Barrick Threatens to Walk from Mali

Disgruntled Arcadium shareholders sue the company, Westgold runs Fortnum expansion numbers

December 17, 2024

The Pre-Start

  • Barrick announced it has been unsuccessful in finding resolutions with the Malian gov’t, and threatened that a continuation of the status quo would result in operations being suspended (GOLD.NY)

  • Westgold shared a Fortnum expansion study, identifying a 10-year mine life, mining 1.13Moz @ 2.7g/t, on an expanded 1.5Mtpa plant. NPV8 of $306m (@ $3,500/oz) with pre-production capital put at $148m - $306m (WGX)

  • Burgundy completed two sales cycles, netting an average price of US$80/ct and US$106/ct (US$47m & US$46m respective totals) (BDM)

  • Lindian acknowledged it received a 249D notice from Kabunga Holdings, requesting that directors Blake Steele & Park Wei be removed, with Warwick Grigor to be appointed (LIN) oof

  • MLG secured $80m in contracts with work at Evolution’s Mungari and Norton’s Paddington operations (MLG)

  • Medallion released a scoping study on the processing of Ravesthrope gold at Forrestania, with $73m in pre-production capital required to return a pre-tax NPV10 of $329m (129% IRR) using US$2,350/oz gold (MM8)

  • Pantoro announced the completion of a mining agreement with the Ngadju Native Title Aboriginal Corporation for its Norseman gold project (PNR)

  • AlphaHPA reached contractual close for its senior debt funding, being $400m from NAIF and EFA (A4N)

  • Victory Metals signed a non-binding MoU with Sumitomo for potential offtake from Victory’s North Stanmore HRE project (VTM)

  • Firewood Metals was awarded up to C$35m in joint US-Canadian govt funding to advance the Mactung tungsten project and develop infrastructure (FWZ.T)

  • Andean Silver shared drill results from Cristal & Pegaso 7, including an intercept of 13.1m @ 332g/t AgEq (ASL)

  • Australian Pacific Coal submitted its MOD8 application, seeking to extend operations until Dec 2033 (AQC)

  • Focus Minerals entered into a mining services agreement with Barminco to commence development of their Bonnie Value underground mine (FML)

  • Firefly Metals commenced trading on the TSX (FFM)

  • Assore International increased its stake in Atlantic Lithium to ~30.6% as part of their participation in the recent placement (A11)

High Grade It

  • Three disgruntled Arcadium shareholders have sued the company & its board, accusing them of negligently leaving money on the table in the Rio deal (AFR)

  • Argentina’s mining chamber said it has the potential to triple or quadruple its mining exports to $14-16b a year (MiningNews)

  • Law firm Allens predicted a wave of dealmaking in the critical minerals next year on the back of lower borrowing costs & higher demand for commodities (AFR)

  • EPA seeks comment on BHP’s Mount Whaleback expansion, with the proposal open in a seven-day comment period (MiningNews)

  • Barrick threatened to suspend Mali operations in stand-off with government (FT)

  • UBS lowered its outlook for uranium over the next two years, citing lacklustre buyer interest (AFR)

  • BHP paused operations at two iron ore mines in the Pilbara on Saturday after heavy rains, with operations now resuming (Reuters)

  • NSW’s two largest coal power stations are running at reduced capacity just as energy demand is expected to surge, with fresh issues surfacing (Australian)

  • Australia has felt the ripple effect of a weaker Chinese economy as it’s set to cut A$8.5bn from its budget estimates (FT)

  • Chevron CEO Mike Wirth said he’s a fan of small modular nuclear reactors and suggested there could be a role for the company to play in the future (Fortune)

  • Treasurer Jim Chalmers is optimistic about the future of WA’s resources sector despite flagging a $100b write-down in forecast exports (West, MiningNews)

  • Codelco to maintain its strong investment rhythm, with plans to invest >$33b through 2033 (MiningNews)

  • Miners will declare there is “absolutely no mandate” for a ban on nuclear, warning no evidence has been presented to a Labor-led inquiry (Australian)

  • Nuclear power is forecast to be the cheapest baseload electricity source in Japan in 2040, highlighting its desire to restart the nation’s idled reactors (Bloomberg)

We keep hearing that Cape Town in February is the best place in the world to be. What makes it even better? INDABA. We will see you there!

Wheelin’ n Dealin’

  • Doré Copper shareholders approved the merger with Cygnus, with the deal on track to complete by Dec 31 (CY5)

  • Debt-ridden Hummingbird Resources has been sold to Nioko Resources in $17.5m cash deal (Mining.com, HUM.AIM) …how’s this for a quote from the CEO: “Hummingbird requires a very material amount in equity financing to address the significant issues facing the business as a whole…” 

  • Southern Cross Gold received FIRB approval to complete its land deal with Sparr (SXG)

  • Private Peruvian company Alpayana said it would bypass Sierra Metals board and make a direct, all-cash offer of 85c/share to (SMT.T)

  • Classic Minerals agreed to sell Kat Gap for $7m to Bain Global Resources (CLZ) if you want to become particularly cynical about the state of junior mining then you should count how many share consolidations CLZ has done in recent years

Rattlin’ the Tin

  • Geopacific Resources is in a trading halt to raise cash (GPR)

  • Aura Energy completed a $9m raising to advance the Tiris uranium project, cornerstoned by Satchem Cove committing $6.5m (AEE)

  • Aurumin terminated their at-the-market-facility, with collateralized shares returned (AUN)

Word on the Decline

  • After a relatively active period for Rio Tinto in Argentina (Rincon funding, Arcadium acquisition), eyes are on their move with Entree Resources who has played a brilliant hand in value-maximisation with their minority interest in a select claim at Oyu Tolgoi

  • But the other target we are monitoring for Rio to eventually move on is $456m Sovereign Metals where Rio has a 19.9% shareholding in the company advancing their Kasiya project in Malawi

  • We suspect the pressure to do a deal with Entree and the Mongolian government to be heating up

Do you have some Word on the Decline? Reply to this email or shoot a message to [email protected] directly. We will always take your privacy seriously.

In the Weeds

  • Norway campaigns to cut energy links to Europe as power price soar (FT)

  • HopgoodGanim released the penultimate part of their Aussie takeover defence series, focusing on defence tactics and frustrating actions (HG)

  • Dryblower on Fortescue’s lost decade: it’s time to measure the true cost of chasing a hydrogen dream (MiningNews)

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Today’s Top Tweet

Devil’s in the Detail

The clock has officially started ticking on MAC Copper’s first contingent consideration payment.

As a refresher, as part of MAC Copper’s original acquisition of the CSA copper mine from Glencore there are two contingent payments to Glencore of up to US$150m (in aggregate) depending on the average daily LME closing copper price over various tenors.

The contingent payment terms

The TLDR version for the first contingent payment is if the average daily LME closing copper price exceeds US$4.25/lb for any rolling 18-month period, MAC Copper will be required to pay Glencore US$75m. This first trigger can be officially tested from yesterday onwards.

Last time we checked, the average copper price from the last 18 months is sitting ~US$4.01/lb, about 6% below the first trigger price.

One to keep an eye on as we come into the new year, particularly if copper starts to rip.

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