Eldorado gold production up 50% over Q2 2019

Eldorado Gold (TSX:ELD)(NYSE:EGO) announced on Friday a Q2 2020 preliminary production of 137,782 ounces of gold, a 50% increase over Q2 2019. 

Gold production at Kisladag mine in western Turkey increased by 130% over Q2 2019, and 19% over Q1 2020. Increased production was due to higher grade and tonnes of stacked ore and increased solution grades due to drier weather in June, the company said.

Midday Friday, Eldorado’s stock was up 3.3% on the NYSE

Production at Olympias gold-silver-lead-zinc mine in northern Greece increased by 159% over Q2 2019 and 18% over Q1 2020.

“This reflects the work completed at Olympias over the past year to increase underground development and backfilling, which has resulted in increased tonnes processed,” Eldorado said in a release.  

Production at Efemcukuru underground mine in Turkey was slightly lower than Q1 2019 due to higher grades processed during the quarter.  

Eldorado resumed its Lamaque gold mine on April 15, following a three-week mandated shutdown by the government of Quebec to address the covid-19 pandemic. Production increased in Q2 2020 (33,095 ounces) compared to Q1 2020 (27,353 ounces) due to higher grades and an increase in tonnes mined per day enabled by the recently received Certificate of Authorization from the Quebec Ministry of Environment.

Midday Friday, Eldorado’s stock was up 3.3% on the NYSE. The company has a $1.82 billion market capitalization.

No current risk of closures –Brazil mining association

Brazil has the capacity to meet the growing demand for iron ore and there is currently no risk of mine closure due to the covid-19 pandemic, says Brazilian mining association (Ibram) president Flávio Penido.

The second-largest exporter of the steelmaking ingredient in the world is currently only behind US in the number of active cases and has recorded 66,800 deaths.

Despite the situation, mining has not been largely disrupted in the country. With growing demand from China, Vale’s shipments surged compared with earlier in the year. According to S&PGlobal, Vale shipped an average of 18 million mt/month over January-May.

“There should be an accommodation of the price in 2021 and from 2022 the trend is down”

Brazilian mining association president, Flávio Penido

“We have a production capacity that is being restored and that allows us to meet demand,” Penido told MINING.COM.

“Companies in Brazil have adopted strict measures to reduce infections, implementing the use of masks, reducing the number of workers on-site, cleaning facilities and testing of 100% of workers,” he said.

Penido said a second wave of covid-19 still could hurt demand, especially if it occurs in China. Brazilian exports have also been benefited by the devaluation of the Real in 2020 ($1 = 5.35 Reais).

“We don’t know for how long this exchange rate will stay. We have to be cautious. How Brazil will end up after the pandemic is still uncertain,” Penido said.

Brazil’s annual iron ore production fell from 450 million tonnes in 2018 to 410 million tonnes in 2019, impacted by the disaster with the Brumadinho tailings dam.

The country’s exports of iron ore and concentrates reached $9,4 billion in H1 2020, down 3.7% compared to H1 2019.

Before the pandemic, Ibram estimated production of 450 million tonnes in 2020. Now, the association estimates output between 400 million and 420 million tonnes.

Strong futures, supply concerns

Strong steel futures and supply concerns lifted iron ore higher on Wednesday, with the 65% Fe – Brazilian Index up 1.2% at $116.20 a tonne, according to Fastmarkets MB.

“There was a price recovery and China’s construction sector is pulling demand. We have to remember that after Brumadinho, Vale took 90 million tonnes out of the market, which increased the price,” said Penido.

“This volume is coming back and will push prices below 100 dollars. There should be an accommodation of the price in 2021 and from 2022 the trend is down.”

Ibram is holding a virtual symposium next week with business roundtables, technical lectures and lives as part of its strategy to promote the Brazilian mining sector during the pandemic.

The E-mineração will be held on July 15th and 16th and it’s sponsored by AngloGold Ashanti and Kinross.

Novagold sues J Capital Research for defamation

Novagold (NYSE, TSX: NG) announced on Tuesday that it had served short-seller J Capital Research USA (JCAP) with a civil action lawsuit for defamation in the United States District Court for the Eastern District of New York.

The company alleged that on May 28, JCAP issued a “report” on
Novagold that contained false and misleading statements as part of what the company believes to be a “short and distort” attack.

Novagold and Barrick have reopened the Donlin camp last month following a two-month due to the covid-19 pandemic

J Capital Research accuses managers of the Vancouver-based explorer of “systematically” misleading investors about its proposed Alaska gold mine over the last 15 years.

NovaGold and Barrick’s Donlin project, with measured and indicated resources of about 39-million ounces of gold is considered one of the largest open pit gold deposits in Alaska.

JCAP, a company founded in China a decade ago which usually targets overvalued media and tech companies for short-selling, says the Donlin Gold project “will never be built” and “in short, is a stock promote, not a mining plan.”

Drilling at Donlin

Novagold and Barrick have reopened the Donlin camp last month following a two-month due to the covid-19 pandemic.

Four drill rigs have been remobilized at the project, Novagold says.

The company anticipates that most of the planned program, aimed at confirming recent geologic modeling concepts and testing potential extensions of high-grade zones, will be completed by year-end.

The 2020 drill program consists of approximately 80 holes totalling about 22,000 metres centered on the ACMA and Lewis resource areas.

Midday Tuesday, Novagold’s stock was up 4.25% on the TSE. The company has a C$4.28 billion market capitalization.

Freeport beats revised Q2 copper sales, shares jump

Freeport-McMoRan (NYSE: FCX) announced on Monday that it exceeded several key performance targets included in its April revised operating plans.

According to the company, second-quarter 2020 copper sales are expected to exceed the estimate of 690 million pounds by approximately 8% and gold sales are expected to exceed the estimate of 165,000 ounces by approximately 10%.

Freeport said that the Lone Star project in Arizona is substantially complete and on track to produce approximately 200 million pounds of copper per year, beginning in the second half of 2020.

Midday Monday, Freeport’s stock was up 7.9% on the NYSE

“Significant progress was achieved at Cerro Verde during the second quarter to restore operations following covid-19 restrictions imposed by the Peruvian government,” the company said in a press release.

During June, Cerro Verde mill operations averaged 315,000 metric tonnes of ore per day, approximately 80% of the 2019 annual average. Meanwhile, Freeport continues to operate its open-pit copper mining complex El Abra in Chile.

Grasberg

After cutting its workforce at Grasberg in May amid a surge in covid-19 cases, Freeport expects to ramp-up underground production at the world’s second-biggest copper mine.

“During the second quarter, combined production rates from the Grasberg Block Cave and Deep MLZ underground mines exceeded 54,000 metric tonnes of ore per day, approximately 9% above the April 2020 estimate and 46% above the first-quarter 2020 average,” the company said.

At the end of June, combined production from the Grasberg Block Cave and DMLZ averaged approximately 70,000 metric tonnes of ore per day.

PT Freeport Indonesia expects its 2021 copper and gold production to approximate 1.4 billion pounds of copper and 1.4 million ounces of gold, nearly double projected 2020 levels.

Freeport expects second-quarter 2020 adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) to approximate $650 million and expects to record a net loss before nonrecurring items (adjusted net income) approximating $0.03 per share.

Midday Monday, Freeport’s stock was up 7.9% on the NYSE. The company has a $18 billion market capitalization.

Dividend payments may resume, says Vale CFO

Vale (NYSE: VALE) is ready to resume dividend payments to investors and is just waiting for more certainty around the coronavirus pandemic before approving the move, Chief Financial Officer Luciano Siani Pires told investors on Friday.

Speaking on a live conference promoted by XP Investimentos, Siani Pires said that the uncertainties depend on the behavior of China, the destination of most of Vale’s exports.

“The company today is negotiated lower than it should be”

LUCIANO SIANI PIres, VALE CFO

“China today consumes 75% of the world’s iron ore. The risk of a second wave of coronavirus there has to be monitored,” he said.

The company suspended dividend payments since the disaster at Brumadinho, Minas Gerais, when its dam burst in 2019, killing over 270 people.

Siani Pires said that after the disaster the company began developing its environmental, social and governance (ESG) practices.

“Today there is a perception of greater risk for the company because of Brumadinho. The company is negotiated lower than it should be,” he said.

Iron ore price

Seaborne iron ore prices were up Friday, crossing the $100 per tonne threshold.

A rise in prices in both the Chinese iron ore futures market and the 62% Fe July swaps contract on the Singapore Exchange contributed to the increase.

Vale tends to play an important role to bring down the prices as its production increases in the second half of the year, according to Siani Pires.

“We had a bad first semester, also because of climate factors. As we normalize production in H2, we expect the prices to fall.”

Midday Friday, Vale’s stock was up 1.26% on the NYSE. The company has a $53.4 billion market capitalization.

Cordoba closes Alacran acquisition, stock explodes

Cordoba Minerals (TSX-V:CDB) announced that it has completed its acquisition of the Alacran copper-gold-silver deposit in Cordoba, Colombia.

With the Alacran mineral title, Cordoba now has 100% ownership of the entire San Matias District.  

Indicated mineral resources at Alacran are 36.1 million tonnes grading 0.57% copper and 0.26 g/t gold

Alacran is the largest mineral deposit currently defined at San Matias.

Midday Friday, Cordoba’s stock was up nearly 29% on the TSXV. The company has a $84 million market capitalization.

The company restarted last month the work on the preliminary economic assessment for the deposit.

At present, indicated mineral resources at Alacran are 36.1 million tonnes grading 0.57% copper and 0.26 g/t gold, while inferred mineral resources are 31.8 million tonnes grading 0.52% copper and 0.24 g/t gold.

The San Matías project is located in the Municipality of Puerto Libertador and it comprises a 20,000-hectare land package in a newly identified high-grade copper-gold district.

According to Cordoba, the district is characterized by porphyry type and “carbonate replacement” type and/or “iron oxide copper-gold” type deposits formed in an accreted island arc setting.

Alrosa resumes operations at International mine

Alrosa (MCX: ALRS) announced on Tuesday that operations have restarted at its International underground diamond mine near Minry, Russia.

The world’s top diamond producer by output suspended works at the mine last week, after several employees tested positive for covid-19.

The mine’s operations have resumed in a two-shift mode so mine staff don’t come into contact with contractors working at surface facilities.

“This decision was made as the majority of workers and contractors were tested negative for covid-19,” the company said in a press release.

“Employees of the mine waiting for the confirmation of test results remain furloughed. The company’s management also notes that regular testing for coronavirus will continue until the stabilization of the covid-19 situation on the national level.”

Last month, Alrosa had to suspend production at another two assets. That decision, however, was based on the dire state of the diamond market and not the pandemic

International is located the subarctic Russian republic of Sakha.

It opened in 1999 and yields some of the world’s highest diamond grades, at 8.09 carats per tonne.

It produced 2.2 million carats in 2019, contributing around 6% of the company’s total output.

Last month, Alrosa had to suspend production at another two assets. That decision, however, was based on the dire state of the diamond market and not the pandemic.

The state-controlled miner said in March it may revise down its output guidance for 2020, which it did last month. Now Alrosa expects to produce between 28 and 31 million carats. In 2019, it produced 38.5 million carats.

Russia’s overall case count stands at 647,849, the third-highest in the world, with 9,320 deaths.

Azimut expands drilling in Quebec, shares jump

Azimut Exploration (TSXV: AZM) announced the expansion of the drilling program on its wholly owned Elmer property in the Eeyou Istchee James Bay region of Quebec.

A total of 6,399 metres (32 holes) have been drilled since late May. The company said it has decided to expand the program to 10,000 metres, to further assess the main target (ELM-1) and other previously identified targets.

According to Azimut, visual observations from several holes have showed significant quartz veining and pyrite, significant associated alteration (pervasive silica, sericite, chlorite, tourmaline and carbonates) and the presence of native gold grains.

Azimut’s first seven drill holes at its Elmer property have returned long intercepts of gold mineralization, including 102 metres of 3.15 g/t gold.

Midday Tuesday, company’s stock was up 12% on the TSXV. The company has a C$203 million market capitalization.

White Gold starts drilling at Titan project, shares up

White Gold (TSXV: WGO) announced on Monday that it has started drilling on its Titan Project as well as initiated ground surveys on other high priority targets in Canada’s Yukon territory.

The 2020 exploration program is backed by partners Agnico Eagle and Kinross Gold and it has been designed to further test existing targets and recent new discoveries on the White Gold, Hen and JP Ross properties.

Company’s stock jumped 12% on the TSXV

“The fully funded program is designed to be focused and impactful starting with drilling the Titan anomaly identified late last year and to follow up on some of our other highest priority projects,” said chief executive David D’Onofrio in a media release.

The Titan project is located on the Hen property 25 kilometres northeast of the company’s flagship Golden Saddle and Arc deposits, which host mineral resources of 1,039,600 ounces Indicated at 2.26 g/t gold and 508,700 ounces Inferred at 1.48 g/t gold.

Extensive exploration work programs are planned across the White Gold District properties this season, and include approximately 10,000 soil samples, 1,000 GT probe samples, 700 line kilometres of ground magnetics and VLF-EM surveying, and high-resolution drone surveys, the company said.

Earlier this month, White Gold closed a private placement of approximately 6.66 million common shares at C$0.90 per share for gross proceeds of C$6 million to be used to kickstart the 2020 exploration program.

Midday Monday, company’s stock was up nearly 12% on the TSXV. The company has a C$135 million market capitalization.

Belgian court postpones decision to dissolve Nyrstar

The Antwerp commercial court has instructed Nyrstar to postpone a general meeting scheduled for June 30 to make a decision on the dissolution of the zinc firm.

The move comes after demand from a group of Belgian minority shareholders united around RSQ Investors, arguing lack of transparency on the restructuring of Nyrstar.

Geneva-based Trafigura acquired 98% of Nyrstar in early 2019 as part of a restructuring process.

Nyrstar is the world’s second largest zinc producer

RSQ Investors accuses Nyrstar of having, in close consultation with Trafigura, significantly harmed the company since Trafigura’s entry into the company in 2015 by “tacitly contributing to the impoverishment of the company through a series of on- and off-take agreements.”

Deloitte, which acted as the auditor for Nyrstar, had previously warned that incomplete disclosures relating to supply deals with Trafigura could affect Nyrstar’s financial reports.

“It is our conviction that the board of directors could and should have created all the necessary financial transparency before, and thus would have avoided the statutory auditor Deloitte delivering a qualified opinion on the annual accounts for two consecutive years,” RSQ Investors said in a press release.

“As a result, the minority shareholders are deprived of important information regarding the contested restructuring and the circumstances that gave rise to it.”

The zinc producer’s financial troubles began around 2010, when management embarked on a debt-fuelled spree of mining acquisitions. Prices for the metal dropped by 26% in 2018, leaving the company in no position to make a bond repayment.

Nyrstar said at the time that asset write-downs, “severe deterioration” in the global economy and lower zinc treatment charges were among the reasons for its collapse.

Currently, the firm is the world’s second largest zinc producer and one of the biggest zinc smelting companies. It has operations across northern Europe, the United States and Australia. Its mines are located in North America.

Trafigura and Nyrstar have not responded to requests for comment on the decision.