Fortescue's Targets Derailed while MinRes Remain Defiant on Onslow

Silver Lake and Perseus continue to build cash while others stutter

G’day GC #

The Pre-Start

  • Mineral Resources stated Onslow remains on time and on budget, with the haul road sale on track. Mining services, lithium and iron ore performed roughly in line with expectations (MIN)

  • Perseus’s gold production ticked lower while costs inched higher (qoq), leading to marginally lower cash flow of US$119m for the quarter. Cash and bullion ended at US$702m (PRU)

  • Paladin ended March with net debt of US$58m, in a quarter where commercial uranium production recommenced at Langer Heinrich (PDN)

  • Fortescue’s iron ore shipments were 6% lower after being hit by bad weather and a train derailment (FMG)

  • Silver Lake’s cash and bullion position advanced $58m, with a total of $526m held in net cash, bullion and investments (SLR)

  • Chalice has revised its high-grade Resource for Gonneville to 59Mt @ 2g/t 3E and 0.2% of each Ni & Cu. A pre-feasibility study is underway, due for mid-CY25 completion. CHN stated the partnering process is ongoing. Shares traded down 10% (CHN)

  • West African’s gold sales were down 25% with costs up 22%, though actual production wasn’t as severely down. Kiaka is 65% complete, & remains on track (WAF)

High Grade It

  • Gold Road has stayed in its lane and ended its pursuit of a 40% stake in Greenstone Gold Mines following investor pushback (The West)

  • The IEA has issued an EV outlook report, suggesting by 2030 that every second car sold will be electric (AFR)

  • Bad weather and a train derailment on Fortescue’s Pilbara rail network just a day before the end of 2023 battered iron ore exports (The West)

  • China’s surging steel exports are inflaming global trade tensions, with the Asian giant exporting at the highest rate since 2016 (Bloomberg)

  • Rio Tinto & Eramet have submitted plans to develop lithium extraction tech in Chile, along with tenders from 30 companies (Mining.com)

  • Murrin Murrin nickel mine and Wesfarmers Kwinana facility are big beneficiaries of a clean energy funding program, receiving $69m (The West)

  • Anglo-American diamond unit, De Beers, has cut its output goal amid a slow recovery in the market for precious gems (Bloomberg)

  • Gold has pulled back following a rapid journey up, with tensions in the Middle East temporarily subsiding (Reuters)

Gold price 1-year chart

Gold price 1-year chart

  • Kumba Iron Ore reported that sales fell 10% following port equipment challenges, as South African logistical problems continue to throttle commodity exports (Reuters)

  • India is seeking to secure critical mineral resources, with lithium a focus, as it pushes for African & South American exploration while auctioning local tenements (FT)

  • The race for Sweden’s abundant hydroelectricity in the country’s north is experiencing a hiccup as a result of poor transmission infrastructure (FT)

  • The US imports much less Middle Eastern oil than it did during the 2000s, as American shale shelters the country from price surges (FT)

US oil imports

US oil imports

Wheelin’ n Dealin’

  • Emerald has moved to 92% ownership of Bullseye, with the withdrawal rights period now closed (EMR)

Rattlin’ the Tin

  • Santana Minerals hired Bells & Euroz to raise just under $31m in new equity for its NZ gold project (AFR)

In the Weeds

  • Norwegian risk assessment firm DNV has reported that China’s coal consumption will fall by just one-third by 2040, countering the International Energy Agency’s statement that global coal power capacity has to be eliminated by 2040 (Reuters)

  • An IEA Global Electric Vehicle report showed that China accounted for 60% of all EV sales in 2023 (Reuters)

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Devil’s in the Detail

While there were some weather challenges experienced across the gold fields over the March quarter, we do feel there’s somewhat of a disconnect between Northern Star’s Net Mine Cash Flow (revenue less cash operating costs, sustaining & growth capex) of A$160m and its market capitalisation of A$17b

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