Mining Breaks

Leading Australian engineer Monadelphous has won a major construction contract on BHP Iron Ore’s $US3.4B South Flank development project in the WA Pilbara region.
Monadelphous will start work immediately on the $A108M structural, mechanical, piping and electrical and instrumentation works associated with the outflow infrastructure at the under-development 80Mtpa mine. Contract completion is scheduled by May 2021.
MD Rob Velletri says the contract award is another demonstration of its strong. long-term relationship with one of its core customers over more than 20 years.

Australian coal miner New Hope has begun work to integrate the Bengalla mine in NSW’s Hunter Valley into its wider operations following its Dec 1 acquisition of the 40% interest of Wesfarmers Resources.
New Hope’s binding commitment to acquire the 10% of Japan’s Mitsui, subject to pre-emptive rights, will give it 80% - also effective from Dec 1.
Its move to 70% majority ownership lifted its interest in Bengalla production to 2.359Mt for the 6 months to end-Jan (H1FY19), from 1.92Mt a year earlier.
Production from its 100%-owned Qld mines slipped to 2.3Mt (H1FY18: 2.53Mt), delivering total saleable coal output to 4.66Mt (4.45Mt).

Aus Tin has made a step towards the transition of plant feed from low-grade stockpiles to high-grade fresh mine material after extracting the 430t first mining block at its Granville East tin mine near Zeehan in Tasmania.
CEO Peter Williams says it’s a major milestone as the Australian miner transitions to Level 2 operations at higher feed grade and concentrate production, with the aim of expanding operations and extending the mine life.
He says grade control drilling across the first block averaged 2.1% Sn, more typical of underground mines.
Tin concentrate sales are scheduled to resume in the current qtr.

Despite power utility infrastructure/supply issues and drought conditions, Sylvania Platinum has maintained steady 4E and 6E PGM production from its Sylvania Dump Operations (SDO) in South Africa’s Bushveld to lift Dec 2018 half (H1 19) net profit 29% to $US6.95M on H1 18.
The result was on revenue up 14% to $32.1M, group EBITDA 19% better to $12.3M and net cash inflow from operations up to $11.92M from $7.14M. Total 4E PGM output was steady at 34,045oz and 6E PGM up 1% to 45,727oz, but with group 4E cash costs up 10% to $577oz, 6E cash costs up 9% to $430oz, 4E AISC up 11% to $590oz and 4E AIC up 9% 4E 692oz.
The company finished H1 19 with $20.2M cash from H1 18’s $12.6M and declared a maiden 0.35p per share dividend.

A 10% jump in diamond production from its 3 South African underground mines and 1 open cut in Tanzania of 2.02M carats, has seen Petra Diamonds cut its Dec 2018 half (H1 19) net loss after tax to $US57.9M from H1 18’s $117.7M loss.
Sales were up 15% to 1.73Mcts for revenue to $207.1M from $191.8M and cash from operations up to $62.8M from $38.9M, but with adjusted EBITDA sliding to $75.6M from $80.8M for an adjusted net loss after tax down to $4.5M from a $7.2M profit. Petra has also had to wear losses on discontinued operations relating to the KEM JV and Helam operations, both in S Africa, of $39.7M, but is holding to FY/CY19 expectations of 3.8Mcts-4Mcts.
The company finished H1 19 with $90.7M cash, net debt of $559.3M and unrestricted cash/bank facilities of $181.3M.

NCZ has lined up working capital debt facilities up to $A100M to support the ramp up of its hydraulic mining of tailings and preparations for further expansion of its Century zinc mine in N Qld, Australia.
Leading global investment firm Värde Partners has agreed to $60M secured, available senior debt and a conditional $40M unsecured facility.
NCZ says it was prudent to secure additional working capital to complement growing cash-flow from concentrate shipments as Century increases its hydraulic mining rate towards 8-10Mtpa by end-March.
Phase 2 at Century aims to lift mining rate to 15Mtpa.

Australian miner Heron Resources says it will seek damages from processing and infrastructure contractor Sedgman after rejecting a claim for $A49.9M additional costs on construction of its Woodlawn zinc-copper project in NSW.
Heron has agreed to pay Sedgman $0.2M for minor works on top of the $109M guaranteed maximum price EPC contract, but says the contractor’s additional claims have no merit, are time-barred or predate the contract.
While it’s still confident of starting production at Woodlawn in the current qtr, Heron says it will claim liquidated damages against Sedgman for late completion. Heron holds $10.8M in Sedgman bank guarantees.

West Australian miner Matsa expects to deliver first ore in April after giving the go-ahead for decline preparation and other site activities at its 100%-owned Red October gold mine south of Laverton.
Matsa has yet to finalise toll treatment/ore sale discussions, but expects that will be done before ore production starts.
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 $3.075M.
The company says there’s also strong potential to expand it into a substantial long-term mining operation.

Rising iron ore prices have Australian miner Venture Minerals reviewing options to reopen its Riley DSO mine in Tasmania, over 4 years after placing it on care and maintenance.
MD Andrew Radonjic says the 62% Fe price of $US87.6/t at Feb 15, and likely impact of Vale’s supply problems, create the opportunity to begin production at relatively short notice.
Riley’s surface deposit holds reserves of 1.8Mt @ 57% Fe. The project is fully permitted and retains about 90% of its previously purchased equipment.
The review will be conducted alongside an updated scoping study on its neighbouring Mount Lindsay tin-tungsten project due within weeks.

Ten days after declaring its dispute with JV partner Broken Hill Prospecting over the Thackaringa cobalt project would be decided by an independent expert, Australian explorer Cobalt Blue has changed tack again by unilaterally declaring itself the 100% holder of the potential world class mine near Broken Hill in NSW.
COB claims BPL’s refusal to fund its share of costs on exploration work it considers unnecessary has reduced its interest from 30% to below the minimum 5%.
It’s now calling on BPL to surrender its JV documents and pay transfer costs.

New mineral sands producer Image Resources is targeting CY2019 production of 220,000-240,000t heavy mineral concentrates following the successful fast-tracked construction and commissioning of its Boonanarring project in Western Australia.
MD Patrick Munz says the project 80km N of Perth has beaten expectations in all key categories since it began a scheduled 6-month production ramp-up on Dec 1, 2018.
Forecast CY2019 costs are $A385-420/t and revenue $125-142M, generating predicted EBITDA of $40-50M.
Mutz attributes much of Boonanarring’s success to the fundamental metallurgical characteristics of its coarse-grained mineralisation.

Australian-based mining equipment, technology and services provider Imdex has ridden a measured increase in global minerals market activity for its significant improvement in the Dec half-year (H1FY19).
NPAT rose 27% to $A13.5M (H1FY18: $10.6M) on total revenue of $125M ($104.7M). EBITDA rose to $25.2M ($20.1M).
MD Bernie Ridgeway says the improving quality and benefits of its rental instrumentation, which generally command higher rates, helped drive the company’s strong first-half.

START THE WEEK: WHAT YOU NEED TO KNOW
Brazilian police have arrested eight people while the threat of further tailings dam collapses has seen more local residents evacuated from their homes following the disaster at Vale’s Feijão operation three weeks ago.
The arrests and 14 search warrants targeted employees of Vale – among them two senior executives responsible for geotechnical issues - as well as international geotechnics company TÜV SÜD responsible for certifying the dam was stable ahead of the collapse, Reuters reported.
They followed the arrest last month of five Vale and TÜV SÜD employees, subsequently released on a higher court order.
As well the mounting costs of lost production, public penalties and the costs of remediation and community support programs it has established, the company has lost over $US15B - nearly a fifth of its market capitalisation – since the tragedy.

YOU MAY HAVE MISSED
(Note that some of the following articles can be accessed only by subscribers)

• NEWCREST STARTS AGAIN WITH REVISED PLANNING SCENARIO FOR FIJI’S GIANT NAMOSI DEPOSIT 
• CADIA GROWTH DRIVES NEWCREST H1 PROFIT JUMP 
• PRETIUM 1ST FULL YEAR FY18 $36.6M PROFIT TRIUMPH 
• BARRICK HERALDS NEW ERA WITH $3B REVERSAL TO FY18 $1.54B LOSS 
• GOLD FIELDS LOOKS TO A DECADE AT 2Mtpa 
• ASANKO GOLD AND GHANA GOLD J/V SUFFER FY 18 LOSSES 
• GOLDCORP $10B NEWMONT TAKEOVER COMES WITH $4.8B IMPAIRMENT CHARGE
   
• DATADIGGING – THE LATEST FULL YEAR RESULTS

COMMODITIES
LME ($US), Feb 15 –
Aluminium 1,828.50
Copper 6,190.00
Zinc 2,641.00
Nickel 12,100.00
Lead 2,068.00
Tin 21,085.00
Cobalt 31,000.00
Gold 1,319.00

COMEX ($US), Feb 15 -
Gold 1,325.00
Copper 2.815
Silver 15.755

NYMEX ($US) 62% Fe CFR China, Feb 15 -
Iron ore 88.56 

LBMA price data ($US), pm Feb 15 –
Platinum 788.00
Palladium 1,437.00

CALENDAR
Public holidays –
Feb 17: Revolution Day (Libya)
Feb 18: Presidents' Day (regional USA)
Feb 18: Family Day (regional Canada)
Feb 19: Maghi Purnima (Bangladesh)
Feb 19: Meak Bochea Day (Cambodia)
Feb 19: Lantern Festival (China)
Feb 19: Guru Ravidas Jayanti (India)
Feb 19: Constantin Brancusi Day (Romania)
Feb 19: Navam Full Moon Poya Day (Sri Lanka)
Feb 19: Lantern Festival (Taiwan)
Feb 19: Makha Bucha (Thailand)
Feb 21: Language Martyrs' Day (Bangladesh)
Feb 21: King Harald V Day (Norway)
Feb 21: National Youth Day (Zimbabwe)
Feb 22: Yukon Heritage Day (Yukon, Canada}
Feb 23: Defender of the Fatherland Day (Russian Federation, Kyrgyzstan, Belarus)
Feb 23: Republic Day (Guyana)

Conferences –
Feb 18-20: SIMFE 2019, Khartoum (Sudan)
Feb 19-21: RIU Explorers Conference, Perth (Australia)

Companies –
Feb 18: Anglo American Platinum FY, Johannesburg (S.Africa)
Feb 20: Western Areas HY, Perth (Australia)
Feb 20: Glencore preliminary final, Baar (Switzerland)
Feb 21: Sibanye-Stillwater FY, Johannesburg (S.Africa)
Feb 21: Newmont FY, New York (USA)
Feb 22: Orocobre HY, Brisbane (Australia)

Liberia will observe a day of mourning on Feb 18 for more than 40 people who died in a mudslide at an alleged illegal mine in the country’s north.
The search for survivors is continuing but the national disaster management agency says the inaccessibility of the region has impeded the delivery of the necessary equipment following the event last weekend.
Bloomberg reports President George Weah has declared a national disaster zone and ordered authorities to improve security and prevent illicit mining.

At least 22 illegal gold-miners have died and as many as 40 more are still missing after rain flooded a series of artisanal underground shafts at the settlement of Battlefields, about 175km SW of the Zimbabwe capital Harare.
Local news service New Zimbabwe says rescuers have rescued eight of about 70 miners who were caught by the flooding on  Tuesday.
Zimbabwe Miners Federation CEO Henrietta Rushwaya says at least 22 bodies have been identified in the shafts and tunnels, but there were still hopes of rescuing more.
ZMF registered over 40,000 small-scale miners three years ago.

The plight of Brazilian mining giant Vale continues to worsen, with concerns over the safety of another mine tailings dam resulting in the evacuation of about 200 people in the Macacos region 25km from the Minas Gerais state capital Belo Horizonte.
Vale says the Saturday evening order to remove people in an area that contains 49 homes and commercial buildings downstream from the B3/B4 dam at the Mar Azul iron ore mine in Nova Lima is a precautionary measure after reviewing data from specialists.
Since the Jan 25 disaster that has cost over 300 lives at its Feijão operation, Vale has declared emergency situations at two more of its Minas Gerais mines and has been ordered to shut down a third.

The dispute between Russian miner Nornickel and Botswana's BCL Group over a failed 2014 transaction should be decided in the London Court of International Arbitration, the Botswana Court of Appeal has ruled.
The court ruling follows Nornickel's December 2018 decision to terminate the $US337M sale of a 50% stake in the Nkomati nickel and chrome mine in South Africa over alleged "serious and persistent breaches" of the agreement by BCL.
Nornickel has also accused Botswana govt ministers of taking deliberate steps to block its rights.
Michael Marriott, Nornickel’s chief executive Africa, says the LCIA will determine the outcome of the transaction and assess damages to be paid by BCL.

UK miner Strategic Minerals has trebled the estimate of contained metal and underlined the potential of its Redmoor tin-tungsten project in SE Cornwall after achieving strong results in its 2018 drilling program.
Inferred resources at Redmoor calculated by Geologica UK are now 11.7Mt @ 1.17% for 137,000t tin-equivalent.
Exec director Peter Wale says the resource adds confidence to SML and its 50% JV partner New Age Exploration in their aim to restart mining at Redmoor.
Orebody geometry appears amenable to underground mining. The resource remains open at depth over much of its length and is open to the west.

UK-based Centamin has increased the mineral resource at the Doropo project in Côte d'Ivoire by 58% to 2.93Moz gold – 50Mt @ 1.31g/t indicated and 19Mt @ 1.3g/t inferred. CEO Andrew Pardey says Doropo to demonstrating the potential to be its next organic development project.
At the ABC project, the company has declared a maiden resource estimate at Kona South prospect of 1.1Moz – 19.6Mt @ 1.03g/t indicated and 16.1Mt @ p0.87g/t inferred.
The Kona South resource is defined from surface along a 2.3km strike, and remains open in all directions.

Pretium Resources’ high-grade underground Brucejack Mine in Canada’s N British Columbia has generated almost $US200M cash and produced 376,012oz of gold in its Dec 2018 1st full year of production and heading for 390,000oz-420,000oz in FY/CY19. The result, a net profit of $36.62M.