Mining Breaks

Global resources investor Cadence has reached a non-binding $US6M agreement to acquire up to 27% interest in the large-scale Amapá openpit iron ore mine in NE Brazil as it heads towards restarting operations in 2021.
The deal with Singapore-based trader Indo Sino also gives it first right of refusal on increasing its interest in JV company Pedra Branca Alliance to 49%.
The mine, idle since mid-2015 following a ground failure, is estimated to have a remaining mine life of 14 years at 5.3Mtpa. Initial revenue is expected to start in the Dec 2019 qtr from the sale of stockpiled iron ore at Santana port.

Australian miner Consolidated Tin Mines has seen its net loss after tax for the Dec half-year (H1FY19) grow to $A20.7M, from its $16.1M loss in the pcp.
Consolidated’s Mt Garnet plant in N Qld processed 79,439t ore for metal in concentrate of 4,080t zinc, 707t lead and 269t copper as it focused on establishing sufficient ore supply from the refurbished Dry River South mine and newly developed Mount Garnet Deeps mine to maintain continuous plant operations.
It expects to achieve steady state production in mid-2019.

Zambia’s High Court has appointed a legal company as provisional liquidator of Vedanta-controlled Konkola Copper Mines, Reuters reports.
Zambian law firm Lungu Simwanza & Co has been appointed to oversee KCM a day after the president said Zambia planned to strip the company of its mining licence and bring in a new investor.
According to a court document, Lungu Simwanza has been appointed to act as provisional liquidator until the conclusion of the hearing of a petition, brought by Zambia’s mining investment arm ZCCM-IH under Zambia’s corporate insolvency act, or a further order. No comment from Vedanta.

Lower commodity prices, particularly for zinc, lead, silver and aluminium, have helped push global natural resources company Vedanta Resources to a $US237M loss for the Mar 2019 year (FY19) from the previous year’s $239M profit.

The reappearance of skill shortages as the Australian mining sector emerges from its long downturn is forecast to create a tug of war as more industry professionals look for salary increases from employers determined not to fuel a new wages boom.
A salaries survey by recruitment firm Hays indicates that, while 88% of employers are prepared to pay more in 2019-20, the majority of them have no intention of agreeing to any more than 3%.

Mining experts today re-entered a coal mine shuttered for more than 8-years after one of New Zealand’s worst industrial disasters killed 29 men, looking to investigate the cause and retrieve the remains of victims, Reuters reports.
A series of blasts ignited by methane gas ripped through the Pike River Mine on the W coast of the South Island in Nov 2010, trapping 31 men, though 2 managed to escape.
Safety concerns prompted the previous govt to rule out re-entry, despite opposition from the families of miners. However, the current minister responsible for the re-entry operation Andrew Little says “New Zealand is not a country where 29 people can die at work without real accountability.” Families of the men who died gathered near the mine entrance as the experts entered.

West Australian developer FYI Resources is on track to become the first ASX-listed company producing high purity alumina from a self-built plant with testwork results expected by end-June following completion of its pilot plant.
FYI says the results will be invaluable to advancing development of its 100%-owned Cadoux kaolin project about 220km NE of Perth, to become a fully integrated, low-risk, low-cost producer of high purity 4N+5N alumina products.

Lithium explorer Lake Resources has appointed international engineer Hatch to provide engineering and design services for its PFS-stage Kachi lithium brine project in the Catamarca province of Argentina.
MD Steve Promnitz says it’s another milestone for the project, which was shown in engineering studies to have potential lowest quartile production costs, 85-90% recoveries and over 25,000mg/litre lithium brine concentrations.
The PFS is evaluating the direct extraction process of Lake’s US-based partner Lilac Solutions as an alternative to traditional evaporation ponds.

NRW Holdings has picked up another significant OEM equipment package for Rio Tinto’s $US2.6B Koodaideri Iron Ore Project in Western Australia’s Pilbara for the supply of 3 large apron feeders, 11 slide gates and 2 belt feeders worth over $A18M.
The new contract comes hard on the heels of another worth over $137M for rail and associated road works, and an earlier $65M bulk earthworks and drainage contract at Koodaideri, awarded in Jan 2019, after completing numerous greenfield and brownfield projects for Rio Tinto since 2002.

Coloured gemstones producer/marketer Gemfields is continuing its campaign against Zambia’s high export duties after achieving record prices in an auction of higher quality rough emeralds from its 75%-owned Kagem mine.
The Singapore auction achieved an average $US71.85 per carat, from $68.03/ct at its previous Kagem auction in Nov 2018.
The Zambian government will claim 15% export duty plus 6% mineral royalty on the sales, an effective 21% turnover tax compared with levies of 2.5% by world No 2 exporter Colombia and 2% by world No 3 Brazil.

Lithium aspirant Bacanora Lithium has done a £22M cash deal with world lithium production major Ganfeng Lithium that will give the Chinese company a 29.99% stake in Bacanora and a 22.5% direct interest in Bacanora’s flagship Sonora Lithium Project in Mexico, with an option to go to 50% of the project.
Ganfeng’s stake in Bacanora will costs £14.4 cash for 57.6M new shares at 25pps, with the project stake costing £7.56M for shares on the same basis.

Australia-based SolGold’s PEA has come up with 4-mine production cases for the $US10.1B-$10.5B, 85%-owned Cascabel Project’s Alpala copper-gold-silver deposit in N Ecuador, producing an estimated average annual 207,000t of copper, 438,000oz gold and 1.4Moz silver in conc over an initial 25-years, based on a 50Mtpa mining scenario.
The study gives the project an NPV8% ranging from $4.1B-$4.5B and an IRR of 24.8%-26.5% at a pre-production capex of $2.4B-$2.8B and total capex of $10.1B-$10.5B over a LoM from 49-66 years, with initial capex payback in 3.5- 3.8 years after commencement of production.

Anglo American Platinum has sacked about half of its 1,300-strong workforce at its 100%-owned Mototolo platinum mine in South Africa’s Limpopo province over an illegal strike by members of the General Industrial Workers Union.
The workers began the strike, unprotected under SA labour laws, on May 12 over changes made to their medical scheme since Amplats took 89% control of the mine last year. The company argues its scheme offers similar benefits to that formerly offered by Glencore.
They were sacked after refusing a request to return to work. They have until May 21 to appeal.
Amplats says the strike has had minimal effect on production at Mototolo, which produced 287,700oz PGM in 2018.

Ariana Resources has overcome a fall in Mar 2019 qtr (Q1 19) gold-silver production to lift gross J/V income from its 50%-owned Kiziltepe open pit operation in Turkey to $10.86M from Q4 18’s $10.6M.
Gold output fell to 7,296oz from 7,517oz, with silver down to 84,109oz from 90,881oz, with operating cash costs jumping to $399oz from $349oz, but an average realised gold price up to $1,311oz from $1,237.5oz. Production was severely limited by pushbacks and unusually wet weather in Q1 19, cutting ore mined from the pit to 26,746t from Q4 18’s 63,759t, and expected to remain restricted during Q2 19 and Q3 19, however, not to impact output significantly.
Kiziltepe is part of the Red Rabbit J/V Ariana has with Proccea Construction.

Rare earths miner/processor Lynas has joined Texan-based processor Blue Line Corporation in an MOU to develop rare earths separation capacity in the US.
The largest producer of rare earth materials outside China, Lynas says the proposed JV would be the only large-scale non-Chinese producer of separated medium and heavy RE products used in permanent magnets, catalytic convertors, catalysts, batteries, electronics, polishing powders and water treatment chemicals.
The JV will focus initially on heavy rare earths including dysprosium and terbium, but may also include light rare earths  such as neodymium, praseodymium and lanthanum.
CEO-MD Amanda Lacaze says the JV over the next 12 months will close a critical supply chain gap for US manufacturers.

Pan African Resources has lifted Mar 2019 9-months (9-months YTD2019) gold production from its continuing South African operations 51.4% on YTD2018 to 123,771oz, with robust performances from the Barberton complex.
Output from the Barberton underground-surface-tailings complex jumped 11.7% to 72,944oz, with the Elikhulu tailings retreatment plant producing 29,881oz of gold sold. 1st gold from the development/equipping of Evander Mines’ 8 Shaft Pillar is flagged for Aug 2019 and expected to contribute an additional 20,000oz-30,000oz pa for 3-years at AISC of $US900oz. FY19 expectations remain at 170,000oz, rising to 185,000oz for FY2020.

World leading diamond miner, Russia-focussed ALROSA, has tripled its Mar 2019 qtr (Q1 19) net profit to RUB24B from R7.9B in Q4 18, largely due to an 18% jump in sales to 10.6M carats, which pushed revenue up 15% to R70B.
The profit was also on the low base of the Q4 2018 net profit due to one-off factors, including impairments, and the 16% growth in EBITDA to R31.4B. Sales exceeded production by 35% due to increased sales of smaller-size diamonds from inventories as polishers restocked early in 2019. Free cash flow jumped 81% to R26B due to a 40% higher operating cash flow and a 45% reduction in capex.
ALROSA’s board has recommended a H2 2018 div of R4.11ps, or R30.3B.

Australian miner Laneway Resources remains confident of establishing a sound financial platform from the current 4-month mining campaign at its 100%-owned Agate Creek gold project 60km W of Kidston in N Qld.
After pouring its first gold mid-month, Agate Creek recovered 2,220oz by end-April from processing 5,012t @ 13.91g/t through Maroon Gold’s Black Jack plant. Recoveries averaged 99%, above expectations.
The Charters Towers plant will toll treat up to 100,000t of Agate Creek ore, with mining continuing for 10-12 weeks.
Laneway says the positive cash-flow will support resource expansion at Agate Creek. It has more funding available to advance its NZ gold assets and Ashford coal project in NSW.

Matsa Resources has done another deal with gold miner AngloGold Ashanti Australia (AGAA) for ore purchase/processing from Matsa’s 100%-owned Red October mine, S of Laverton in Western Australia, to be treated at AGAA’s nearby Sunrise Dam gold mine for up to 5 years.
The terms of the agreement remain confidential, but Matsa says they are based on the previous successful relationship and detailed MOU between the 2. 1st ore delivery is scheduled by the end of June 2019.
The 3.8Mtpa Sunrise Dam mill, about 60km from Red October, has previously processing material from Matsa’s Fortitude and Red Dog gold mines. Red October is expected to produce 10,222oz gold from the mining of 56,673t @ 5.61g/t in its initial 7-month operation, with forecast AISC of $A1,300/oz pointing to a cash surplus of $3.07M.

Red 5 has lifted the bulk mining mineral resource for its King of the Hills (KOTH) Gold Project, in Western Australia’s Eastern Goldfields 65% to 66Mt grading 1.5g/t Au for an estimated 3.11Moz contained gold.
76% of the resource, or 53.1Mt at 1.4g/t Au for 2.35Moz, is in the higher-confidence indicated category, the results underpinning the PFS on a stand-alone mining/2Mtpa-4Mtpa processing KOTH operation and development of the Rainbow and Severn near-mine regional deposits due for completion in the Sept 2019 qtr.
The new resource includes open pit an open pit indicated/inferred 48.5Mt @ 1.3g/t Au for 2Moz, using a 0.4g/t cut, and an underground indicated/inferred 17.5Mt @ 2g/t Au for 1.11Moz, using a 1g/t Au cut.