Industry NEWS

22 July 2019

Barrick Gold and Acacia Mining reach buyout deal

Barrick Gold has signed an agreement to acquire a stake in Acacia Mining not currently owned by the company.

The acquisition is intended to be implemented by means of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act.

Under the terms of the deal, Barrick will swap 0.168 of a Barrick share for each share of Acacia in a transaction that values the company at about €951m.

Barrick currently owns 262,246,950 Acacia shares, representing approximately 63.9% of the issued ordinary share capital of Acacia.

The deal represents a premium of 24.2% to Acacia’s closing stock price as of 18 July.

The exploration properties of Acacia are located in the Republic of Tanzania, the Republic of Kenya, the Republic of Mali, and Burkina Faso, including the excluded assets, for which sale processes have already been started by Acacia and are currently in-progress.

Acacia acting CEO Peter Geleta was quoted by Bloomberg as saying: “Given all the circumstances, this is possibly the best outcome.”

Last month, Acacia responded to majority shareholder Barrick’s valuation of the company, disagreeing with the exchange rate of 0.153 Barrick shares for each ordinary share of Acacia.

Barrick’s proposal values Acacia at $979m following an increase of 27% in Barrick shares, compared with $787m when it first proposed the deal in May.

In February, Barrick and the Government of Tanzania arrived at a proposal to settle outstanding disputes between Acacia and the government.

Last week, Acacia said Tanzania ordered the company to stop using a tailings storage facility at its North Mara Tailings Storage Facility (TSF) due to seepage from the TSF.

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22 July 19

Yamana reports positive results for Agua Rica copper project

Canadian miner Yamana Gold has reported positive results of the pre-feasibility study (PFS) on the Agua Rica project located in the Catamarca Province of Argentina.

The PFS highlighted a 21% increase in proven and probable copper mineral reserves since the end of last year to 11.8 billion pounds, while gold mineral reserves increased by 12% to 7.4 million ounces.

Annual production for the first ten full years also rose to 533 million pounds of copper equivalent production.

According to the company, the initial capital cost, estimated at $2.4bn, realises significant synergies from using the infrastructure and facilities of Alumbrera, a joint venture (JV) with Glencore and Newmont Goldcorp.

This March, Yamana Gold, Glencore and Goldcorp signed an agreement to develop and operate the Agua Rica project using the infrastructure and facilities of Minera’s Alumbrera mine.

Yamana said in a statement: “This unique and innovative project will serve to position Catamarca as a focal point for development in northwestern Argentina.”

Agua Rica is a large-scale copper, gold, silver, and molybdenum deposit and is located 25km north of Andalgalá.

Proven and probable mineral reserves of the project include 11.8Blb of copper and 7.4Moz of gold contained in 1.104Mt of ore.

Mineral resources include 260,000t of measured and indicated mineral resources, with more than 1.6Blb and 954,000oz of gold.

Inferred mineral resources of 743,000t also represent significant potential to further increase mineral reserves and life of mine.

Yamana added: “Preliminary evaluations have indicated the potential for significant upside to the project economics from increases to throughput with existing mineral reserves to 115,000t/d, which would improve NPV to over $145m and require only a marginal increase to initial capital.”

As per the PFS of the project, the Agua Rica deposit will be mined through a conventional high tonnage truck and shovel open pit operation.

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19 July 2019

Twin Metals to use dry stack tailings at copper-nickel mine

Twin Metals Minnesota is set to use a more environmentally friendly dry stack method for storage of leftover rock from its planned underground copper-nickel mine.

The mine will be located nine miles south-east of Ely, Minnesota, US.

Twin Metals noted that the dry stack tailings storage method eliminates the use of storage pond and dam associated with conventional tailings facilities.

The method has been successfully implemented in four mines in the northern US and Canada, which have similar climates to Minnesota. It is also permitted to be used at two mines in the western US.

In a mine, tailings are the crushed rock left over after the extraction of target minerals.

Using the dry stack method, remaining tailings will be compressed into low-moisture, sand-like deposits and stored on a lined ground facility near the plant site, said Twin Metals.

Reclamation of the tailing site is expected to occur in phases and can be covered with natural vegetation.

Twin Metals Minnesota CEO Kelly Osborne said: “Dry stack tailing storage is the most environmentally friendly tailings management approach for our site.

“The first key is that there’s no dam, no risk of dam failure. The moisture content of the filtered tailings is reduced to a material that we can compact and manage seasonally.

“Dry stack is one of the ways we are making a 21st-century mine that will be the most technologically advanced mine in Minnesota’s history and a model of how copper mining can be done safely and sustainably.”

Extensive testing over the past decade shows that tailings from the company’s Maturi Deposit will be non-acid-generating.

Dry stack tailings storage method has been an option under consideration since the company began mine planning in 2010 to develop the project.

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13 June 2019

Vale to compensate victims of Brumadinho mining disaster

Brazilian mining company Vale has agreed to pay compensation to the families of the victims of the Brumadinho iron ore mine disaster of January 2019.

The company has agreed to pay out $107m in collective moral damages and $186,000 to the relatives of each of the the 300 people killed by the disaster.

Vale said in a statement that it “reaffirms its total commitment to the prompt and fair reparation of damages caused to the families, to the infrastructure of communities and to the environment.”

However, the families of the victims told the Guardian that they hoped that the ongoing criminal investigation would lead to prosecutions.

A Brazilian senate committee recently stated that Vale CEO Fábio Schvartsman and CFO Luciano Siani Pires should be charged with murder. It also said that Vale and dam auditor TÜV SÜD should be charged for environmental damage and corporate responsibility.

The Brumadinho mining disaster

The Brumadinho mining disaster occurred on 25 January 2019 when a dam located near the Córrego do Feijão iron mine collapsed, causing a mudslide to hit the town of Brumadinho.

It was later reported that Vale had been aware of the potential of the dam to collapse from October 2018. According to this report, the dam was in the “attention zone” and “all prevention and mitigation controls” should be applied to it. It was allegedly estimated that there was a one in 5,000 chance of the dam collapsing, twice the maximum risk level normally allowed.

However Vale denied this, stating that the dam had passed an independent audit in September 2018 and it had implemented 17 suggestions improvements on the dam. The company was eventually deemed responsible for the accident and ordered to pay damages by the Minas Gerais State Court earlier this month.

The Institute of Materials, Minerals and Mining (IOM3) spokesperson said: “‘With the deeply regretted loss of life, the mining industry needs to respect those that have been affected, taking time to consider all aspects of construction, operation and maintenance of dams, the engineering standards applied together with the competency of application.

“This is not a new technology and techniques for the processing of materials have evolved for as long as the industry has existed. The welfare of all concerned warrants a co-ordinated approach combining academic and industrial resources to carry out this review.”

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18 July 2019

NMDC to resume iron ore production at Donimalai mine

Indian state-controlled iron ore mining company National Mineral Development (NMDC) is set to resume operations at its Donimalai mine.

The restarting follows the directive of the High Court of Karnataka, India, and comes after the mine was closed for more than eight months.

The company has approached the Government of Karnataka to help with the lease deed execution and production restart at the mine.

According to the company, the mining resumption at Donimalai would avoid further loss to national and state exchequer.

NMDC chairman and managing director Baijendra Kumar said: “Though it had been a long wait for NMDC, this news has brought in lot of cheers especially to steelmakers of Karnataka, investors, mining fraternity, customers and employees who have been eagerly waiting for this.”

NMDC explores and develops iron ore at Donimalai mine to export ore to Japan and South Korea.

The mine has the capacity to produce four million tonnes of RoM ore a year.

In December last year, NMDC reportedly launched legal action against the southern state of Karnataka to prevent demands for a larger share of revenue from Donimalai mine iron ore sales.

Before the launch of official legal proceedings, NMDC suspended production. The state government had imposed an 80% premium on iron ore sales from the mine, the company noted in a regulatory filing.

Established in 1958, NMDC is under the administrative control of the Indian Ministry of Steel.

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17 July 2019

MC Mining secures loan for Phase 1 of Makhado coal project

MC Mining has secured term loan approval from the Industrial Development Corporation of South Africa (IDC) Credit Committee for Phase 1 of the Makhado hard coking coal project.

The loan approval follows off-take agreements for coal production by Phase 1 of the project.

The funds will be used for west pit development and renovation of the existing Vele Colliery processing plant.

Key features of the term loan state that IDC will advance R245m ($17.5m) to MC Mining, and capital repayments will begin two years after the first draw-down and repaid in 20 equal quarterly instalments.

MC Mining CEO David Brown said: “The company is positioned to become South Africa’s pre-eminent producer of highgrade metallurgical coal with long-term hard coking coal markets supported by growing global steel demand, driven by economic development and urbanisation.

“Phase 1 utilises the existing Vele Colliery processing facility as well as previously tested logistics infrastructure and with an internal rate of return in excess of 45% and a payback of less than 2.5 years, generates significant returns for shareholders.”

The company requires around R$700m ($50m) in funds for both Phase 1 and the settlement of the existing 2017 loan facility.

Phase 1 plays a crucial role in the development of Phase 2, which is anticipated to commence construction from CY2022.

The second phase of the project will yield more than 0.8M tonnes per annum (tpa) of hard coking coal. It will also produce between 0.9Mtpa and 1.0Mtpa of export quality thermal coal.

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17 July 2019

Alrosa and ZCDC to develop diamond deposits in Zimbabwe

Russian mining company Alrosa has signed a joint venture (JV) agreement with Zimbabwe Consolidated Diamond Company (ZCDC) to develop diamond deposits in Zimbabwe.

Under the terms of the agreement, Alrosa will own a 70% controlling stake for the development of greenfield projects and ZCDC will hold the remaining 30% interest.

The JV will be initially engaged in the geological exploration of greenfield deposits. The two parties will then focus on diamond mining and the independent sale of rough diamonds in external markets.

The new collaboration will focus work on the licences that ZCDC already owns, as well as in the new prospective areas of the country.

In the event of a discovery of a new prospect, the JV will directly contact the Zimbabwe Ministry of Mines and Mining Development requesting a new licence in that area.

Alrosa deputy CEO Vladimir Marchenko said: “Creation of a joint venture is a major step in the cooperation with our partners in Zimbabwe. We are committed to productive work in the exploration of new promising areas and subsequent diamond mining.

“Our specialists have been working in Zimbabwe for more than three months now, and the national authorities have been of great support to them. We have chosen various projects for the joint venture, and part of them is to be launched this autumn.

“Of the existing fields for development, we are considering the areas located in the Chimanimani region.”

Last December, an affiliated company Alrosa (ZIMBABWE) was established in the African country. The Zimbabwean entity is responsible for the implementation of projects in mineral exploration and mining operations.

Alrosa has also recently extracted a large rough diamond from the Zapolyarnaya pipe of the Verkhne-Munskoye deposit.

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16 July 2019

Rio Tinto sells stake in Rössing Uranium mine in Namibia

Mining giant Rio Tinto has sold its stake in the Rössing uranium mine in Namibia to China National Uranium Corporation (CNUC).

As part of the sale, Rio Tinto received an initial cash payment of $6.5m. Up to $100m will be received in contingency payments, linked to uranium spot prices and Rössing’s net income during the next seven calendar years.

The company will also receive a cash payment if the acquirer company sells the Zelda 20 mineral deposit during a restricted period post completion.

Rio Tinto signed a binding agreement with CNUC in November last year for the sale of its entire 68.62% stake in Rössing for up to $106.5m.

Rio Tinto chief executive J-S Jacques said: “This sale demonstrates Rio Tinto’s commitment to further simplifying and strengthening our portfolio and brings the total divestment proceeds received since 2017 to $11.2bn, of which $9.7bn has been returned to our shareholders.

“I would like to recognise the hard work of people across Rio Tinto and the communities around Rössing who have contributed to the success of the mine and wish them all the best for the future under new ownership.”

Rio Tinto’s Energy and Minerals group include two uranium operations in Energy Resources of Australia and Rössing Uranium in Namibia. The company also has a uranium project in Canada.

Last month, Rio Tinto awarded a contract to Austrak for the delivery of 280,000 concrete ties to its Koodaideri mining project in the Pilbara region of Australia.

Koodaideri, which is located approximately 35km north-west of Rio Tinto’s Yandicoogina mine site, will serve as a production hub for the company and feature a processing plant and infrastructure that includes a 166km rail line.

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11 June 2019

Global tailings review moves into research phase

ICMM has put an independent committee of experts to develop an international standard for the safe management of tailings storage facilities (TSFs), which comes in response to the tailings dam collapse at Vale’s Corrego do Feijão mine in Brumadinho, Brazil this year.

Supported by the United Nations Environment Programme (UNEP) and the Principles for Responsible Investment (PRI), the ICMM is performing a global tailings review to establish guidelines that will form the basis of the standard.

The international standard for TSFs safe management can be applied to all tailings dams irrespective of the location and the company that operates them.

Global Tailings Review chair Dr Bruno Oberle said: “Engaging with people from civil society, academia, business and multilateral institutions has helped me to set out an ambitious work plan for the independent Global Tailings Review.

“After this, I will prepare a draft report and standard which will be published by the end of the summer. There will be widespread consultation on these draft findings in September and October. The responses from this will inform and strengthen the final standard and report before their publication early next year.”

The review is divided into three phases consisting of a research phase, consultation phase and development of a report.

The research phase consists of engagement with communities living and working near TSFs and evaluation of the best practices.

The consultation phase will focus on the standard draft documents published at the end of phase one. The research phase will include regional meetings and an online consultation.

In the final phase, Dr Oberle will look at the consultation responses and develop the international standard and submit a report by the end of this year.

The report will outline the broader recommendations to support the implementation of the standard and be published in early next year.

For the next two months, Oberle will visit tailings storage sites around the world, collecting feedback from local communities and workers.

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10 June 2019

W Resources awards mining contract for La Parrilla tungsten project

UK-based copper and tungsten mining company W Resources has awarded a mining contract for its La Parrilla tungsten project in Spain to General de Maquinaria y Excavación (GME).

With JORC-compliant resources of 49Mt at a grade of 998ppm tungsten trioxide (WO3), the project is a large tungsten deposit and is being developed in three stages.

The tungsten mine is located approximately 3km from main Seville / Madrid Highway, and is located in close proximity to both Atlantic and Mediterranean ports.

The mining fleet is currently in, with three 60t haul trucks, along with a Liebherr excavator and other auxiliary equipment.

According to W Resources, the operation will be gradually scaled-up in response to the demand as the ramp-up progresses.

The GME team will be locally managed by a mining engineer, a production foreman and a safety manager responsible for the fleet operating team.

W Resources stated that the construction and installation work is progressing well at the mine, and the concentrator plant is scheduled to be completed in this month and commissioned the next month.

Other smaller modular plants are expected to be delivered and installed in early July.

W Resources chairman Michael Masterman said: “Following detailed negotiations, we are delighted to have awarded the mining contract for La Parrilla to GME who bring extensive experience in mining and processing.

“Importantly, the contract is in line with our final investment decision report, which further underpins our confidence of achieving the low operating costs we have outlined. The project remains within budget and we look forward to ramp-up to T2 of the project, which will deliver significant earnings starting in 2019.”

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