Sandfire Stumble on Paste Problems, IGO Production Drops 22%

BHP & Vale offer $38b to settle Samerco Disaster, Ranvesthorpe goes on care & maintenance

April 30, 2024

G’day GC #

The Pre-Start

  • Sandfire released a total of 3 announcements in an attempt to deflect from a paste pipe blockage at MATSA (deferring higher grade material into Q4). Copper production was up, due to activity being shifted to a copper-only zone and hence zinc production was down (SFR)

  • Metals Acquisition produced 8.7kt of copper at CSA, down 11% qoq. Lower production was driven by a power outage and lower grades being mined from the East and West deposits (MAC). Tough work mining at 1800m in Aus, with capital development down 44% due to more rehab and increased ground support.

  • IGO ended March with $276m, receiving $25m from TLEA in the quarter. Spodumene production was down 22% to 280kt (IGO). 200kt of spod-con being sold to Tianqi post quarter end ($314m revenue on previous quarter prices). Cosmos still cost $70m while ramping down into care and maintenance.

  • Aeris Resources closed the quarter with $19m in cash, down from $23m, with $40m in debt. Operations produced $29m, with $32m in investing and financing outflows (AIS)

  • Jupiter Mines saw lower production and higher costs, while earnings ticked up (EBITDA $16m) as sales remained flat. Realised prices were relatively unchanged qoq, though the company reported that Mn prices rose 29% month-on-month in April (JMS)

  • Syrah continued their hot streak of never making money, again. Operating cash outflows were US$17 million (SYR)

High Grade It

  • Liontown inched closer to production at Kathleen Valley, with investors focused on the drawdown of the revised $550m debt facility (The West)

  • BHP investors are fearing a costly second tilt at Anglo American, warning the company not to lob a “value destructive” bid (AFR)

  • BHP, Vale offer offer $38b to settle Samerco dam disaster claims (AFR)

  • First Quantum Minerals Ravensthorpe mine will be put on care and maintenance, with 530 jobs to be lost (The West)

  • WA Premier Roger Cook is expecting the owners of Ravensthorpe, soon to be placed in care & maintenance, to re-boot the operation on a price recovery (The West)

  • Ardea Resources has signed a cooperation agreement with Japanese partners following a price query from the regulator (The West)

  • Battery maker SK Innovation saw earnings top forecasts, despite commenting that it saw drops in EV battery shipments in Q1 (Reuters)

  • Indonesian coal company Harum Energy is looking to buy more nickel mines as it ceases further investment in fossil fuels (Bloomberg)

  • Vedanta has approached trading houses to raise capital to revive the Konkola copper mining & smelting complex in Zambia (Bloomberg)

  • Zinc surged 3.6% and copper remained over US$10,000, while tin, lead and nickel all ticked up marginally (MiningNews.net)

Wheelin’ n Dealin’

  • Tietto’s Board has changed their mind, they are now recommending shareholders accept Zhaojin’s takeover offer at 68 cents (TIE)

  • Brightstar and Linden Gold have both lodged their Bidders’ Statement and Target’s Statements respectively (BTR)

  • PRM, the entity connected with Gerald Group CEO, Craig Dean, has elected to extend their takeover offer of Sierra Rutile - the best part is, there’s a phone line again (SRX)

    We’re excited like it’s Leonora all over again

Rattlin’ the Tin

  • Predictive Discovery raising $45m (possible for an extra $5m) at $0.19, a 9.5% discount to last close.

  • West African gold play Turaco launched a $16m capital raising yesterday (AFR)

  • Metro Mining is in a trading halt raising $40m at 4.1c, looking to take advantage of a buoyant bauxite market & improved performance (MMI)

  • Ioneer received gross proceeds of US$25m via a placement (INR)

  • Mitre Mining raising $8m for silver/gold exploration in Chile (MMC)

Word on the Decline

  • In yesterday’s show we talked about the Japanese trading outfits, Mitsui and Sumitomo, forming a consortium to farm into Ardea’s nickel laterite project near Kalgoorlie. We heard whispers a few weeks ago that Japanese groups were running the ruler over Chalice’s Gonneville. While this rumour predated the recent resource update, we’ll be watching closely to see if anything actually eventuates here.

  • And if it does, we need to do some work understanding what the heck is going on with the Japanese. Surely they know how to run a sensitivity analysis at spot prices, right? What are we missing here?

In the Weeds

  • While South African politicians may have stymied Anglo American’s potential for years by failing to deliver basic infrastructure, they may be able to go one further by preventing shareholders from bearing the rewards of a takeover (AFR)

  • BYD missed quarterly revenue expectations as heavy discounting took its toll. EV and Hybrid sales were up 14%, selling 620k units (Bloomberg)

Were you forwarded this email from someone else?

Today’s Top Tweet

Devil’s in the Detail

We remember just nine months ago, shareholders of gold producer Pantoro were asked to approve the issue of 52 million performance rights to the Managing Director.

The gold developer’s ramp-up woes saw its share price shed 78% in the 18 months prior to that. It appeared to us that shareholders were not impressed by the gesture when the resolution was withdrawn a week before the meeting. Aftermarket yesterday, a similar resolution appeared to be put to shareholders for a meeting next month.

At least this time around the milestones do appear to reflect actual indicators of performance! Lets see if shareholders will have mercy. The real shareholder alignment might come from the Change of Control clause at the end of the day...

Disclaimer

All information in this newsletter is for education and entertainment purposes only and is of general nature only. The hosts of Money of Mine are not financial professionals. Money of Mine are not aware of your personal financial circumstances. Before making any investment decision, you should consult a licensed financial, legal or tax professional, along with considering any relevant Product Disclosure Statement. Money of Mine does not operate under an Australian financial services licence and relies on the exemption available under the Corporations Act 2001 (Cth) in respect of any information or advice given. Money of Mine strives to ensure the accuracy and currency of the information contained in this newsletter but we do not make any representation or warranty that it is accurate, reliable or up to date. Any views expressed by the hosts of Money of Mine are their opinion only and may contain forward looking statements that may not eventuate. Money of Mine will not accept any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of information in this newsletter.

Reply

or to participate.