AngloGold CEO appointed new World Gold Council chair

The World Gold Council on Monday announced the appointment of Kelvin Dushnisky, CEO of AngloGold Ashanti, as its new chair. Dushnisky succeeds David Harquail, who has served as chair since 2017.

Dushnisky has been CEO of AngloGold since September 2018 and was previously president and director of Barrick Gold. He is also a member of the International Advisory Board of the Shanghai Gold Exchange, the Accenture Global Mining Executive Council, member and principal business adviser to the Institute of Business Advisers Southern Africa and the Institute of Directors Southern Africa.

Commenting on his latest position with the WGC, Dushnisky stated: “David Harquail has been an outstanding chair of the World Gold Council. During his tenure, he has helped to embed the new governance model for the organization, which has led to greater member participation and engagement.”

“I believe the World Gold Council has never been stronger and more influential than it is today, and I look forward to further advancing the World Gold Council’s work,” he continued.

World Gold Council CE David Tait says the appointment of Dushnisky would bring “a wealth of knowledge and industry experience, which will greatly benefit our work in enabling greater recognition of gold as a mainstream asset and helping all stakeholders understand the enormous contribution that this industry makes to improve people’s lives.”

Sayona submits bid for North American Lithium

Emerging lithium miner Sayona Mining (ASX: SYA) announced on Monday that the company has submitted a bid for Québec’s North American Lithium (NAL). The bid was lodged before the stated deadline on February 21.

Sayona believes its bid for the NAL assets had the unique advantage of being able to combine lithium produced from the company’s Authier project with the lithium at the NAL site, facilitating a significant improvement in plant performance and economics.

In 2018, NAL produced 114,000 tonnes of spodumene against a nameplate capacity of 180,000 tonnes. The operation also has the potential to produce battery-grade lithium carbonate with the necessary investment.

Production at NAL was halted early last year, and in May the Québec Superior Court ended creditor protection, inviting bids for the company’s assets.

Sayona’s Authier project, on its own, is expected to produce 87,400 tonnes of spodumene per year over a mine life of 18 years, with the project expected to cost C$83.6 million to develop.

“Today’s submission is an important step not only for Sayona and NAL, but also for the Québec government’s plans to develop a sustainable and profitable lithium industry,” Sayona MD Brett Lynch stated in a media release.

Pan American boosts dividend by 43% on strong 2019 cash flow

Pan American Silver (NASDAQ: PAAS) (TSX: PAAS) has had a strong financial year in 2019, generating $282 million in operational cash flow. The company also retired $60 million in debt, paid out $29 million to shareholders, made investments in new projects and had an improved cash position throughout the year.

During the fourth quarter alone, Pan American generated $129.5 million from operating activities, the highest in company history. The miner also posted revenues of $404.4 million in the fourth quarter – a 130% improvement on the previous year – and $1.35 billion for the full year, which was 70% higher than 2018.

Net earnings for the quarter totalled $51.7 million, compared with a $63.6 million loss in the prior-year quarter. For the 12 months, net earnings came to $111.2 million, up from $12.04 million in 2018. Adjusted net earnings were $68.9 million and $158 million, respectively.

Based on those results, Pan American’s board of directors has decided to increase the quarterly dividend by 43% to $0.05 per common share, for about $10.5 million in total cash dividends payable on March 12.

In 2019, Pan American increased its silver production from 24.8 million ounces to 25.9 million ounces and gold production from 178,900 ounces to 559,200 ounces, at an all-in sustaining cost of $10.46/oz in the silver segment and $948/oz in the gold segment.

Lydian wins water permit, calls on Armenia govt to help end blockade

Lydian International, which delisted from the TSX earlier this month, has been granted a water permit by Armenia’s ministry of environment for the company’s Amulsar gold project, but illegal blockades continue to prevent construction from resuming.

The company had previously sought permission to draw water from the Arpa River on two prior occasions with higher level flow rates (in excess of 40 l/s) to support long term operations, both of which were denied by the ministry. 

In late December, Lydian applied to draw water at a lower flow rate, which is estimated to be enough to support completing construction of the project. The permit allows the company to draw water at a rate of 11 l/s.

In regards to resolving the dispute with environmental protesters and ending the blockade at the gold mine, the company has called on the Armenian government to take “immediate action” to address the continuing illegality around the Amulsar project.

The controversial mine, located in a remote mountainous region, has been in development since 2016 with nearly $500 million invested in it so far. However, a group of local residents and environmental activists have been preventing access to the mine since June 2018, putting pressure on the government.

The company believes its project meets all the legal and environmental requirements and would generate hundreds of jobs and millions in tax revenue.

Orocobre agrees to buy JV partner Advantage Lithium

Orocobre announced Wednesday it has entered into a definitive agreement to acquire all of the issued and outstanding shares of Advantage Lithium that it does not already own. Orocobre is currently the largest shareholder in Advantage Lithium with a 34.7% interest in the Canadian lithium explorer.

Under the terms of the agreement, Advantage Lithium shareholders will receive 0.142 Orocobre shares for every Advantage Lithium share, valuing the takeover target’s shares at C$0.42 each based on Orocobre’s last closing price of A$3.29 per share.

If approved, the takeover offer would see Orocobre issue 15.1 million of its own shares, increasing its total issued share count by 5.8%. These shares would be issued under its existing placement capacity, meaning that shareholder approval would not be required to complete the transaction.

The acquisition of Advantage Lithium would allow Orocobre to continue to develop the Olaroz/Cauchari basin in a cost-effective manner, the company said.

Orocobre would gain exposure to the 4.8 million tonnes of measured and indicated resources and the 1.5 million tonnes of inferred resources at the Cauchari development in Argentina, where it currently holds a 25% interest with Advantage holding the balance.

Integration of Cauchari with Olaroz enables Orocobre to deliver optimal basin management and maximizes the long-term productive capacity of the Olaroz/Cauchari basin, the company added. The development of Cauchari will be considered within future plans for the Olaroz lithium facility.

The board of Advantage Lithium has approved the transaction and have urged its shareholders to vote in favour of the agreement.

Newmont’s gold reserves surpass 100Moz, largest in company history

Colorado-based gold miner Newmont (NYSE: NEM, TSX: NGT) has reported gold mineral reserves of 100.2 million attributable ounces for 2019, the largest ever in company history. This represents a 53% increase over the 65.4 million ounces recorded in 2018 following the completion of two major transactions and through ongoing exploration success.

Last year, Newmont added almost 50 million ounces of gold reserves through the acquisition of Goldcorp, formation of the Nevada Gold Mines joint venture and the continuation of its exploration program, solidifying the company as the world’s largest gold miner.

According to President and CEO Tom Palmer, the company’s reserve and resource base will be able to support stable production of more than 6 million ounces per annum for decades to come.

Percentage of Gold Reserves by Jurisdiction (North America includes Nevada)
Percentage of gold reserves by jurisdiction. (Credit: Newmont)

The reported figures include Red Lake and the company’s 50% interest in Kalgoorlie Consolidated Gold Mines (KCGM). Newmont successfully completed the sale of KCGM in January and expects to close the divestment of Red Lake in the first quarter of 2020.

Combined, these sites represented approximately 4.5 million ounces of gold reserves and 2.6 million ounces of measured and indicated resources, bringing Newmont’s adjusted 2019 reserves to 95.7 million ounces and M&I resources to 74.1 million ounces.

Newmont believes its reserve base is a key differentiator, with 88% of gold reserves located in top-tier jurisdictions in the Americas and Australia, an operating reserve life of more than 10 years and average reserve grade of 1.05 g/t.

Additionally, the gold major significantly increased its exposure to other metals over the past year, with an estimated 63 million gold equivalent ounces from copper, silver, zinc, lead and molybdenum.

Newmont plans to spend approximately $230 million on exploration this year – a decrease of 13% from the prior year as it captured $25 million of exploration synergies from the Goldcorp acquisition and about $10 million from the divestiture of KCGM and Red Lake.

Around 80% of total exploration investment would be dedicated to near-mine expansion program, and the remaining 20% would be allocated to the advancement of greenfield projects and innovation programs.

Geographically, the company would invest about 30% in North America, 25% in South America, 20% in Australia, and the remainder in Africa and other locations.

Yamana’s stock hits three-year high on strong 2019 results

Precious metals miner Yamana Gold’s (TSX:YRI; NYSE:AUY) stock reached a three-year high of $4.31 a share on Friday following the release of its fourth quarter and full year 2019 results.

Annual gold production was 900,339 ounces, while silver production reached 10.6 million ounces, both exceeding the company’s 2019 guidance. Output in the fourth quarter was 221,595 ounces and 2.97 million ounces for gold and silver respectively, in line with plan.

The gold producer also had a strong year for cash flow growth, with cash flow from operating activities increasing by 29% to $521.8 million and free cash flow rising by 63% to $219.8 million.

The gold miner has now increased its yearly dividend cumulatively by 150%

In the fourth quarter alone, cash flow from operating activities exceeded the average of the three preceding quarters by 91%.

The growth in free cash flow contributed to a sharp rise in its cash balance, which increased to $158.8 million at the end of the fourth quarter, from $98.5 million a year earlier.

Yamana also managed to nearly halve its net debt in 2019, significantly strengthening its balance sheet and financial flexibility.

For the full year, net income totalled $225.6 million compared with a loss of $297.7 million in the previous year. Fourth quarter net earnings came to $14.6 million, from a loss of $61.4 million a year earlier.

“Our operations executed extremely well, with Jacobina posting record fourth quarter and full-year production and El Peñón enjoying its strongest quarter since we rightsized the operation three years ago,” CEO Daniel Racine commented.

“Minera Florida also performed well, particularly in the month of December, something we believe is a sign of things to come. We are carrying this momentum into 2020 using our improved financial flexibility to further reduce debt, advance our organic growth projects and exploration program, and continue to increase shareholder returns.”

Owing to its strong operational and financial results throughout the year, the company has rewarded shareholders with its first quarterly dividend of $0.0125 a share, in line with its previously announced 25% increase to the company’s yearly dividend.

The gold miner has now increased its yearly dividend cumulatively by 150% to $0.05 a share, from $0.02 a share in the second quarter of last year.

The company’s current market capitalization stands at $3.94 billion.

Senegal approves Barrick’s Massawa sale to Teranga

Canadian miners Teranga Gold (TSX:TGZ) and Barrick Gold (TSX:ABX; NYSE:GOLD) have secured key approvals from the government of Senegal to proceed with their previously announced transaction, pursuant to which Teranga will acquire a 90% interest in the Massawa gold project for $430 million from a wholly owned subsidiary of Barrick and its joint venture partner. The Senegalese government will hold the remaining 10% interest in project.

The approvals also include a formal consent to Teranga’s plans to integrate Massawa into its existing Sabodala gold mine, as well as a formal waiver by the government of Senegal of its equity participation right to elect, on its behalf or on behalf of the private sector, to purchase up to an additional 25% of Massawa at market value. These approvals were key conditions precedent to closing of the transaction.

Barrick and Teranga expect to satisfy the remaining conditions precedent to closing of the transaction in the coming weeks, which include the granting of an exploitation licence and a residual exploration licence for Massawa.

Senegal approves Barrick’s Massawa sale to Teranga

Canadian miners Teranga Gold (TSX:TGZ) and Barrick Gold (TSX:ABX; NYSE:GOLD) have secured key approvals from the government of Senegal to proceed with their previously announced transaction, pursuant to which Teranga will acquire a 90% interest in the Massawa gold project for $430 million from a wholly owned subsidiary of Barrick and its joint venture partner. The Senegalese government will hold the remaining 10% interest in project.

The approvals also include a formal consent to Teranga’s plans to integrate Massawa into its existing Sabodala gold mine, as well as a formal waiver by the government of Senegal of its equity participation right to elect, on its behalf or on behalf of the private sector, to purchase up to an additional 25% of Massawa at market value. These approvals were key conditions precedent to closing of the transaction.

Barrick and Teranga expect to satisfy the remaining conditions precedent to closing of the transaction in the coming weeks, which include the granting of an exploitation licence and a residual exploration licence for Massawa.

Kinross to proceed with La Coipa mine restart

Kinross Gold (TSX: K; NYSE: KGC) has announced that it is proceeding with the restart of the La Coipa gold-silver mine in Chile based on a feasibility study that contemplates leveraging existing infrastructure to mine the Phase 7 deposit.

The restart will require a capital investment of $225 million, with prestripping expected to start late this year. About $45 million of the initial capital costs would be spent this year and the balance next year.

Production is expected to start in the first quarter of next year, with a feasibility study forecasting the open pit to produce about 690,000 gold-equivalent ounces from 2022 to 2024.

Last year, the company added 7.7 million ounces to its measured and indicated mineral resources

The project is expected to generate an internal rate of return (IRR) of 28% and net present value (NPV) of $118 million based on a $1,200/oz gold price and $17/oz silver price.

The company also plans to start production at the nearby Lobo-Marte project after the conclusion of mining at Phase 7. A prefeasibility study at Lobo-Mare remains on track to be completed by mid-year.

A scoping study for Lobo-Marte indicates that the project could produce about 4.1 million ounces of gold at 1.2 g/t over a ten-year mine life. The initial estimate for capital is $750 million, with a three-year construction timeline after project approval.

Aside from its Chilean projects, Kinross’s development pipeline also includes the Tasiast 24k project in Mauritania, the new Chulbatkan project in Russia and the Fort Knox Gilmore project in Alaska.

The Tasiast 24k project is advancing and remains on budget and on schedule to increase throughput capacity to 21,000 t/d by the end of 2021 and then 24,000 t/d by mid-2023. At Fort Knox Gilmore, the project is on schedule to start stacking on the new heap leach pad in the fourth quarter of 2020.

Kinross CEO Paul Rollinson said that the company was excited about its newly acquired Chulbatkan project, which would be a substantial open-pit mine.

“The project has a strong base case and good upside potential, and we have a substantial drilling programme planned for 2020 with the goal of adding to its resource estimate by year-end,” Rollinson stated.

Last year, the company added 7.7 million ounces to its measured and indicated mineral resources – a 28% year-on-year increase.