MinRes Batten Down the Hatches + a US$2.5b Gold Deal

Newmont confirms divestment, Kinross drops Great Bear PEA

September 11, 2024

The Pre-Start

  • MinRes received FIRB approval for the sale of 49% of its Onslow haul road to Morgan Stanley IP. It announced cost reductions in the form of roster changes across its op’s as well as capex savings (MIN)

  • Kinross completed a PEA for Great Bear, targeting annual production of 431koz over a 12-year life at an US$812/oz AISC, after a US$1.42b capex bill. It has an NPV5 of US$1.9b & a 24.3% IRR at US$1,900/oz (K.TSX)

  • Snowline Gold returned a hole with 4.05 g/t Au over 244.9 m from surface at its Rogue project… (SGD.V)

  • Catalyst provided 3-year production guidance while updating its group reserves, as it looks to expand to become 200kozpa producer (CYL)

  • Westgold updated on Western Flanks at Beta Hunt, highlighting similarities with the previously mined Father’s Day Vein (WGX)

  • Deep Yellow updated the Tumas 3 measured resource to 22.5Mlb at 300ppm eU3O8. Total measured & indicated resources at Tumas 1,2 & 3 sit at 102Mlb at 268ppm (DYL)

  • BCI Minerals received Federal environmental approvals for Mardie, enabling operations to commence (BCI)

  • Schroder increased their position in Deterra Royalties to 7.1% (DRR)

  • Sovereign Metals responded to a price query, following its stock falling from 68c to 50c, declaring it was none the wiser as to why (SVM)

  • Rox Resources announced that Phil Wilding will become its new CEO, while Nathan Stoitis also joined the board (RXL)

  • L1 Capital popped up with a substantial notice at MinRes, while BlackRock reduced its holding (MIN, MIN)

High Grade It

  • Morgan Stanley takes a peek at the iron ore cost curve in light of recent pricing pressure (MiningNews)

  • Mineral Resources eyes lithium job cuts via big roster changes for hundreds of workers, & get FIRB tick (West, AFR)

  • Two Global Lithium directors have agreed to quit ahead of a vote seeking to shake-up the board (AFR)

  • Coal India Ltd. is planning to invest about US$8b to build coal-fired power plants close to its mines (Bloomberg)

  • Kazatomprom’s CEO warned that the Russia-Ukraine war is making it harder for it to keep supplying the West (FT)

  • Oil prices slipped as traders tracked moves in wider financial markets, while monitoring a storm in the Gulf of Mexico (Bloomberg)

  • The platinum market is expected to see its biggest annual deficit in at least a decade, but prices have so far been slow to react (Bloomberg)

  • India will formulate a green steel policy and will consider government procurement for decarbonised steel (Reuters)

  • Vancouver-based Solaris is relocating its HQ to Ecuador’s capital, months after Canadian laws saw it scrap a financing deal (Bloomberg)

  • China's iron ore imports in August fell from July while slipping 4.7% from a year earlier (Reuters)

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Wheelin’ n Dealin’

  • AngloGold Ashanti announced a recommended acquisition of Egyptian gold producer Centamin (flagship asset Sukari gold mine) valued at ~US$2.5bn (CEY)

  • Newmont have sold Telfer & 70% Havieron to Greatland Gold for up to US$475m, including US$207.5m cash, US$167.5m in GGP shares & up to US$100m in deferred contingent consideration (NEM, GGP.L) Greatland expects 426koz AuEq produced in the initial 15 months from restart of processing at Telfer

  • AngloGold would be open to selling the Doropo gold project in Côte d’Ivoire should the acquisition of Centamin complete (MiningMx)

  • Fission shareholders voted in favour of the acquisition by Paladin (PDN) scraped in by ~1%!

  • Helix has appointed advisors in response to a proportional off-market takeover offer received from Acta (HLX)

Rattlin’ the Tin

  • To fund the upfront consideration of the acquisition, Greatland Gold is raising £257 million at a 30% discount to the undisturbed price (GGP.L)

  • Arafura raised $4.6m, shy of the $7m in sought via an SPP (ARU)

  • Electra Battery Materials received a non-binding term sheet for a US$20m pre-payment facility, as it looks to raise US$60m (ELBM)

Word on the Decline

  • It’s pretty interesting hearing AngloGold’s CEO Alberto Calderon strumming up the NAV accretion of buying Centamin at a 37% premium on the M&A call… He references CIBC’s dated numbers where AngloGold traded 1.3x NAV and Centamin 0.83x NAV

  • Lets ignore the fact that CIBC doesn’t actually cover Centamin… The market isn’t usually dumb so when discrepancies like this exist, there’s usually a good reason for them

  • We think Calderon’s view is the London exchange listing is a big factor for the discount in Centamin. And he’s probably right. The era of the London-listed mining stock is coming to an end

  • The activists that pushed for BHP’s unification to ASX were vindicated. Rio faced similar pressure earlier this year to abandon London. And one part of Tribeca’s pitch to Glencore was to redomicile its listing abroad too

  • While London-listing discounts persist, activists will either force the hand or corporates will pursue purported “NAV accretive” deals..

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

  • Labor’s derailing the mining engine of Australia’s economic growth (AFR op-ed)

  • China urged to spend up to $1.4tn to battle deflation (FT)

  • Multi-manager hedge funds suffer outflows as investor frenzy fades (FT)

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Today’s Top Tweet

Sibanye Stillwater is copping the same treatment on northern-hemisphere mintwit as MinRes is here down under

Devil’s in the Detail

An interesting observation that a listener to the podcast pointed out to us last night in relation to the Bowen Coking Coal saga discussed briefly yesterday:

Regal who appears to be aggressively selling their stake in Bowen acquired a 50% stake in Taurus last year. Taurus of course is the US$51m senior secured lender to Bowen, and is due a US$13m payment this quarter…

Taurus has had to call in the Receivers twice in recent history - SO4 in 2021 and Galena Mining in April this year. Lets strap in and watch how the BCB story plays out from here shall we…

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