3.2Mtpa project with a mine life of over 30 years from the 303Mt coal resource to power a 600MW generation station at Mabesekwa, 50km SE of Francistown.
Water and land permits and environmental certification are in place.
Kibo says synergies between Mabesekwa and its Mbeya (Tanzania) and Benga (Mozambique) will provide considerable economies of scale and timing.

Another strong operating performance by Gold Fields’ international assets offset continuing negative impacts of the restructuring of its South Deep mine in South Africa to lift Sept qtr (Q3) attributable gold production to 533,000oz, from 504,000oz in the June qtr.
AISC was $US977/oz (Q2: $973/oz).
South Deep’s decline have led Gold Fields to again lower its FY2018 production guidance to 2Moz, while its AISC forecast remains $990-1,010/oz.

Record gold production from TMAC Resources’ 100%-owned  underground Hope Bay Gold Project in Nunavut, N Canada, has seen the company cut its Sept 2018 qtr (Q3 18) loss to $US3.3M from Q2 18’s $10.3M loss.
However, the new high output of 33,100oz from 25,970oz at cash costs sold down 11% to $778oz and AISC down the same to $1,456oz, resulted in a profit from mining operations of just $300,000 from $1M and cash flows from operations halved to $6.1M from $14.6M.
After a difficult July, TMAC has ramped up the processing plant to average 80% recoveries, with a steady throughput increase to an average 1,385tpd for Q3 18 and to an average 1,900tpd processed in Oct. The underground Madrid and Boston properties are expected to begin production in 2020 and 2022 respectively.

Lower gold production from its sole producing Brucejack underground mine in Canada’s N British Columbia, higher ASIC, lower gold prices and a $US1.6M loss on trade receivables, has seen Pretium Resources’ Sept 2018 (Q3 18) net profit plunge to $10.7M from Q2 18’s $31.1M.
Adjusted earnings fell to $26.3M from $47M on revenue down to $110.1M on 94,458oz sold from $146.5M from 115,309oz sold, generating cash flow down to $52.4M from $77.3M.
Gold production declined to 92,641oz from 111,340oz at total cash costs sold lower at $568oz from $749oz, but AISC up to $709oz from $648oz, with the average realized price down to $1,169oz from $1,278oz.
The results see Pretium on track for H2 18 output at the lower end of 200,000oz-220,000oz for a FY/CY18 387,000oz-407,000oz at AISC $710oz-$770oz. The company finished Q3 18 with cash/equivalents of $190.3M.

Australian potash developer SO4 has received commitments to raise $A13M for initial infrastructure at its $A49M Lake Way development, including pond construction and pit dewatering.
Recently appointed CEO Tony Swiericzuk says the strongly support for its WA Goldfields Salt Lakes project moves the company towards being the first Australian commercial SOP supplier to the global market.
An unnamed investment fund will be cornerstone investor for the placement of 31M shares at 42cps, 13.4% below latest closing price. SO4 directors and managers will take 2.4M shares, including 950,000 by Swiericzuk and 750,000 by chairman Ian Middlemas.

The road back from a ball mill failure at its Red Chris mine and a strike at Mt Polley, both in Canada’s British Columbia, has seen copper-gold miner Imperial Metals cut its Sept qtr 2018 (Q3 18) net loss to $C28.6M from Q2 18’s $36.5M loss, but with its adjusted loss out to $37M from a $27.82M loss on revenues down to $70.48M from $80M.
Adjusted EBITDA was a negative $13.28M from a negative $2.18M on copper production up to 16.14Mlbs from Q2 18’s 15.33Mlbs, but with gold down to 16,488oz from 17,724oz, prompting the company to cut FY/CY18 copper expectations to 77.5Mlbs from 89Mlbs-96Mlbs, but with gold up to 82,700oz from 75,000oz-80,000oz. Revenue from Red Chris fell to $52.7M from $57.3M and Mt Polley to $17.8M from $22.8M.
At Sept 30, 2018, Imperial had $4.8M cash, $9.7M left under the senior credit facility, $10M undrawn on the 2017 LOC loan and a working capital deficiency of $819.7M, including $728.4M of current debt.

Indonesian nickel pig iron producer Nickel Mines will double its production capacity by acquiring up to 80% in 2 additional rotary kiln-electric furnace lines under construction in the Indonesian Morowali Industrial Park in Central Sulawesi.
The Australian-based company has signed a collaboration agreement with its partner Shanghai Decent Investment Group, a subsidiary of Chinese stainless steel producer Tsingshan.
The Ranger Nickel acquisition mirrors the partners’ 80% interest in the 2 RKEF lines of Hengjaya Nickel.
MD Justin Werner says the company is well on its way to becoming a significant nickel producer at a time of favourable global demand.

A $US170M impairment from the continuing 16-month suspension of Tahoe Resources’ Escobal Silver Mine in Guatemala and a 2nd , now resolved, shut-down of the La Arena copper-gold mine in Peru following a local residents invasion, has pushed the company to a 9-months YTD 2018 (YTD18) $212.4M loss from YTD17’s $99.8M profit.
Gold production from its Canada, Guatemala, Peru operations fell to 285,000oz from 340,000oz, with silver plunging to 100,000oz from 9.8Moz, at cash costs produced up to $767oz from $639oz and AISC to $1,156oz from $954oz. Revenue plummeted to $378.9M from 615.8M for an adjusted loss of $41.7M from a $101.7M profit and cash flow from operations falling to $58.4M from $223.3M.
Despite the lower output and with gold production weighted to Q4 18, the company expects to meet the low end of 400,000oz-475,000oz expectations. Tahoe ended Q3 18 with $48.4M cash/equivalents.

West Australian lithium producer Altura has gained more marketing flexibility for its recently commissioned 220,000tpa mine by signing a significant offtake agreement with GFL International, the battery materials producer subsidiary of leading global lithium producer Ganfeng Lithium.
Supply commences this year, reaching at least 70,000tpa from 2019 to end-2021 and with potential extensions for 10 years.
At the same time, Altura has reached agreement with existing offtake partner Shaanxi J&R Optimum Energy halving its commitment to 50,000tpa from 2019.
MD James Brown says the agreements will provide security during JRO’s current restructuring and expand its customer base.