Will Rio Raise After $9.9B Bet?

Regis print $85m while Newmont sells Akyem for US$1b to Zijin

October 10, 2024

The Pre-Start

  • Regis produced 95koz for the Q, with cash rising by $85m to $380m (RRL)

  • St Barbara shared an updated PFS for Atlantic, posting a NPV5 of A$468m and IRR of 37% at US$2,000/oz. Initial capex of C$194m would be required to produce 74koz over 11 years (SBM)

  • De Grey satisfied its initial $7m commitment on the Egina exploration property, with $18m now required to be spent to earn 50% (DEG)

  • Meeka Metals new ball mill is en-route with MACA Interquip Mintrex appointed to execute the expansion and restart work (MEK)

  • DRA Global will delist and undertake an off-market buy-back (DRA)

High Grade It

  • Rio Tinto has struck a $9.9b deal with Arcadium Lithium, giving the major control of 5% of global lithium supply (AFR)

  • Rio CEO Jakob Stausholm has not ruled out a share issuance to raise funds for the $9.9b purchase of Arcadium Lithium (AFR)

  • Activist hedge fund Elliott said its long-term thesis on British mining conglomerate Anglo American was “very interesting and very much intact” (FT)

  • Cameco is considering expanding some of its mining projects as global demand for nuclear power rises (Bloomberg)

  • Peak aluminium body wants bauxite, alumina, and aluminium on Australia’s critical minerals list (Australian)

  • Renewable energy to fall short of UN goal to triple by 2030, IEA says (Reuters)

  • DRC’s top mining official said the country is courting new investors for its world-class mineral deposits as it looks to diversify ownership of its mines (Bloomberg)

  • A decision on the reopening of a long-mothballed South West rail link to service WA’s Greenbushes mine has been pushed back into 2025 (West)

  • Why Rio Tinto wants to be a new cornerstone for the lithium sector (AFR’s Chanticleer)

  • Santos JV tied up $1.2b in debt financing for Darwin LNG life extension (CB)

Drill24 Pacifici Finance

Wheelin’ n Dealin’

  • Rio will acquire Arcadium Lithium for US$6.7b, all in cash, paying a 90% premium to LTM’s undisturbed price, with board approval received (RIO) Blackwattle shared their view, encouraging shareholders to vote against (BIP) to which Arcadium chair Peter Coleman took a swipe (West)

  • Newmont agreed to divest Akyem for up to US$1b to Zijin, with US$900m to be received upfront & a conditional US$100m (NEM.NY)

  • MBK Partners won’t raise its bid to gain control of Korea Zinc, the private equity group said (Bloomberg)

  • Novonix and UK's ICoNiChem agreed on a cathode materials partnership (CB)

  • Metals Acquisition Corp is understood to have been looking to buy Portuguese mine Neves-Corvo but has now moved on (Australian)

Rattlin’ the Tin

  • MAC upscaled its raise to A$150m (MAC)

  • Santos closed a new syndicated bank loan facility totalling US$800m (STO)

  • Viridis is in trading halt to raise capital (VMM)

  • American West Metals raised $7m to advance Storm (AW1)

Word on the Decline

  • Regis is an unhedged, 370kozpa Australian gold producer that just added $85 million cash in a quarter, trades near 5-year lows at record gold price yet has an undemanding $1.5B market cap…

  • We reckon the advisers would be busy updating their ‘Takeover Defence’ board papers today…

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

  • Doug Silver on Resource Insider (YouTube) A great listen, ranging from why companies use 5% rates to why royalties aren’t as common in Aus

  • A quick (3-min) history of Billiton, up to the BHP merger (BHP)

  • Copper, Crude, China, Normalization (Arjun Murti’s Super-Spiked)

  • Shall We Repeal The Laws of Economics? (Howard Marks Memo)

  • How Europe’s Big Hope in EV Batteries Came Unstuck (Bloomberg)

  • Why China is hesitant to fire its stimulus bazooka (AFR Chanticleer)

  • Rio Tinto isn’t bagging a bargain with lithium deal (FT)

Were you forwarded this email from someone else?

Today’s Top Tweet

https://x.com/RealRickRule/status/1843982725906329938

Devil’s in the Detail

If you want to bore yourself with the legal mumbo jumbo that is the Rio x Arcadium transaction agreement, you can pry through it here, it’s lodged with the SEC.

Twitter is filled with so many bad takes about an interloper coming into the equation. Sorry, it’s not happening.

And the market agrees - Rio is paying US$5.85 cash in ~12-18 months and the stock is US$5.55 here. It’s not pricing in any uplift from here sorry.

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