Paladin Dives on Production Struggles

Iron ore & gold tumble, sending the majors plus the goldies downward

November 12, 2024

The Pre-Start

  • Paladin dropped FY25 guidance to 3 - 3.6Mlb (prev. 4 - 4.5Mlb) after weak October numbers on the back of ongoing production challenges as well as water supply disruptions, while also pulling cost guidance (PDN) Stock down 23%

  • Kingsgate provided an update on Chatree, noting improved operating metrics and declaring it will review & consider capital management options (KCN) the only gold producer green on our watchlist today

  • Gold Road now have a ~18.8% stake in Yandal Resources (YRL)

  • EQ Resources hit a monthly production record at its Barruecopardo tungsten mine with recoveries improving (EQR)

  • Awalé Resources hits 59m at 14.7 g/t Au from 143m at its Odienné Project in Côte d'Ivoire (ARIC.V)

  • Thermal coal producer, TerraCom, is unusually marketing itself with an investor presentation up today (TER) an interesting read despite our obvious suspicions

  • Neometals released results from its ELi pilot trial, assessing the production of lithium hydroxide, with an eye now on partnering (NMT)

  • Hastings is in a trading halt to prepare a response to an AFR article (HAS) how about a response to the Money of Mine podcast too? (see 51:15 min mark)

  • Sincerity, the investor behind the 249D at Global Lithium, has popped up as a substantial shareholder of Culpeo (CPO)

  • Numerous companies shared drilling results, including Astral, Lotus & Green Tech Metals

High Grade It

  • Iron ore fell — briefly touching the US$100-a-ton threshold — as Beijing’s latest efforts to revive the economy left investors disappointed (Bloomberg)

  • Why our miners sank on China’s $2.1tn stimulus (West)

  • GEM Co., a Chinese battery-metal producer, and Vale’s Indonesian unit signed an agreement to build a US$1.42b nickel plant in Indonesia (Bloomberg)

  • AWU has sent a warning over Pilbara blue collar “extremism” (BN)

  • Codelco has offered its refined copper output to Chinese clients at a premium of $89/mt for 2025, indicating strong demand (Reuters)

  • The tax dispute that prompted Mali’s military junta to detain three Resolute execs has wiped almost $500m from the gold miner’s market value (AFR)

  • India's Hindalco Industries, posted a better-than-expected second-quarter profit on Monday, helped by higher aluminium prices (Reuters)

  • The nuclear ban is holding Australia back from the data centre opportunity, according to NextDC CEO Craig Scroggie (AFR)

Wheelin’ n Dealin’

  • South32 has agreed to acquire a 19.9% strategic stake in American Eagle at a 15% premium, picking up top-up rights and a board seat at the company which is exploring its NAK copper-gold project in BC (AE.V) Teck who owns >15% pre S32 deal has the right to maintain its pro-rata ownership… juicy! (Mining.com)

  • Wesfarmers and SGH say they aren’t going to acquire for a while, Dataroom rules out a bid for MinRes (Australian)

  • Aurum have a ~26% stake in Mako Gold as part of its takeover offer (AUE)

Rattlin’ the Tin

  • True North Copper is set to emerge from voluntary administration after an emergency equity injection of $50-60 million which will repay Nebari and repair the company’s balance sheet (TNC)

  • St Barbara completed tranche 1 ($33m) with tranche 2 ($67m) needing shareholder approval at their Dec 12 AGM (SBM)

  • Apollo Silver closed a C$13.5m placement, highlighting an investment from Eric Sprott (APGO.T)

Word on the Decline

  • We are hearing that the Denham Capital and Vision Blue-backed Brazillian rare earth producer, Serra Verde, is having its fair share of ramp-up trouble

  • Our intel suggests the private equity groups had to tip in an extra US$150m recently and are now seeking a further US$200m from external sources to ‘debottleneck’ production

  • Serra Verde is the first of the Brazillian ionic clay projects to get developed and the market will be using its success as a barometer for the successful development of Meteoric and Viridis’ projects in the country too - rightly or wrongly

  • Let’s hope additional capital sees the project get to positive cash flow in the near term

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

  • The Curious Tale of Airbus and the African Gold Mine (Bloomberg) A whacky tale involving one of Mali’s biggest gold mines

  • Roland Gotthard discusses a failure of companies to recognise when to walk away from bad projects, and the results of ploughing money in for no reasonable return (LinkedIn article)

  • Dryblower: Trade war risks threaten Aussie mining (MiningNews)

  • It was our sexiest lithium stock. Now it’s having major surgery (AFR’s Chanticleer)

  • How CEO Stuart Tonkin keeps Northern Star golden (West)

  • Exploring an Underground Mine (Aaron Witt YouTube)

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Today’s Top Tweet

Devil’s in the Detail

We had a Money Miner point out to us a seemingly obvious omission from the comps chart in Genesis’ recent investor preso.

Genesis compared their R&R and EV/R&R against a range of peers, specifically those “ASX-listed gold producers with 100% WA production” according to the slide footnote.

Last time we checked, their Leonora neighbour Vault is producing 100% of their FY25 production exclusively from their WA assets, but is nowhere to be seen on these charts?

Also, ~20% of Catalyst’s FY25 production is coming from Henty (based in Tasmania), so how did these guys make the cut and Vault didn’t?

We suppose you don’t want to point out that your rumoured takeover target is cheaper than you are…

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